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TMI Blog2015 (1) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... it is mandatory on the Assessee to utilize the entire amount of "contribution in the form of commission"received from Sugar Mills and cooperative cane growers society and "Grants", received from State Government and Central Sugar Cane Committees for specified purposed being "construction of road" and "otherdevelopment works" in the "assigned area" either during the year of receipt or in subsequent year/s and not otherwise. Accordingly, the entire receiving cannot be treated as Income under section 2(24) of I.T. Act. 4. The Ld. C.I.T. (Appeals), did not appreciated that appellant has received "contribution in the form of commission" and "Grants" in accordance with the Act and Rules made by State Government to be utilized only for "specific projects" or "work" and there is no provision under the said Act/Rule authorizing the assessee to do any business activity with profit motive. 5. That as per said Act/Rule, assessee is merely a fund management body without any right of absolute ownership over the fund place at its disposal. For the road construction and development work also belongs to the Government as absolute owner. 6. That there is no provision under the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the Indian Sugarcane Committee, Grants if any made by the State Government or Central Government and contribution in the form of commission being cess made by the Sugar Factories and Cane Growers.The Assessee has filed the Return of Income and claimed deduction u/s 80P (2) of the Act, which was denied by the Assessing Officer as assessee was not registered as a Co-Operative Society. 5. The Assessee preferred an appeal before the CIT (A) but did not find favour with him. The CIT (A) rejected the claim of assessee u/s 80P (2) and u/s 11 of the Act. 6. Now, the assessee is before the Tribunal and has taken altogether a new plea or ground that the receipts of the assessee cannot be treated as income u/s 2 (24) of the Act as it was merely a grant from the Government and the commission for the Sugar Factories for specific purpose. In support of his contention, the Ld. Counsel for the assessee has invited our attention to the provisions of Section 5 and 6 of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act 1953 and the order of the CIT (A) dt. 18.02.2014 in the case of M/s. Cane Development Council, Rozagaon, Faizabad and the Orders of the Tribunalin the following cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulation of Supply and Purchases) Act 1953 r/w rule 8 of the U.P. Sugar cane (Regulation of Supply and Purchases) Rules 1954. On division of the U.P. State and formation of Uttrakhand State later on, these Act and Rules have been adoptead by the Uttrakhand State also as it. The functioning and activities of the assessee are stated to be governed by the provisions made under this Act and Rules. It has also been submitted that as per section 6 of the said Act, the functions of the assesseee are that it carries out only the development activities in the area assigned to it by the Cane Commissioner of the State. It was also submitted in the written submissions that there is no provision under the said-Act/Rule authorizing the appellant to do any business activity with profit motive or to earnany income/profit and the appellant carries out the development activitites as specified under aforesaid Act on no profit no loss basis. The appellant is merely a fund management body without any right of absolute ownership over the funds placed at its disposal. It is further mentioned here that the said roads, culverts, etc. are constructed by the appellant on the land belonging to the govt. and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the revenue have already been addressed in the earlier part of this order. We are the view that ground no. 1, 2 & 3 in the appeals of the assessee deserves to be dismissed as the same have not been addressed in the written submission and it is presumed that the assessee has nothing to say. The finding of the CIT(A) reproduced in the earlier part of this order as such are confirmed. Qua the grounds 4, 5 & 6 of the assessee and departmental grounds 1 & 2, the findings arrived at in para 6.6, the same is modified and the issue is restored to the file of the AO with the direction to address the specific provisions to the extent that the AO shall look into the specific Rules and Sections which the assessee wants the canvass in support its claim for the said purpose, assessee has relied on the order of Co - ordinate Bench in ITA No.154/Del/2008 in the case of CIT Vs N.S. Committee, Village - Thanabhawan, Tehsil - Shamli, Distt. - Muzaffarnagar wherein the departmental grounds agitating the issue of Anshdan and NirmanYogna Fund has taken a view in para 6 which reads as under :- "We have heard the Ld. DR and gone through facts on the case indisputably, the Ansh Dan and fund for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) so as to enable us to take a different view in the matter, there is no basis to interfere with his findings. Consequently, ground No. 1 to 3 in the appeal is dismissed." Accordingly the AO shall decide the issue in accordance with law qua ground no-4, 5 & 6 of the assessee and ground no-w & 2 of the Revenue in line with the order of the Co-ordinate Bench. Needless to say that the assessee shall be affording a reasonable opportunity of being heard." 12. In the case of CIT Vs U.P. Upbhokta Sahkari sangh Ltd. (Supra), the Hon'ble Allahabad High Court has held that where the amount was given by the State Government for specific purpose, it did not partake of the nature of the assessee. Even if it was treated as an income, it would not be liable to tax as it was stated that there was diversionof the income by way of overriding titles on the said amount by the way of condition. 13. In the case of DIT Vs. Society for Development Alternatives in ITA Nos.12 of 2012 and 18 of 2012, the Hon'ble High Court of Delhi has also dealt with similar issue and has held that where assesseereceived grants for specific purposes from the government, non government and foreign institution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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