2012 (9) TMI 1207 - AT - Income Tax

Summary

Issues involved: Assessment order u/s 143(1), revised return, notice u/s 148, addition of trading receipts, appeal before CIT(A), appeal before Tribunal.

Assessment Order u/s 143(1) and Addition of Trading Receipts:
The assessee, a State owned Transport Corporation, filed its return of income for the assessment year 2004-05, which was processed u/s 143(1). Subsequently, a revised return was filed and processed u/s 143(1) again. An assessment order was passed u/s 148 making additions to the income. The CIT(A) partly allowed the appeal but upheld the addition of Rs. 7.29 crores as trading receipts. The assessee contended that the funds were provided by the Government for interest payment on terminal benefits to employees. The Assessing Officer treated the undisbursed amount as trading receipt, which the CIT(A) affirmed. However, the Tribunal held that the amount was not a trading receipt as it was received for a specific purpose and later adjusted by the Government for student concession subsidy, thereby allowing the appeal of the assessee.

Conclusion:
The Tribunal set aside the order of the CIT(A) and allowed the appeal of the assessee, emphasizing that the undisbursed amount of Rs. 7.29 crores received for terminal benefits cannot be considered as trading receipts in subsequent assessment years.