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TMI Blog2016 (6) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the assessee to the Haryana State Electricity Board - Held that:- The assessee was following cash system of accounting. Moreover, section 145 of the Act was amended w.e.f 1.4.1997 whereby only one out of the two systems could be followed i.e. either mercantile or cash. The finding recorded by the Assessing Officer and the Tribunal that as the assessee was following cash system of accounting, no income on this account had been received in the year in question and therefore, it was not liable to be assessed, has not been shown to be illegal or perverse in any manner by the learned counsel for the revenue. - ITA No.134 of 2010 (O&M) - - - Dated:- 21-3-2016 - MR. AJAY KUMAR MITTAL AND MRS. RAJ RAHUL GARG, JJ. For The Appellant : Mr. Yogesh Putney, Advocate For The Respondent : None Ajay Kumar Mittal, J. 1. CM No.14932 CII of 2010 in ITA No.134 of 2010 is allowed. The amended questions of law are taken on record. 2. This order shall dispose of ITA Nos.132 and 134 of 2010 as according to the learned counsel for the appellant-revenue, the issues involved in both the appeals are similar. The facts are being extracted from ITA No.134 of 2010. 3. ITA No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cash system? (v) Whether the order of the Income Tax Appellate Tribunal is perverse in deleting the addition, made on account of interest income accrued on advance made to Haryana State Electricity Board, relying on the communication dated 20.1.2003 of the Haryana Government that principal amount of FDRs of Market Committees with HSEB be returned to the concerned Market Committees, but ignoring the remaining part of the communication which says that the matter regarding interest on these deposits will be considered after repayment of principal, which means that right of interest on the advance/deposit made by the assessee with HSEB did not stand waived and as such the same had accrued to the assessee during the year? (vi) Whether on the facts and in the circumstances of the case, the order of the Income Tax Appellate Tribunal is perverse as while deleting the addition, made on account of interest accrued on deposits with Market Committee, Pundri, ignoring the fact brought on record by the AO that as per standard agreement between the Market Committees, interest was payable on advances made by the Market Committees to one another? 4. A few facts relevant for the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accrued interest of ₹ 3,75,000/- on deposits of ₹ 37,50,000/- to Market Committee, Pundri. The assessee was not showing any interest on accrual basis on such advance. The CIT(A) dismissed the assessee's appeal. The assessee filed appeal before the Tribunal. The Tribunal allowed the appeal holding that having regard to the cash system of accounting canvassed by the assessee, no income on this account had been received in this year and therefore, it was not liable to be assessed. Alternatively, even on accrual basis, no interest had actually accrued to the assessee and therefore no addition was warranted. Hence the instant appeals by the revenue. 5. We have heard learned counsel for the appellant-revenue. 6. It is not disputed by the learned counsel for the appellantrevenue that amended questions of law Nos. (i) and (ii) are covered against the revenue by judgment of this Court in Commissioner of Income Tax vs. Market Committee, Pipli, (2011) 330 ITR 16 (P H), wherein after considering the relevant case law on the point, it was held that there was no double deduction claimed by the assessee as canvassed by the revenue. As the income of the assessee bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This emphasises that wherever Parliament considered that the computation should be in accordance with the provisions of the Act, it introduced the concept by using appropriate language. In the absence of any such language in section 11(1), we consider that the computation as envisaged by the other provisions of the Act cannot be imported into section 11(1). The Tribunal has in a way mixed up the notion of total income in understanding the expression income from property held under trust . Section 14 occurs in the chapter Computation of total income . It provides that all income for the purposes of charge of income-tax and computation of total income be classified under certain heads. Therefore, the computation under the different categories or heads arises only for the purposes of ascertaining the total income for the purposes of charge. Those provisions cannot be introduced to find out what the income derived from the property held under trust to be excluded from the total income is, for the purpose of the exemptions under Chap.III. 7. The Karnatka High Court in Commissioner of Income-Tax, Karnatka vs. Society of the Sisters of St. Anne.) [1984] 146 ITR 28 drawing supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the two deductions...... It was further recorded that:- There is a fundamental, though unwritten, axiom that no Legislature could have at all intended a double deduction in regard to the same business outgoing; and, if it is intended, it will be clearly expressed. In other words, in the absence of clear statutory indication to the contrary, the statute should not be read so as to permit an assessee two deductions...... 9. In the present case, the assessee is not claiming double deduction on account of depreciation as has been suggested by learned counsel for the Revenue. The income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purposes of the trust. There is no double deduction claimed by the assessee as canvassed by the Revenue. Judgment of the Hon ble Supreme Court in Escorts Ltd. and another (supra) is distinguishable for the above reasons. It cannot be held that double benefit is given in allowing claim for depreciation for computing income for purposes of Section 11. The questions proposed have, thus, to be answered ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est to the assessee is not decided by the government. Thus, to say that any income by way of interest has accrued to the assessee is factually wrong. Therefore, firstly, having regard to the cash system of accounting canvassed by the assessee, no income on this account has been received in this year and therefore, it was not liable to be assessed. Alternatively, even on accrual basis, as our aforesaid discussion shows, no interest has actually accrued to the assessee and, therefore, no addition is warranted. Thus, on this issue also, the assessee succeeds. In the result, appeals of the assessee are allowed. 9. It has been recorded by the Tribunal that the assessee was following cash system of accounting. Moreover, section 145 of the Act was amended w.e.f 1.4.1997 whereby only one out of the two systems could be followed i.e. either mercantile or cash. The finding recorded by the Assessing Officer and the Tribunal that as the assessee was following cash system of accounting, no income on this account had been received in the year in question and therefore, it was not liable to be assessed, has not been shown to be illegal or perverse in any manner by the learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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