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2020 (2) TMI 847 - HC - Income TaxAddition to income declared - Taxability as income in the hands of assessee - surplus earned from functioning of PDS on behalf of Government - concession component received by the assessee Government company in the course of implementing government projects of PDS concession component received by the assessee Government company in the course of implementing government projects of PDS - HELD THAT - CIT(A) is justified in deleting the addition made by the Assessing Officer by stating that surplus earned from functioning of PDS on behalf of Government cannot be taxed in the hand of the assessee. In view of the above stated facts and findings we uphold the order of the Ld.CIT(A). The various other decisions relied on by assessee in the paper book also supports its case. The submission of the ld. counsel for the assessee that in subsequent years, since subsidy receipt has been accepted by the Revenue, although u/s 143(1), and no action u/s 147 or 263 has been taken could not be controverted by the ld. DR. We, therefore, are of the considered opinion that the concession component received by the assessee Government company in the course of implementing government projects of PDS as its agent, the surplus of which, if any, was refundable or adjustable in future was not income of the assessee.
Issues:
Appeal against order of Income Tax Appellate Tribunal allowing Assessee's appeal for assessment year 2014-15 - Questions involving substantial questions of law raised by Revenue under Section 260A of Income Tax Act, 1961 - Tribunal's analysis of facts and legal provisions - Revenue's challenge to Tribunal's decision. Analysis: The Revenue challenged the order of the Income Tax Appellate Tribunal (ITAT) allowing the Assessee's appeal against the Commissioner of Income Tax (Appeal)-I's order for the assessment year 2014-15, which made an addition of ?1,94,31,98,824 to the declared income. The Revenue contended that the Tribunal did not properly consider the facts and figures in light of relevant provisions of law and precedents, resulting in a miscarriage of justice. The Revenue raised substantial questions of law under Section 260A of the Income Tax Act, 1961, questioning the Tribunal's decision. The substantial questions of law raised by the Revenue included whether the ITAT was justified in setting aside the CIT(A)'s order upholding the addition made by the assessing officer, despite the Assessee's admission of a change in accounting method. The Revenue also questioned the ITAT's deletion of the addition, ignoring precedents regarding the regular employment of accounting methods by the assessee. Additionally, the Revenue challenged the ITAT's decision to set aside the CIT(A)'s decision based on the absence of contrary views in subsequent years, arguing that each income tax proceeding is distinct and the principle of Res-Judicata does not apply. Upon reviewing the Tribunal's order, the High Court observed a meticulous analysis of facts and legal provisions. The Tribunal noted subsequent events, including the Revenue's changed stand in assessments for subsequent years. The High Court cited a case where the Tribunal upheld the CIT(A)'s decision, stating that surplus earned on behalf of the government for public distribution system activities should not be taxed in the assessee's hands. The High Court found no reason to interfere with the Tribunal's detailed analysis and concluded that there was no substantial question of law warranting the Court's intervention. Consequently, the appeal by the Revenue was dismissed.
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