Asstt. Commissioner of Income tax, Cir-2, Nagpur V. M/s Nagpur Improvement Trust, Nagpur

ITA 129/NAG/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1653 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 19-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: SUDHIR DABIR
• Keywords: Additional evidence
• Section: 43B; 143(3)

Judgement Text

1 ITA NO. 129/NAG/2012 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 129/NAG/201 2 ASSESSMENT YEARS: 2006 - 07. ASSTT. COMMISSIONER OF INCOME - TAX, NAGPUR IMPROVEMENT TRUST, CIRCLE - 2, NAGPUR. VS. NAGPUR. APPELLANT. RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI K.P. DEWANI. & SHRI SUDHIR DABIR. DATE OF HEARING : 27 - 07 - 2015 DATE OF PRONOUNCEMENT : 24 TH SEPT., 2015 O R D E R P ER MUKUL K. SHRAWAT, J.M. . THIS IS AN APPEAL FILED BY THE REVENUE EMANATING FROM AN ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 31 - 01 - 2013. THE GROUNDS RAISED ARE HEREBY DECIDED AS FOLLOWS: 2. GROUND NOS. 1 AND 2 ARE CONNECTED WITH EACH OTHER, THEREFORE, DECIDED IN A CONSOLIDATED MANNER. BOTH THE GROUNDS ARE REPRODUCED BELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF ` 6,87,99,082/ - ON ACCOUNT OF STAMP DUTY CONTRIBUTIO N BY HOLDING THAT THIS INCOME OF ` .6,87,99,082/ - HAD NOT ACCRUED TO THE ASSESSEE. 2 ITA NO. 129/NAG/2012 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN IGNORING THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND STA MP DUTY CONTRIBUTION OF ` 6,87,99,082/ - HAS ACCRUED TO THE ASSESSEE DURING THE YEAR. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 143(3) DATED 30 TH DECEMBER, 2008 WERE THAT THE ASSESSEE IS A TRUST/INSTITUTION CONSTITUTED UNDER NAGPUR IMPROVEMENT TRUST (NIT) ACT, 1936. ALTHOUGH THE ASSESSEE HAD CLAIMED THE STATUS OF LOCAL AUTHORITY U/S 10(20) OF THE INCOME - TAX ACT, THE AO HAD HELD THAT THE ASSESSEE IS A TAXABLE ENTITY AND DO NOT FALL UNDER THE CATEGORY OF LOCAL AUTHORITY AS PRESCRIBED U/S 10(20) OF I.T. ACT. AT THIS JUNCTURE IT IS WORTH TO MENTION THAT ALTHOUGH THE ASSESSEE HAD RAISED THIS OBJECTION BEFORE THE FIRST APPELLATE AUTHORITY BUT LEARNED CIT(APPEALS) REJECTED THE SAME. HOWEVER, THE ASSESSEE IS NOT IN APPEAL BEF ORE THE TRIBUNAL ON THIS ISSUE. RATHER IT IS WORTH TO MENTION THAT IN ASSESSEES OWN CASE WE HAVE ALSO TAKEN A DECISION THAT THE ASSESSEES STATUS DO NOT FALL UNDER THE CATEGORIES AS PRESCRIBED U/S 10(20) OF THE I.T. ACT VIDE AN ORDER DATED 21/08/2015 BE ARING ITA NO.52/NAG/2009 A.Y. 2005 - 06, TITLED AS NAGPUR IMPROVEMENT TRUST VS. ASSTT. COMMISSIONER OF INCOME TAX. THIS ISSUE BEING COVERED IN FAVOUR OF THE REVENUE HENCE NO FURTHER DISCUSSION IS REQUIRED, MOREOVER THE APPELLANT HAS ALSO NOT CONTESTED AT AL L. 2.1 IN RESPECT OF THE ISSUE OF STAMP DUTY CONTRIBUTION THE AO HAS OBSERVED THAT THE ASSESSEE HAD SHOWN AN AMOUNT OF ` .6,87,99,082/ - AS AN AMOUNT RECEIVABLE TOWARDS STAMP DUTY CONTRIBUTION FOR THE YEAR UNDER CONSIDERATION. THE TOTAL OUTSTANDING RECEIV ABLE UNDER THE SAID HEAD WAS AT ` .29,24,36,717/ - . ACCORDING TO THE AO, SINCE THE ASSESSEE HAD MAINTAINED MERCANTILE SYSTEM OF ACCOUNTING FOR THE YEAR UNDER CONSIDERATION, THEREFORE, THE STAMP DUTY CONTRIBUTION HAD ACCRUED TO THE ASSESSEE FOR ASSESSMENT YEA R 2006 - 07. THE AO HAS, THEREFORE, TAXED THE SAID 3 ITA NO. 129/NAG/2012 AMOUNT IN THE HANDS OF THE ASSESSEE. BEING AGGRIEVED, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE THE FIRST APPELLATE AUTHORITY IT WAS STATED THAT THERE WAS AN ARRANGEMENT WITH THE STATE GOVERNMENT THAT THE STAMP DUTY COLLECTED BY THE COLLECTOR OF NAGPUR FROM REGISTRATION OF SALE OF PROPERTY, THE ASSESSEE SHALL BE GIVEN A PERCENTAGE OF THE STAMP DUTY SO COLLECTED SO THAT THE FUND RECEIVED CAN BE USED BY THE ASSESSEE - INSTITUTION FOR THE DEVELOPMENT OF NAGPUR. THE ASSESSEE HAS EXPLAINED THAT ALTHOUGH THE STAMP DUTY WAS REGULARLY COLLECTED BY THE COLLECTOR, NAGPUR BUT THE ASSESSEES SHARE WAS NOT REMITTED. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS COMPUTED ITS SHARE FROM THE STA MP DUTY COLLECTION TO THE TUNE OF ` .6,87,99,082/ - WHICH WAS MENTIONED AS RECEIVABLE IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE MAIN CONTENTION OF THE ASSESSEE WAS THAT THE SAID FUND WAS A GRANT BY THE STATE GOVERNMENT WHICH WAS TO BE UTILIZED FOR THE DE VELOPMENT OF NAGPUR CITY. IT WAS NOT AN INCOME WHICH WAS EARNED BY ANY BUSINESS ACTIVITY OF THE ASSESSEE CARRIED OUT TOWARDS DEVELOPMENT OF NAGPUR. AFTER CONSIDERING THE ARGUMENTS OF THE ASSESSEE, LEARNED CIT(APPEALS) HAS MENTIONED ACCOUNTING STANDARD AS - 12 AND A DECISION OF HONBLE SUPREME COURT PRONOUNCED IN THE CASE OF GODHRA ELECTRICITY COMPANY 225 ITR 746 (SC). FOLLOWING THE SAID DECISION IT WAS HELD THAT THE FUND RECEIVABLE OUT OF THE STAMP DUTY COLLECTED BY THE STATE GOVERNMENT WAS NOT IN THE NATURE OF REAL INCOME IN THE HANDS OF THE ASSESSEE. IT WAS CONCLUDED THAT THE SAME WAS NOT TAXABLE IN THE HANDS OF THE ASSESSEE. BEING AGGRIEVED BY THE DELETION OF ADDITION, NOW THE REVENUE IS IN APPEAL BEFORE US. 4. FROM THE SIDE OF THE REVENUE LEARNED D.R. MR. NARENDRA KANE APPEARED AND SUPPORTED THE ACTION OF THE AO. HE HAS PLEADED THAT IN A SITUATION WHEN THE ASSESSEE IS NOT A LOCAL AUTHORITY THEN THE BENEFIT PRESCRIBED U/S 11, 12 AND 13 ARE 4 ITA NO. 129/NAG/2012 NOT TO BE GRANTED TO THIS ASSESSEE. ALTHOUGH IT IS TRUE THAT THE ASSESSEE HAS NOT RECEIVED HIS SHARE OUT OF THE STAMP DUTY COLLECTION, BUT THE AMOUNT IN QUESTION HAD ACCRUED TO THE ASSESSEE. HENCE IN A SITUATION WHEN THE ASSESSEE HAS MAINTAINED THE ACCOUNTS AS PER MERCANTILE SYSTEM OF ACCOUNTING THEN THE AO WAS JUSTIFIED IN HIS ACTION. HE HAS ALSO OBJECTED THAT THE LEARNED CIT(APPEALS) HAS WRONGLY MENTIONED THAT THE GUIDELINES ISSU ED UNDER ACCOUNTING STANDARD AS - 12 ARE APPLICABLE ON THE FACTS OF THE CASE. HE HAS ALSO RAISED A GENERAL ARGUMENT THAT BEFORE GRANTING RELIEF NEITHER THE AO WAS CONSULTED NOR A PROPER OPPORTUNITY WAS GRANTED. LEARNED D.R. HAS CONCLUDED THAT THE ADDITION DESERVES TO BE UPHELD. 5. FROM THE SIDE OF THE RESPONDENT - ASSESSEE LEARNED A.R. MR. K.P. DEWANI APPEARED. HE HAS INFORMED THAT THE PURPOSE OF THE CREATION OF THIS INSTITUTION WAS TO DEVELOP THE NAGPUR CITY. FOR THE DEVELOPMENT VARIOUS PROJECTS WERE UNDERTA KEN BY THE ASSESSEE AND TO IMPLEMENT THEM THE ASSESSEE REQUIRED FUNDS ON LARGE SCALE. THE STATE GOVERNMENT HAS IMPOSED 1 % ADDITIONAL STAMP DUTY, LEVIED ON REGISTRATION OF TRANSFER OF IMMOVABLE PROPERTY. THE ADDITIONAL STAMP DUTY WAS COLLECTED FOR THE PUR POSE OF UTILIZATION TOWARDS DEVELOPMENT OF NAGPUR CITY. THE ASSESSEE EXPECTED TO RECEIVE HIS SHARE ON THE STAMP DUTY, THEREFORE, ACCOUNTED FOR AS AN AMOUNT RECEIVABLE FROM THE GOVERNMENT. LEARNED A.R. HAS ELABORATED THAT DUE TO IMPLEMENTATION OF ACCOUN TING STANDARD - I IT WAS MANDATORY ON THE PART OF THE ASSESSEE TO DISCLOSE ALL SIGNIFICANT TRANSACTIONS AND TO PREPARE THE FINANCIAL STATEMENT ACCORDINGLY. LEARNED A.R. HAS ALSO MENTIONED THAT IN VIEW OF AS - 12 IT WAS NOT MANDATORY ON THE PART OF THE ASSESSEE TO TREAT THE SAID FUND AS INCOME BECAUSE IT IS PROVIDED THAT THE GOVERNMENT GRANTS SHOULD NOT BE RECOGNIZED UNTIL THERE IS A REASONABLE ASSURANCE FROM THE GOVERNMENT. HE HAS ARGUED THAT IT WAS A VERY STRANGE SITUATION THAT IT WAS EXPECTED FROM THIS INSTI TUTION TO CARRY ON THE DEVELOPMENT WORK BUT THE FUNDS COLLECTED ON THIS ACCOUNT HAVE NOT BEEN 5 ITA NO. 129/NAG/2012 DISBURSED TO THE ASSESSEE BY THE STATE GOVERNMENT. HE HAS INFORMED THAT SINCE PAST SO MANY YEARS THE FUNDS WERE NOT ALLOCATED TO THE ASSESSEE AND ABOUT 28.44 CRO RES ARE YET TO BE RECEIVED FROM THE STATE GOVERNMENT. IN THIS CONNECTION HE HAS DRAWN OUR ATTENTION ON A LETTER WRITTEN TO THE CHIEF SECRETARY FINANCE, SECRETARIAT, MUMBAI ASKING FOR THE DISBURSEMENT OF THE FUND. LEARNED A.R. HAS ALSO INFORMED THAT THE ASS ESSEE HAD FOLLOWED CASH SYSTEM OF ACCOUNTING BUT ONLY THIS YEAR HE HAS SWITCHED OVER TO THE MERCANTILE SYSTEM OF ACCOUNTING. HAD THE ASSESSEE CONTINUED WITH THE CASH SYSTEM OF ACCOUNTING, THE FUND IN QUESTION OUGHT TO HAVE BEEN TAXED IN THE YEAR OF RECEIPT AND NOT ON MERCANTILE BASIS. THE ASSESSEES OBJECT IS NOT TO CARRY ON ANY BUSINESS BUT TO IMPROVE THE NAGPUR CITY ON NO PROFIT BASIS. FEW CASE LAWS HAVE BEEN RELIED UPON AS LISTED BELOW : 1. UCO BANK VS. CIT, (1999) 237 ITR 889 (SC). 2. GODHRA ELECTR ICITY CO. LTD. VS. CIT (1997) 225 ITR 746 (SC). 3. BRAMHAPUTRA CAPITAL AND FINANCIAL SERVICES LTD. VS. ITO (2009) 119 ITD 266. 3. WESTERN MAHARASHTRA DEV. CORPORATION LTD. VS. DCIT (2008) 114 TTJ (PUNE). 6. HAVING HEARD T HE SUBMISSIONS OF BOTH THE SIDES AND AFTER CONSIDERING THE ORDERS IN QUESTION IN THE LIGHT OF THE EVIDENCES PLACED ON RECORD, WE ARE OF THE VIEW THAT CONSIDERING THE NATURE OF ACTIVITY CARRIED ON BY THE ASSESSEE, AS WELL AS THE FUND WHICH WAS YET TO BE REC EIVED, THE LEARNED CIT(APPEALS) HAS RIGHTLY DELETED THE ADDITION. SINCE IT IS NOT IN DISPUTE THAT THE VERY PURPOSE OF CREATION OF NIT WAS TO IMPLEMENT DEVELOPMENT OF NAGPUR CITY AND FOR THAT REASON ENTRUSTED TO EXECUTE PUBLIC UTILITY PROJECTS, THEREFORE, PRIMA FACIE THIS INSTITUTION IS NOT MEANT TO EARN THE PROFIT. IT IS ALSO NOT IN DISPUTE THAT SINCE PAST MORE THAN TWO DECADES THE STATE GOVERNMENT WAS NOT DISBURSING THE STAMP DUTY FUND TO THE ASSESSEE. IT IS 6 ITA NO. 129/NAG/2012 STATED THAT THERE WAS A HUGE RECOVERY OF ` .28.4 4 CRORES PENDING WITH THE STATE GOVERNMENT. BEFORE US FEW CASE LAWS HAVE BEEN DISCUSSED WHICH WERE IN RELATION OF TWO ISSUES. THE FIRST ONE IS WHETHER THE STAMP DUTY COLLECTION FUND WAS AT ALL AN INCOME IN THE HANDS OF THE ASSESSEE. THE OTHER TYPE OF C ASE LAWS ARE IN RESPECT OF THE ACCRUAL OF THE RIGHT TO TAX UNDER MERCANTILE SYSTEM OF ACCOUNTING . WE HAVE EXAMINED THE CASE LAWS FROM BOTH THE ANGLES. 6.1 FOR EXAMPLE, IN THE CASE OF UCO BANK 240 ITR 355 (SC) A GUIDELINE HAS BEEN PROVIDED THAT FOR THE PURPOSE OF INCOME - TAX WHAT IS TO BE TAXED IS THE REAL INCOME WHICH IS TO BE DEDUCED ON THE BASIS OF THE ACCOUNTING SYSTEM REGULARLY MAINTAINED BY THE ASSESSEE. IN THIS CONTEXT IT IS ALSO WORTH TO MENTION THAT THE APPELLANT HAS OTHERWISE ADOPTED THE CASH SY STEM OF ACCOUNTING AS STATED BEFORE US AND ALSO VERIFIABLE FROM THE ASSESSMENT ORDERS PASSED IN THE PAST IN THE CASE OF THE ASSESSEE BY THE AO FOR ASSESSMENT YEARS 2003 - 04, 2004 - 05 AND 2007 - 08 ETC. THESE ORDERS WHICH WERE PASSED AFTER A SCRUTINY U/S 143 HAVE BEEN PLACED BEFORE US IN THE COMPILATION. IT MAY NOT BE OUT OF PLACE TO MENTION THAT WE ARE NOT CONCERNED THAT WHY FOR THIS PARTICULAR YEAR THE ASSESSEE HAD SWITCHED OVER FROM CASH SYSTEM OF ACCOUNTING TO MERCANTILE SYSTEM OF ACCOUNTING BECAUSE NONE OF THE PARTY BEFORE US HAS RAISED THIS QUESTION. THEREFORE, WE CONFINE OURSELVES TO THE ISSUE THAT WHETHER THE FUND IN QUESTION WAS A REAL INCOME TO BE TAXED ON ACCRUAL BASIS OR NOT. THERE IS ONE MORE ORDER OF THE HONBLE SUPREME COURT THAT TOO IN THE C ASE OF UCO BANK 237 ITR 889 (SC) WHEREIN ALSO A LEGAL PROPOSITION WAS LAID DOWN THAT IF THE RECOVERY IS DOUBTFUL THEN THE INCOME IS NOT TO BE INCLUDED IN THE HANDS OF THE ASSESSEE. RATHER ON THIS ISSUE THE HONBLE SUPREME COURT HAS PRONOUNCED A WELL - KNOWN DECISION, NAMELY, GODHRA ELECTRICITY COMPANY LTD. 225 ITR 746 WHICH WAS ALSO DISCUSSED BY LEARNED CIT(APPEALS), AND RIGHTLY SO, THAT EVEN IF THE ACCOUNTS ARE MAINTAINED UNDER THE MERCANTILE SYSTEM, THEN WHAT IS TO BE SEEN IS 7 ITA NO. 129/NAG/2012 WHETHER THE INCOME HAD REALLY ACCRUED SO AS TO TAX IN THE HANDS OF THE ASSESSEE. THERE ARE FEW OTHER JUDGMENTS ON THIS SUBJECT BUT KEEPING BREVITY IN MIND WE HEREBY HOLD THAT THE LEARNED CIT(APPEALS) HAS RIGHTLY FOLLOWED THE DECISION OF HONBLE SUPREME COURT AND JUSTIFIED IN HOLDING T HAT THE FUND IN QUESTION WAS NOT TO BE TAXED FOR THE YEAR UNDER CONSIDERATION IN THE HANDS OF THE ASSESSEE. 7. IN THE RESULT, GROUND NOS. 1 AND 2 OF THE REVENUE DEPARTMENT ARE HEREBY DISMISSED. 8. GROUND NO. 3 READS AS UNDER : ON THE FACTS AND IN THE CI RCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF ` 75,03,472/ BY ACCEPTING THE EXPLANATION OF THE ASSESSEE THAT SINCE THE ASSESSEE IS ONLY AN IMPLEMENTING AGENCY FOR COLLECTION OF NA TAX ON BEHALF OF THE STATE GOVERNMENT AND THAT AMOUNT HAS NOT BEEN DEBITED TO P&L A/C WITHOUT GIVING OPPORTUNITY TO THE AO TO EXAMINE THE ADDITIONAL EVIDENCE OR DOCUMENTS AS PER THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 1962 ON WHICH THE EXPLANATION WAS ACCEPTED. AT THE OUTSET, LEARNED A.R. MR. K.P. DEWANI HAS VEHEMENTLY OBJECTED THE GROUND RAISED ABOUT THE INFRINGEMENT OF RULE 46A OF I.T. RULES. WE HAVE BEEN INFORMED THAT FIRSTLY THERE WAS NO ADDITIONAL EVIDENCE PLACED BEFORE THE FIRST APPELLATE AUTHORITY A ND SECONDLY NOTHING WAS ADJUDICATED UPON BY LEARNED CIT(APPEALS) AT THE BACK OF THE ASSESSING OFFICER BECAUSE AS PER COL. NO. 8 OF THE APPELLATE ORDER THE PRESENCE OF ACIT, CIRCLE 2, NAGPUR HAS DULY BEEN MARKED. CONSIDERING THE FACTS AND MATERIAL ON RECO RD WE FIND NO SUBSTANCE IN THIS ALLEGATION OF THE REVENUE DEPARTMENT. HENCE THE SAME IS HEREBY REJECTED. 8.1 ON MERITS, IT WAS NOTICED THAT A SUM OF ` 75,03,472/ PERTAINING TO NA TAX WAS NOT PAID/ DEPOSITED BY THE ASSESSEE. THEREFORE, THE ASSESSING OFF ICER HAS 8 ITA NO. 129/NAG/2012 DISALLOWED THE SAME BY INVOKING THE PROVISIONS OF SECTION 43B OF I.T. ACT. THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER IN THE FOLLOWING MANNER : B] NA TAX OF ` 75,03,472/ WAS TO BE PAID IN THE CURRENT YEAR AND ` 8,06,35,816/ TO BE PAID IN THE EARLIER YEARS WHICH WAS NOT PAID AND A SUM OF ` 1 CRORE WAS PAID IN THE CURRENT YEAR. ASSESSEE IS CLAIMING THAT THE PAYABLE AMOUNT OF THE CURRENT YEAR HAS BEEN PAID IN THIS ` 1 CRORE PAYMENT. BUT IT IS A COMMON PRACTICE AND REASONABLE ASSUMPTION THA T THE FIRST THE BALANCE OF THE EARLIER YEARS ARE CLEARED AND THEN PAYMENT OF THE CURRENT YEAR IS MADE. IT IS VERY OBVIOUS THAT THIS ` 1 CRORE PAYMENT WAS OUT OF OPENING BALANCE OF MORE THAN ` 8 CRORES AND CURRENT YEAR BALANCE OF ` 75 LACS IS OUTSTANDING IN THE TOTAL OUTSTANDING AMOUNT OF ` 7.81 CRORES OF NA TAXES. ASSESSEE COULD NOT PROVE THAT THIS PAYMENT OF ` 1 CRORE INCLUDED THE CURRENT YEAR BALANCE OF ` 75 LACS. HENCE THE WHOLE AMOUNT OF ` 75,03,472/ IS BEING DISALLOWED U/S 43B OF I.T. ACT, 1961 AND A DDED TO THE TOTAL INCOME OF THE ASSESSEE. 9. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY IT WAS ASKED TO FURNISH THE DETAILS OF THE PAYMENTS MADE BY THE ASSESSEE. AFTER EXAMINING THE DETAILS IT WAS EXPRESSED BY LEARNED CIT(APPEALS) T HAT THE ASSESSEE IS MERELY AN IMPLEMENTING AGENCY FOR COLLECTION OF NON AGRICULTURAL TAX ON BEHALF OF STATE GOVERNMENT. THE SAID AMOUNT WAS NOT CLAIMED AS AN EXPENDITURE BY DEBITING TO P&L ACCOUNT. THEREUPON THE ADDITION WAS DELETED. 10. IN THE LIGHT OF THE ABOVE FACTS WE HAVE HEARD BOTH THE SIDES. ADMITTED FACTUAL POSITION IS THAT THE NON AGRICULTURAL TAX WAS COLLECTED BY THE ASSESSEE ON BEHALF OF STATE GOVERNMENT OF MAHARASHTRA. IT IS ALSO NOT IN DISPUTE THAT THE AMOUNT COLLECTED WAS NOT REFLECTED I N THE PROFIT & LOSS ACCOUNT AS AN EXPENDITURE. RATHER THE ADMITTED FACTUAL POSITION, AS ALSO NOTED BY THE ASSESSING OFFICER, WAS THAT OUT OF THE OUTSTANDING BALANCE OF ` .8,06,35,816/ A SUM OF ` 1 CRORE WAS PAID DURING THE 9 ITA NO. 129/NAG/2012 YEAR UNDER CONSIDERATION. HOWEVE R, THE FIRST QUESTION IS THAT WHETHER SUCH COLLECTION WAS AT ALL A REVENUE RECEIPT IN THE HANDS OF THE ASSESSEE OR NOT. SINCE THE AMOUNT WAS COLLECTED ON BEHALF OF STATE GOVERNMENT, THEREFORE, UNDISPUTEDLY THE ASSESSEE HAS ACTED UPON MERELY AS A CUSTODIAN OF THE AMOUNT. AN AUTHORITY WAS DELEGATED BY THE GOVERNMENT OF MAHARASHTRA TO COLLECT THE TAX BUT THERE WAS NO DISCRETION OR POWER GIVEN TO THE ASSESSEE TO UTILIZE THE FUND. SINCE IT WAS NOT A PART OF THE EXPENDITURE CLAIMED, THEREFORE, IN OUR CONSIDERED OPINION THE PROVISIONS OF SECTION 43B HAVE WRONGLY BEEN INVOKED. FEW DECISIONS ON THIS SUBJECT, NAMELY CIT V/S. INSTITUTE OF BANKING PERSONNEL SELECTION 264 ITR 110 (BOM.), GANGA CHARITY TRUST 162 ITR 612 (GUJ.), CIT V/S. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST 198 ITR 598 (GUJ.). WERE RELIED UPON. BY PLACING RELIANCE ON THESE DECISIONS AND CONSIDERING THE TOTALITY OF THE FACTS, WE HEREBY AFFIRM THE FINDING OF LEARNED CIT(APPEALS). 11. IN THE RESULT, GROUND NO. 3 OF THE REVENUE DEPARTMENT IS HEREBY DISMISSED. 12. GROUND NO. 4 READ AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE IN RESPECT OF UNPAID SALES TAX, WORK CONTRACT TAX AND GPF IN FORM OF CHALLANS SHO WING THAT AMOUNT HAVE BEEN PAID BEFORE DUE DATE AND ALLOWING RELIEF TO THE ASSESSEE WITHOUT GIVING OPPORTUNITY TO THE AO TO EXAMINE THE EVIDENCE OR DOCUMENTS AS PER THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 1962. THERE IS NO SUBSTANCE IN THE GRIEVANCE OF THE APPLICABILITY OF RULE 46A AS RAISED BY THE REVENUE. WE HAVE ALREADY EXPRESSED OUR VIEW IN THE ABOVE PARAGRAPHS. THE ASSESSING OFFICER HAD INVOKED THE PROVISIONS OF SECTION 43B IN RESPECT OF SALES TAX, WORK AGREEMENT TAX AND GPF. FOR THE SAID DISALLOWANCES THE ASSESSING OFFICER HAS ASSIGNED SOME OF THE REASONS AS FOLLOWS : 10 ITA NO. 129/NAG/2012 C] SALES TAX OF ` 16,234/ WAS OUTSTANDING IN EARLIER YEAR AND ` 7,64,259 WAX PAYABLE IN THE CURRENT YEAR AND TOTAL PAYMENT OF ` 6,12,941/ WAS MADE IN THE CURRENT YEAR. GOING ON THE SAME LOGIC AS ABOVE AND ASSUMING THAT THE PAYMENT WAS FIRST MADE OF THE EARLIER YEARS PAYMENT OF ` 6,12,941 MINUS ` 16,234/ = ` 5,96,707/ HAS BEEN DONE FOR THE CURRENT YEAR AND BALANCE FROM ` 7,64, 259/ I.E. 1,67,552/ HAS NOT BEEN PAID FOR THE CURRENT YEAR AND IS BEING DISALLOWED U/S 43B OF I.T. ACT, 1961 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. D] WORK AGREEMENT TAX OF ` 36,79,029/ WAS OUTSTANDING AS OPENING BALANCE, ` 1,35,69,503/ WERE T O BE PAID IN THE CURRENT YEAR AND ` 1,44,59,236/ WERE PAID IN THE CURRENT YEAR. BASED ON THE ABOVE DISCUSSIONS IN PARA 06[A] IT CAN BE REASONABLY ASSURED THAT ` 36,79,029/ WERE FIRST PAID FROM THE TOTAL AMOUNT OF ` 1,44,59,236/ AND REST OF ` 1,07,80,207 / WERE PAID IN THE CURRENT YEAR OUT OF TOTAL DUES OF ` 1,35,69,503/ AND BALANCE OF ` 27,89,296/ ARE OUTSTANDING FOR THE CURRENT YEARS AND IS BEING DISALLOWED U/S 43B OF I.T. ACT, 1961 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 13. WHEN TH E MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY IT WAS COMMENTED BY LEARNED CIT(APPEALS) THAT OUT OF THE SALES TAX PAYABLE OF ` .1,67,552/ , THE ASSESSEE HAD PAID AN AMOUNT OF ` 1,34,523/ BY CHEQUE ON 8 TH OF APRIL, 2006. HOWEVER, BALANCE OF ` 33, 029/ REMAINED PAYABLE. THEREFORE, TO THAT EXTENT THE DISALLOWANCE WAS SUSTAINED. FURTHER IN RESPECT OF WORK CONTRACT TAX THE AMOUNT COLLECTED WAS AT ` 27,89,296/ WHICH WAS DULY PAID AS PER THE DATES MENTIONED IN THE APPELLATE ORDER. SINCE THE AMOUNT W AS DULY PAID WITHIN THE DUE DATES, HENCE IT WAS DELETED. IN RESPECT OF GPF PAYABLE IT WAS CLARIFIED THAT ORIGINALLY IT WAS WRONGLY CREDITED TO THE GPL ACCOUNT BY MISTAKE, BUT LATER ON IT 11 ITA NO. 129/NAG/2012 WAS RECTIFIED AND SUBSEQUENTLY THE ENTIRE COLLECTED AMOUNT WAS PAID W ITHIN THE DUE DATES. RATHER THERE WAS NO OUTSTANDING AMOUNT AFTER THE DUE DATE. AFTER VERIFYING THOSE DETAILS LEARNED CIT(APPEALS) HAS DELETED THE ADDITION. 14. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT THE DETAI LS OF PAYMENTS WAS STATED TO BE A PART OF THE REGULAR RECORD OF THE REVENUE DEPARTMENT WHICH WAS RIGHTLY EXAMINED AND UNDERSTOOD BY LEARNED CIT(APPEALS). ON THAT BASIS HE HAS GRANTED THE RELIEF. THERE IS NO DISPUTE ABOUT THE CHALLANS PLACED ON RECORD. THER EFORE, WE HEREBY HOLD THAT THERE WAS NO FALLACY IN GRANTING THE RELIEF. THE SAME IS HEREBY CONFIRMED AND GROUND NO. 4 IS DISMISSED. 14. GROUND NOS. 5 AND 6 READ AS UNDER : 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS ) HAS ERRED IN HOLDING THAT AMOUNTS OUTSTANDING IN TRUST AND AGENCY FUNDS IN RESPECT OF HUJ HOUSE CONSTRUCTION FUND, SPECIAL GRANT VIDARBHA RELIEF FUND, DALIT VASTI SUDHAR YOJANA FUND, MP FUND, MLA FUND, NATIONAL SLUM DEVELOPMENT FUND AND VAMBAY FUND CANNO T BE TREATED AS THE INCOME OF THE ASSESSEE AND ACCEPTING THE EXPLANATION OF THE ASSESSEE THAT IT IS ONLY AN IMPLEMENTING AGENCY IN RESPECT OF ABOVE FUNDS ON THE BASIS OF ADDITIONAL EVIDENCE IN FORM OF UTILIZATION CERTIFICATES ETC. WITHOUT GIVING OPPORTUNI TY TO THE AO TO EXAMINE THE EVIDENCE OR DOCUMENTS AS PER THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 1962. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN ACCEPTING THE EXPLANATIONS OF THE ASSESS EE THAT AMOUNT SHOWN UNDER THE HEAD DEVELOPMENT WORK OF PRIVATE LAYOUTS WERE TEMPORARY DEPOSITS ON THE BASIS OF ADDITIONAL EVIDENCE IN FORM OF ABSTRACT OF MONTHLY AMOUNTS RECEIVED WITHOUT GIVING OPPORTUNITY TO THE AO TO EXAMINE THE EVIDENCE OR DOCUMENT AS PER THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 1962. 15. BOTH THESE GROUNDS ARE CONNECTED, HENCE HEREIN BELOW DECIDED BY COMMON REASONING. THE OBSERVATION OF THE ASSESSING OFFICER WAS THAT CERTAIN FUNDS WERE RECEIVED BY THE ASSESSEE WH ICH WERE NOT INCLUDED IN THE INCOME OF THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE WAS THAT NEITHER THE RECEIPT OF THE FUNDS 12 ITA NO. 129/NAG/2012 NOR THE EXPENSES OF THESE FUNDS WERE CLAIMED BECAUSE THE ASSESSEE WAS RECEIVING THE FUNDS WITH A SPECIFIC DIRECTION TO UTILIZE FO R A PARTICULAR PURPOSE. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAD DEFAULTED IN NOT DISCLOSING THE AMOUNT IN PROFIT AND LOSS ACCOUNT WHICH WAS IN HIS OPINION REVENUE IN NATURE. HE HAS DRAWN AN INCOME AND EXPENDITURE OF THOSE FUNDS AND THE SURPLUS OF ` 15,35,05,217/ WAS TAXED AS INCOME OF THE ASSESSEE. 16. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(APPEALS) HAS REPRODUCED THE DETAILS OF THE FUNDS RECEIVED BY THE ASSESSEE UNDER DIFFERENT HEADS AS UNDER : (I) HUI HOUSE CONSTRUCTION GRANT 2,00,00,000/ - (IJ) SPECIAL GRANT VIDARBHA RELIEF FUND 2500,000/ - (III) DALIT VASTI SUDHAR YOINE FUND 9,00,00,000/ - (TV) MP FUND 30,09002/ - (V) MLA FUND 21,66,880/ - (VI) NATIONAL SLUM DEVELOPMENT FUND 2,13,91,509/ - (VII) 1900 DEVELOPMENT FUND 17,0766,654/ - (VITI) 572 DEVELOPMENT FUND 7,45,05,419/ - (IX) DEVELOPMENT WORK OF PRIVATE LAYOUTS 4,21,87,518/ - (X) VAMBEY FUND 1,45,62,000/ - TOTAL .. 44,10,88,982/ - 16.1 THEREAFTER LEARNED CIT(APPEALS) HAS DISCUSSED THE ALLOCATION OF THE FUNDS UNDER EACH HEAD SUCH AS HUJ HOUSE CONSTRUCTION GRANT OF ` 200 LAKHS, SAPECIAL GRANT VIDARBHA RELIEF FUND ` 25 LAKHS, DALIT VASTI SUDHAR YOJNA FUND ` 9 13 ITA NO. 129/NAG/2012 CRORES ETC. TOTALING ` 44,10,88,982/ AS PER THE ABOVE CHART. KEEPING BREVITY IN MIND WE ARE NOT REPRODUCING THE NATURE OF THE GRANT AND SPECIFIC PURPOSE FOR WHICH THE AMOUNT WAS GRANTED TO THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE WAS THAT SPECIAL GRANT WAS RECEIVED FO R CONSTRUCTION OF HUJ HOUSE FROM GOVERNMENT OF MAHARASHTRA. NO AMOUNT WAS SPENT ON CONSTRUCTION DURING THE YEAR. HOWEVER, CONSTRUCTION WORK WAS CONTINUED IN SUBSEQUENT YEARS, THEREFORE, SHOWN AS LIABILITY IN THE ACCOUNTS THIS YEAR. LIKEWI SE THE MAHARASHTRA GOVERNMENT VIDE AN ORDER SANCTIONED THE FUND FOR DEVELOPMENT OF MEETING HALL FOR VIDARBHA RELIEF SOCIETY, NAGPUR. THE GOVERNMENT HAD GIVEN THE RESPONSIBILITY OF CONSTRUCTION OF MEETING HALL TO NIT. THEREFORE, THE NIT IS ONLY AN IMPLEMEN TING AGENCY ON BEHALF OF THE GOVERNMENT OF MAHARASHTRA. IDENTICAL WAS THE POSITION IN RESPECT OF DALIT VASTI SUDHAR YOJNA FUNDS OF ` 900 LAKHS. VIDE A SANCTION LETTER BY THE GOVERNMENT OF MAHARASHTRA FUNDS WERE ALLOCATED FOR DEVELOPMENT O F DALIT VASTI VIKAS. TO IMPLEMENT THE DIRECTIONS OF THE GOVERNMENT THE DEVELOPMENT WORK WAS CARRIED OUT. HOWEVER, THE ASSESSEE WAS REQUIRED TO SUBMIT A UTILIZATION CERTIFICATE FOR EVERY WORK UNDERTAKEN ALONG WITH THE VOUCHERS TO THE GOVERNMENT. 16.2 EVEN THE CENTRAL GOVERNMENT HAD SANCTIONED FUNDS FOR DEVELOPMENT WORK FOR EACH PARLIAMENTARY CONSTITUENCY. THEREFORE, THE GRANT WAS RECEIVED BY THE ASSESSEE FOR THE PURPOSE OF EXECUTION OF A PARTICULAR WORK. EVEN THE MLA FUND WAS SANCTIONED BY GOVERNMEN T OF MAHARASHTRA IN RESPECT OF EACH MLA CONSTITUENCY FOR DEVELOPMENT OF A CONSTITUENCY. THE AMOUNT WHICH WAS SPENT WAS ACTUALLY UTILIZED AND IF REMAINED UNSPENT THEN SHOWN AS OUTSTANDING LIABILITY. ON THE BASIS 14 ITA NO. 129/NAG/2012 OF THE UTILIZATION OF THE FUND AND THE MANNER IN WHICH SANCTIONS WERE GIVEN, THE LEARNED CIT(APPEALS) HAS CONCLUDED AS UNDER : 17. I HAVE CAREFULLY CONSIDERED THE ISSUE BEFORE ME. AS REGARDS HUJ HOUSE CONSTRUCTION GRANTS OF RS. 2 CRORES HAS BEEN SANCTIONED. APPELLANT HAS FURNISHED A COPY OF UTILIZ ATION CERTIFICATE OF GOVT. OF MAHARAHSTRA DT. 31 - 08 - 2009. THE CONSTRUCTION WAS COMPLETED IN THE FY 2011 - 12. AS THE AMOUNT OF GRANT HAS BEEN FOR A SPECIFIC PURPOSE FOR WHICH NIT WAS AN IMPLEMENTING AGENCY. I AM OF THE VIEW THAT THE TRUST FUND CANNOT BE TRE ATED AS INCOME OF THE ASSESSEE, SIMILARLY THE SPECIAL GRANT FOR VIDARBHA RELIEF FUND HAS ALSO BEEN SANCTIONED FOR CONSTRUCTION OF THE MEETING HALL. THIS AMOUNT CANNOT THEREFORE BE TREATED AS INCOME OF THE ASSESSEE. AS REGARDS DALIT VASTI SUDHAR YOJNA FUND NIT IS THE IMPLEMENTING AGENCY FOR THIS SCHEME IN COORDINATION WITH THE LOCAL SOCIETIES. UTILIZATION CERTIFICATE FOR THE WORK UNDERTAKEN IS TO BE SUBMITTED TO THE GOVERNMENT. APPELLANT HAS FURNISHED A COPY OF UTILIZATION CERTIFICATE IN THIS REGARD. AS REG ARDS MP FUND IT HAS POINTED OUT BY THE APPELLANT THAT THESE AMOUNTS ARE SANCTIONED BY CENTRAL GOVERNMENT AND THE MPS OF THE RESPECTIVE CONSTITUENCY ARE AUTHORIZED TO USE THESE AMOUNTS. THE UNUTILIZED FUND IS TO BE REFUNDED. THE AMOUNT IS RECEIVED FOR EXE CUTION OF PARTICULAR PROJECTS AND THE UNUTILISED AMOUNT IS A LIABILITY OF NIT. AS REGARDS MLA FUND THE NIT IS ONCE AGAIN MERELY AN IMPLEMENTING AGENCY AND WORK AS APPROVED BY THE DISTRICT PLANNING COMMITTEE IS TO BE CARRIED ON. THE AMOUNT THEREFORE RECEI VED IS LIABILITY AND NOT THE INCOME OF THE ASSESSEE. SIMILARLY FOR THE NATIONAL SLUM DEVELOPMENT FUND APPELLANT HAS RECEIVED AN AMOUNT OF RS. 2,13,91,509/ - FOR THIS SPECIFIC IMPLEMENTATION OF THE NATIONAL SLUM DEVELOPMENT PROJECT. NO AMOUNT CAN BE TREATED AS INCOME OF THE APPELLANT. 17.1 AS REGARDS FOR 1900 DEVELOPMENT CHARGES AND 572 DEVELOPMENT CHARGES IT IS STATED THAT GOVT. OF MAHARASHTRA HAS PASSED SPECIAL ENACTMENT CALLED MAHARASHTRA GUNTHEWARI DEVELOPMENT ACT, 2001 DT. 30 - 04 - 2001 . NIT IS THE PLANNING AUTHORITY PROVIDES ON SITE INFRASTRUCTURE IN THE LAYOUT. INFRASTRUCTURE DEVELOPMENT TIS AN ACTIVITY ENTRUSTED WITH OF NIT AND FOR THIS COMPOUNDING FEES AND DEVELOPMENT CHARGES ARE TO BE PAID BY THE PLOT HOLDERS. THE AMOUNTS RECEIVED FRO M THE PLOT HOLDERS IS THUS CLEARLY INCOME AS NIT HAS AUTHORITY TO LEVY THE CHARGES WHICH ARE UTILIZED FOR CREATING INFRASTRUCTURE IN UNAUTHORIZED LAYOUTS. THE INFRASTRUCTURE DEVELOPMENT WORK IS STATED TO BE IN PROGRESS AND YET TO BE COMPLETED. 17.2 I H AVE CAREFULLY CONSIDERED THE ISSUE. IT HAS CLAIMED BY THE APPELLANT THAT CERTAIN EXPENDITURE HAS BEEN INCURRED IN DEVELOPING AND CREATING ON SITE INFRASTRUCTURE. AO IS DIRECTED TO VERIFY WHETHER THIS AMOUNT HAS BEEN DEBITED TO THE INCOME AND EXPENDITURE ACCOUNT AND CAN BE RELATABLE TO THE DEVELOPMENT OF INFRASTRUCTURE IN THE 1900 AND 572 LAYOUTS. AFTER CONSIDERING THE EXPENDITURE SURPLUS IS TO BE BROUGHT TO TAX. AO IS DIRECTED TO BRING THE SURPLUS AMOUNT TO TAX ACCORDINGLY. 15 ITA NO. 129/NAG/2012 17.3 AS REGARDS DEVELOPMENT WORK OF PRIVATE LAYOUTS OF RS. 4,21,87,518/ - APPELLANT HAS POINTED OUT THAT THE AMOUNTS ARE BASICALLY REFUNDABLE DEPOSIT AND HAVE BEEN WRONGLY CLASSIFIED AS DEVELOPMENT WORK. THE ABSTRACT OF MONTHLY AMOUNTS ARE ENCLOSED. I AM T HEREFORE OF THE OPINION THAT NO AMOUNTS ARE REQUIRED TO BE ADDED BACK UNDER THIS HEAD. 17 . 4 AS REGARDS VAMBEY FUND OF RS. 1,45,62,000/ - IT IS POINTED OUT BY THE APPELLANT THAT THESE AMOUNTS ARE RECEIVED FOR SPECIFIC PROJECT FOR REHABILITATION OF SLUM DW ELLERS. THE AGENCY IS MERELY AN IMPLEMENTING AGENCY AND HAS TO SUBMIT AN UTILIZATION CERTIFICATE. CONSIDERING THE SUBMISSION OF THE APPELLANT, THE AMOUNT IS THEREFORE DELETED. THESE GROUNDS ARE THEREFORE PARTLY ALLOWED. 17. IN THE LIGHT OF THE ABOVE FACTUAL BACKGROUND WE HAVE HEARD BOTH THE SIDES. AS DISCUSSED HEREIN ABOVE, THE APPELLANT IS AN AGENCY INCORPORATED BY THE GOVERNMENT TO IMPLEMENT CERTAIN PROJECTS OF THE GOVERNMENT. FOR THAT PURPOSE FUNDS WERE GRANTED WITH CERTAIN SP ECIFICATIONS TO UTILIZE FOR THE DEVELOPMENT OF THE AREA. THEREFORE, THE WORK ASSIGNED TO THE ASSESSEE WAS TOWARDS INFRASTRUCTURE DEVELOPMENT FOR WHICH THE FUNDS WERE ALLOCATED AND UTILIZED FOR THOSE PROJECTS. IN A SITUATION WHEN THE PROJECT WAS COMPLETED T HEN THE UNUTILIZED FUND IS SHOWN AS A LIABILITY IN A SEPARATE ACCOUNT MAINTAINED FOR EACH FUND. SINCE THE REVENUE DEPARTMENT HAS NOT ALLEGED THAT THE FUNDS HAVE BEEN MISUTILIZED BUT SIMPLY A TECHNICAL OBJECTION WAS RAISED PERTAINING TO THE MAINTENANCE OF ACCOUNTS, THEREFORE, IN OUR CONSIDERED OPINION THERE WAS NO FALLACY IN THE FINDINGS OF LEARNED CIT(APPEALS) WHO HAS DISCUSSED EACH AND EVERY FUNDS AND ITS UTILIZATION AND THEREAFTER GRANTED RELIEF TO THE ASSESSEE. EVEN IN RESPECT OF DEVELOPMENT WORK OF PR IVATE LAYOUTS THE FACTS HAVE REVEALED THAT THE GOVERNMENT OF MAHARASHTRA HAS PASSED A SPECIAL ENACTMENT CALLED AS MAHARASHTRA GUNTHEWARI DEVELOPMENT FOR PRIVATE SITE INFRASTRUCTURE IN THE LAYOUT. REGULARIZATION CHARGES AND COMPOUNDING FEES IS LEVIED ON THE PLOT HOLDERS. THE STATE GOVERNMENT HAS DETERMINED THE COMPOUNDING FEES AND DEVELOPMENT CHARGES TO BE RECOVERED FROM THE PLOT HOLDERS. THE ASSESSEE WAS ENTRUSTED FOR INFRASTRUCTURE DEVELOPMENT WORK. THEREFORE, THE 16 ITA NO. 129/NAG/2012 AMOUNT RECEIVED FROM THE PLOT HOLDERS W AS NOT THE INCOME OF THE ASSESSEE BECAUSE IT WAS COLLECTED AS AN AGENT OF THE GOVERNMENT AUTHORITY, THAT TOO WITH THE PURPOSE TO UTILIZE AS PER THE DIRECTIONS. THE ASSESSEE HAD MAINTAINED A SEPARATE ACCOUNT WHEREIN RECORDED THE EXPENDITURE INCURRED AND TH E FUNDS RECEIVED BY DISCLOSING THE SITE INFRASTRUCTURE EXPENDITURE INCURRED. IT HAS ALSO BEEN INFORMED THAT IN SOME CASES THE WORK WAS IN PROGRESS BECAUSE THE PROJECT WAS NOT COMPLETED. 17.1 AFTER CONSIDERING THE OVERALL FUNCTIONS OF THE ASSESSEE WE A RE OF THE CONSIDERED OPINION THAT THE AMOUNTS RECEIVED BY THE ASSESSEE WERE NOT IN THE NATURE OF A REVENUE RECEIPT IN THE HANDS OF THE ASSESSEE. WE, THEREFORE, AFFIRM THE FINDINGS OF LEARNED CIT(APPEALS) THAT AS PER THE SEVERAL NOTIFICATIONS ISSUED BY THE GOVERNMENT THE ASSESSEE HAS FUNCTIONED MERELY AS AN IMPLEMENTING AGENCY. FOR THAT REASON THE ASSESSEE WAS REQUIRED TO SUBMIT UTILIZATION CERTIFICATE OF THE FUNDS TO THE GOVERNMENT. WE, THEREFORE, AFFIRM THE FACTUAL FINDING OF LEARNED CIT(APPEALS). RESULTAN TLY BOTH THESE GROUNDS OF THE REVENUE ARE HEREBY DISMISSED. 18. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPT., 2015. SD/ SD/ (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 24 TH SEPT. , 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 17 ITA NO. 129/NAG/2012 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE