Kolkata Port Trust , Kolkata V. JCIT, Range - 35, Kolkata , Kolkata

ITA 367/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4950 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 07-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: K M SUNDARAM
• Keywords: Capital asset; Business expenditure; Opportunity of being heard; Principle of natural justice; Question of law; Non-deduction of tax; Competent authority; Capital receipt; Revenue expenditure; CHAPTER IV
• Section: 271(1)(c); 43B; 143(3); 80G; 12AA; 201; 274; 43; 13; 22; 69; 10

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( . . , . . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM] I.T.A. NO. 453/KOL/2018 ASSESSMENT YEAR: 2014-15 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-35, KOLKATA. VS. KOLKATA PORT TRUST (PAN: AAAJK0361L) APPELLANT RESPONDENT & C.O. NO.23/KOL/2019 IN I.T.A. NO. 453/KOL/2018 ASSESSMENT YEAR: 2014-15 KOLKATA PORT TRUST VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-35, KOLKATA. APPELLANT RESPONDENT & I.T.A. NO. 452/KOL/2018 ASSESSMENT YEAR: 2014-15 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-35, KOLKATA. VS. KOLKATA PORT TRUST APPELLANT RESPONDENT & C.O. NO.60/KOL/2018 IN I.T.A. NO. 452/KOL/2018 ASSESSMENT YEAR: 2014-15 KOLKATA PORT TRUST VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-35, KOLKATA. APPELLANT RESPONDENT & I.T.A. NOS. 367 TO 369/KOL/2018 ASSESSMENT YEARS: 2012-13 TO 2014-15 KOLKATA PORT TRUST . VS. JCIT, RANGE-35/ACIT, CIRCLE-35, KOLKATA APPELLANT RESPONDENT FOR THE ASSESSEE SHRI K. M. SUNDARAM, FCA FOR THE REVENUE DR. P. K. SRIHARI, CIT, DR DATE OF HEARING 09.12.2019 DATE OF PRONOUNCEMENT 21.02.2020 2 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 ORDER PER SHRI A.T.VARKEY, JM : ALL THESE CAPTIONED APPEALS AND CROSS OBJECTIONS P REFERRED BY THE ASSESSEE AND THE APPEALS OF THE REVENUE ARE AGAINST THE SEPARATE ORDERS OF LD. CIT(A)-10, KOLKATA DATED 28.12.2017 FOR AYS 2012-13 TO 2014-15. SINCE ALL THESE APPEALS AND CROSS OBJECTIONS HAVE BEEN HEARD TOGETHER, WE DISPOSE OF THE SAME BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP ITA NO. 453/KOL/2018 AND CO NO . 23/KOL/2019. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF REVENUE IS AGAINST THE A CTION OF LD. CIT(A) IN CANCELLING THE PENALTY OF RS.1,17,26,930/- LEVIED BY THE AO U/S. 2 71(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. BRIEFLY STATED FACTS AS NOTED BY THE AO ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND FROM INDIVIDUAL TRANSACTIO N STATEMENT THAT THE ASSESSEE HAD RECEIVED A SUM OF RS.3,50,67,785/- AS INTEREST ON I NCOME TAX REFUND OF RS.36,73,76,770/- DURING THE RELEVANT YEAR. BUT TH E ASSESSEE HAD NOT DISCLOSED THE SAME IN ITS RETURN OF INCOME. THEREFORE, HE ADDED BACK RS.3,50,67,785/- TO THE TOTAL INCOME OF ASSESSEE AND PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT WAS INITIATED FOR FILING INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, NOT ICE U/S. 274 R.W.S. 271(1)(C) OF THE ACT WAS ISSUED ON 29.12.2016 AND SERVED UPON THE ASSESS EE. IN RESPONSE TO THIS NOTICE, THE LD. AR FILED ITS SUBMISSION BEFORE THE AO WHICH WAS REPRODUCED BY THE AO IN THE PENALTY ORDER DATED 20.06.2017 AT PAGE 2 AND THEREA FTER, ACCORDING TO THE AO THE ASSESSEES REPLY WAS NOT ACCEPTABLE AND IMPOSED PE NALTY OF RS.1,17,26,930/- U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PART ICULARS OF INCOME WHICH HAS RESULTED INTO THE OMISSION OF INTEREST INCOME ON INCOME TAX REFUND AS PART OF THE TAXABLE INCOME. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO CANCELLED THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) OF THE ACT BY HOLDING THAT THE ASSESSEES OMISSION TO OFFER INTEREST INCOME ON INCOME TAX REF UND OF RS.3,50,67,785/- WAS AN INADVERTENT AND BONA FIDE ERROR AND NO CONTUMACIOUS CONDUCT HAS BEEN ESTABLISHED BY THE AO. THUS, ACCORDING TO LD. CIT(A), THE ASSESSEE C ANNOT BE HELD GUILTY OF CONCEALMENT OF INCOME WARRANTING LEVY OF PENALTY. AGGRIEVED, RE VENUE IS IN APPEAL BEFORE US. 3 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE LD. CIT(A) HAS DELET ED THE PENALTY TAKING NOTE THAT DUE TO INADVERTENT AND BONA FIDE ERROR THE ASSESSEE HAS NO T SHOWN THE INCOME AND THIS OMISSION ON THE PART OF ASSESSEE WAS NOT DUE TO CONTUMACIOUS CONDUCT OF THE ASSESSEE, THEREFORE, PENALTY NEED NOT BE LEVIED UPON THE ASSESSEE. BE T HAT AS IT MAY, WE ARE NOT GOING TO GET INTO THE MERIT OF THE IMPUGNED ORDER OF LD. CIT(A). HOWEVER, WE CONFIRM THE ACTION OF THE LD. CIT(A) ON A DIFFERENT REASON, I.E. INVA LID NOTICE OF PENALTY. AT THE OUTSET, WE NOTE THAT THE SHOW CAUSE NOTICES ISSUED U/S 274 OF THE ACT R.W.S. 271 OF THE ACT DATED 29.12.2016 ISSUED BY THE AO BEFORE IMPOSING PENALTY DOES NOT CONTAIN THE SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER TH E ASSESSEE WAS BEING PROCEEDED AGAINST FOR HAVING CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. A COPY OF THE SHOW CAUSE NO TICE U/S 274 OF THE ACT DATED 29.12.2016 WAS FILED BEFORE US AND PERUSAL OF THE S AME REVEALS THAT AO HAS NOT STRUCK OUT THE IRRELEVANT PORTION IN THE SHOW CAUSE NOTICE AND, THEREFORE, THE SHOW CAUSE NOTICE DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER THE CHARGE IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME. THE SAME IS REPRODUCED FOR THE PURPOSE OF READY REFERENCE: WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2014- 15 IT APPEARS TO ME THAT YOU HAVE CONCEALED THE PAR TICULARS OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 5. WE NOTE SIMILAR ISSUE CAME UP BEFORE THE HONB LE HIGH COURT AND APEX COURT AND WE REFER TO THE DECISION OF THE HONBLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 2 3.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHAR GE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR F URNISHING OF INACCURATE PARTICULARS OF INCOME. WE ALSO NOTE THAT AS AGAINST THE DECISION O F THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.114 85 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISS ED THE SLP PREFERRED BY THE 4 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 DEPARTMENT. WE ALSO NOTE THAT THE DECISION OF THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.115 4 OF 2014 DATED 05.01.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNAT HA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF P ENALTY ON DEFECTIVE SHOW CAUSE NOTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE AS SESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 6. LD. DR VEHEMENTLY OPPOSED THE ORDER OF LD. CIT(A ) AND HAS CITED VARIOUS CASE LAWS. WE NOTE THAT ALL THE CASE LAWS CITED BEFORE US BY THE LD. DR HAS BEEN DEALT WITH ELABORATELY BY THE COORDINATE BENCH OF THIS TRIBUNA L IN THE CASE OF JEETMAL CHORARIA VS. ACIT, ITA NO. 956/KOL/2016 FOR AY 2010-11 DATED 01. 12.2017, WHEREIN THE TRIBUNAL HAS NOTED AS UNDER: 7. THE LEARNED DR SUBMITTED THAT THE HONBLE CA LCUTTA HIGH COURT IN THE CASE OF DR.SYAMAL BARAN MONDAL VS. CIT (2011) 244 CTR 631 ( CAL) HAS TAKEN A VIEW THAT SEC.271 DOES NOT MANDATE THAT THE RECORDING OF SATI SFACTION ABOUT CONCEALMENT OF INCOME MUST BE IN SPECIFIC TERMS AND WORDS AND THAT SATISF ACTION OF AO MUST REFLECT FROM THE ORDER EITHER WITH EXPRESSED WORDS RECORDED BY THE AO OR B Y HIS OVERT ACT AND ACTION. IN OUR VIEW THIS DECISION IS ON THE QUESTION OF RECORDING SATISFACTION AND NOT IN THE CONTEXT OF SPECIFIC CHARGE IN THE MANDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE REFERENCE TO THIS DECISION, IN OUR VIEW IS NOT OF A NY HELP TO THE PLEA OF THE REVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MU MBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/2009 DATED 21. 3.2017; (II) EARTHMOVING EQUIPMENT SERVICE CORPORATION VS. DCIT 22(2), MUMBA I, (2017) 84 TAXMANN.COM 51 (III) MAHESH M.GANDHI VS. ACIT VS. ACIT ITA NO.2976/MUM/2 016 DATED 27.2.2017. RELIANCE WAS PLACED ON TWO DECISIONS OF THE HONBLE BOMBAY H IGH COURT VIZ., (I) CIT VS. KAUSHALYA 216 ITR 660(BOM) AND (II) M/S.MAHARAJ GAR AGE & CO. VS. CIT DATED 22.8.2017. THIS DECISION WAS REFERRED TO IN THE WR ITTEN NOTE GIVEN BY THE LEARNED DR. THIS IS AN UNREPORTED DECISION AND A COPY OF THE SAME WA S NOT FURNISHED. HOWEVER A GIST OF THE RATIO LAID DOWN IN THE DECISION HAS BEEN GIVEN IN T HE WRITTEN NOTE FILED BEFORE US. 9. IN THE CASE OF CIT VS. KAUSHALYA (SUPRA), THE H ONBLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR THE RULES, DO ES NOT EITHER MANDATE THE GIVING OF NOTICE OR ITS ISSUANCE IN A PARTICULAR FO RM. PENALTY PROCEEDINGS ARE QUASI- CRIMINAL IN NATURE. SECTION 274 CONTAINS THE PRINCIPLE OF NATURAL JUSTICE OF THE A SSESSEE BEING HEARD BEFORE LEVYING PENALTY. RULES OF NATURA L JUSTICE CANNOT BE IMPRISONED IN ANY STRAIGHT-JACKET FORMULA. FOR SUSTAINING A COMPLAINT OF FAILURE OF THE PRINCIPLES OF NATURAL 5 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 JUSTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, IT HAS TO BE ESTABLISHED THAT PREJUDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOL LOWED. THE ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE AB OUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURAT E PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE ITAT MUMBAI BENCH IN THE CASE OF DH ANRAJ MILLS PVT.LTD. (SUPRA) FOLLOWED THE DECISION RENDERED BY THE JURISDICTIONAL HONBLE BOMBAY HIGH COURT IN THE CASE OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SU PRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF CIT V. MITHILA MOTOR 'S (P.) LTD. [1984] 149 ITR 751 (PATNA) WHEREIN IT WAS HELD THAT UNDER SECTION 274 OF THE INCOME-TAX ACT, 1961, ALL THAT IS REQUIRED IS THAT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO SHOW CAUSE. NO ST ATUTORY NOTICE HAS BEEN PRESCRIBED IN THIS BEHALF. HENCE, IT IS SUFFICIENT IF THE ASSESSE E WAS AWARE OF THE CHARGES HE HAD TO MEET AND WAS GIVEN AN OPPORTUNITY OF BEING HEARD. A MIST AKE IN THE NOTICE WOULD NOT INVALIDATE PENALTY PROCEEDINGS. 10. IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CO RPORATION (SUPRA), THE ITAT MUMBAI DID NOT FOLLOW THE DECISION RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) FOR THE REASON THAT PENALTY IN THAT CASE WAS DELETED FOR SO MANY REASONS AND NOT SOLELY ON THE BASIS OF DEFECT IN SHOW CAUSE NOTICE U/S.274 OF THE ACT. THIS IS NOT FACTUALLY CORRECT. ONE OF THE PARTIES BEFORE THE G ROUP OF ASSESSEES BEFORE THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG (SUPRA) WAS AN ASSESSEE BY NAME M/S.VEERABHADRAPPA SANGAPPA & CO., IN ITA NO.5020 OF 2009 WHICH WAS AN APPEAL BY THE REVENUE. THE TRIBUNAL HELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, IT IS CLEAR THAT IT IS A STAN DARD PROFORMA USED BY THE ASSESSING AUTHORITY. BEFORE ISSUING THE NOTICE THE INAPPROPRI ATE WORDS AND PARAGRAPHS WERE NEITHER STRUCK OFF NOR DELETED. THE ASSESSING AUTHORITY WAS NOT SURE AS TO WHETHER SHE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAS FURNISHED INACCURATE DETAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT OF THE PARTICULAR SECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH I S ATTRIBUTABLE TO A PATENT NON APPLICATION OF MIND ON THE PART OF THE ASSESSING AUTHORITY. FUR THER, IT HELD THAT THE ASSESSING OFFICER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEIN G UNDISCLOSED INVESTMENT. IN THE APPEAL, THE SAID FINDING WAS SET-ASIDE. BUT ADDITIO N WAS SUSTAINED ON A NEW GROUND, THAT IS UNDER VALUATION OF CLOSING STOCK. SINCE THE ASSESSI NG AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDITIONS MADE UNDER SECTI ON 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENA L PROCEEDINGS, NO LONGER EXISTS. IF THE APPELLATE AUTHORITY HAD INITIATED PENAL PROCEEDINGS ON THE BASIS OF THE ADDITION SUSTAINED UNDER A NEW GROUND IT HAS A LEGAL SANCTUM. THIS WAS NOT SO IN THIS CASE AND THEREFORE, ON BOTH THE GROUNDS THE IMPUGNED ORDER PASSED BY THE A PPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SET-ASIDE BY ITS ORDER DATE D 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVENUE FILED APPEAL BEFORE HIGH COURT. THE HONBLE HIGH COURT FRAMED THE FOLLOWING QUESTION OF LAW IN THE SAID APPEAL VIZ., 1. WHETHER THE NOTICE ISSUED UNDER SECTION 271(1)(C) IN THE PRINTED FORM WITHOUT SPECI FICALLY MENTIONING WHETHER THE PROCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALM ENT OF INCOME OR ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS IS VALID AND L EGAL? 2. WHETHER THE PROCEEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONBLE KARNATAKA HIGH COURT HELD IN THE NEGATIVE AND AGAINST THE REVENUE ON BOTH THE QUESTIONS. THEREFORE THE 6 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 DECISION RENDERED BY THE ITAT MUMBAI IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CORPORATION (SUPRA) IS OF NO ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 11. IN THE CASE OF M/S.MAHARAJ GARAGE & CO. VS. CI T DATED 22.8.2017 REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR, WHICH IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED, THE SAME PROPOSITION AS WAS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA) APP EARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXTRACTS FURNISHED IN THE WRITTEN NOTE FURNISHED BY THE LEARNED DR BEFORE US. 12. IN THE CASE OF TRISHUL ENTERPRISES ITA NO.384 & 385/MUM/2014, THE MUMBAI BENCH OF ITAT FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA). 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUM BAI ITAT THE ITAT HELD THAT THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE MANJUNATHA COTTON & GINNING (SUPRA) WILL NOT BE APPLICABLE TO THE FACTS OF THAT CASE BECAUSE THE AO IN THE ASSESSMENT ORDER WHILE INITIATING PENALTY PROCEEDINGS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND MERELY BECAUSE IN THE SHO W CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTION WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURATE PARTICULARS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VIT IATE THE PENALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPHER IN THE ORDER OF A SSESSMENT ON THIS ASPECT. WE HAVE POINTED OUT THIS ASPECT IN THE EARLIER PART OF THIS ORDER. HENCE, THIS DECISION WILL NOT BE OF ANY ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US . EVEN OTHERWISE THIS DECISION DOES NOT FOLLOW THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) IN AS MUCH AS T HE RATIO LAID DOWN IN THE SAID CASE WAS ONLY WITH REFERENCE TO SHOW CAUSE NOTICE U/S.27 4 OF THE ACT. THE HONBLE COURT DID NOT LAY DOWN A PROPOSITION THAT THE DEFECT IN THE S HOW CAUSE NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S.271(1) (C ) IS DISCERNI BLE FROM A READING OF THE ASSESSMENT ORDER IN WHICH THE PENALTY WAS INITIATED. 14. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN T HAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE AB OUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURAT E PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PAT NA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHS AT BANGALORE HAVE TO FOLLOW THE DEC ISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JUR ISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE R ENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (S UPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA. I T IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOU RABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE THEREFORE PREFER TO FOLLOW THE VIEW E XPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG (SUPRA). 15. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE N OTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. THE SHOW 7 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION O F PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DI RECTED TO BE CANCELLED. 7. RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF TH E COORDINATE BENCH OF THIS TRIBUNAL, WE, THEREFORE, SUSTAIN THE DELETION OF PE NALTY BY THE LD. CIT(A) AND, THEREFORE, THE APPEAL OF REVENUE IS DISMISSED. 8. THE CROSS OBJECTION PREFERRED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF LD. CIT(A). SINCE WE UPHOLD THE ACTION OF THE LD. CIT( A), THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED BEING INFRUCTUOUS. 9. NOW, WE ARE COMING TO ITA NO. 452/KOL/2018. THE ONLY GROUND RAISED BY THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE SUM OF RS.1.75 CR. REPRESENTING UNCLAIMED CREDIT BALANCES. 10. BRIEF FACTS OF THE CASE AS NOTED BY THE AO ARE THAT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE HE FOUND THAT THE ASSESSEE HAD AN OUTSTAND ING LIABILITY TO THE TUNE OF RS.1.75 CR. FOR THE YEAR 1983-84 UNDER THE HEAD PRIOR PERIOD I NCOME. THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN THE DETAILS REGARDING THE SAME FO R WHICH THE ASSESSEE SUBMITTED THAT ON 28.02.2014 AN AMOUNT OF RS.1.75 CR. WAS ADJUSTMENT OF EXCESS PROVISION OF OUTSTANDING LIABILITIES PRIOR TO AY 2002-03 . ACCORDING TO AO, THE ASSESSEES EXPLANATION WAS NOT ACCEPTABLE AND SINCE THE LIABILITY IS NOT RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION (AY 2014-15) HE DISALLOWED THE SAME A ND WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DELETE THE SAME. AGGRIE VED, THE REVENUE IS IN APPEAL BEFORE US. 11. ASSAILING THE DECISION OF THE LD. CIT(A), THE L D. CIT, DR CONTENDED THAT THE ENTRIES MADE BY THE ASSESSEE CLEARLY REFLECT THAT T HE SUM OF RS.1.75 CR. IS THE UNCLAIMED CREDIT BALANCES (FOR THE AY 1983-84) WHICH WERE TIM E BARRED IN THIS YEAR I.E. AY 2014- 15 AND SO THE ASSESSEE FOR THIS ASSESSMENT YEAR HAS REVERSED THIS AMOUNT BY WRITING BACK IN THE P&L ACCOUNT AND, THEREFORE, THE AO HAS RIGHT LY ADDED BACK THE SAID AMOUNT AS 8 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 INCOME OF THE ASSESSEE DURING THE RELEVANT ASSESSME NT YEAR AS DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. TVS IYENGAR & SONS (1996) 88 TAXMAN 429 (SC). THEREFORE, ACCORDING TO LD. CIT, DR THE LD. CIT(A) ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE, SO HE WANTED US TO REVERSE THE DECISION O F THE LD. CIT(A) AND UPHOLD THE DECISION OF THE AO. 12. PER CONTRA, THE LD. AR SUBMITTED THAT THE ASSE SSEE WAS A LOCAL AUTHORITY AND ITS INCOME WAS NOT TAXABLE U/S. 10 OF THE ACT AND SINCE THE ASSESSEE WAS NOT TAXABLE IN THE FY 1983-84 AND THE LIABILITY WAS ORIGINALLY BOOKED IN ITS BOOKS BY DEBITING THE P&L ACCOUNT AND CREDITING THE OUTSTANDING LIABILITIES; AND ACCORDING TO HIM, NO TAX DEDUCTION OR BENEFIT WAS OBTAINED IN FY 1983-84 UNDER THE INC OME TAX ACT WHEN THE PROVISION WAS ORIGINALLY MADE IN FY 1983-84. THEREFORE, ACCOR DING TO HIM, THE REVERSAL OF THE SAME IN THE RELEVANT AY 2014-15 IS NOT TAXABLE EVEN UNDER ANY SECTION/PROVISION PARTICULARLY NOT U/S. 41(1) OF THE ACT AND, THEREFO RE, ACCORDING TO THE LD. AR, IN VIEW OF THE FACT THAT RS.1.75 CR. WAS CREDITED TO THE P&L A CCOUNT REPRESENTS THE REVERSAL OF A LIABILITY CREDITED IN THE BOOKS DURING THE PERIOD W HEN THE ASSESSEE WAS NOT A TAXABLE ENTITY AND, THEREFORE, THE LD. CIT(A) HAS RIGHTLY D ELETED THE ADDITION OF RS.1.75 CR. AND, THEREFORE, HE DOES NOT WANT US TO INTERFERE IN THE ORDER OF THE LD. CIT(A). 13. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE IN QUESTION IS A PORT TRUST ENGAGED IN PROVIDING PORT SERVICES SINCE THE YEAR 1870 AND IS UNDER THE DIREC T CONTROL AND SUPERVISION OF THE UNION GOVERNMENT AND IS A CREATURE OF THE PORT TRUST ACT. IT IS UNDISPUTED THAT THE INCOME OF THE PORT TRUST WAS EARLIER EXEMPTED BEING A LOCAL A UTHORITY U/S. 10 OF THE ACT. DUE TO THE SUBSEQUENT AMENDMENT BY THE FINANCE ACT, 2003 THE I NCOME OF THE ASSESSEE TRUST BECAME TAXABLE. IT IS NOTED THAT THE ASSESSEE IN T HE RELEVANT ASSESSMENT YEAR I.E. AY 2014-15 HAS WRITTEN BACK OUTSTANDING LIABILITIES OF RS.1.75 CR. PERTAINING TO AY 1983-84. BEFORE THE LD. CIT(A) IT WAS CONTENDED BY THE ASSES SEE THAT SINCE THE INCOME DERIVED BY THE PORT TRUST WAS NOT TAXABLE IN THE YEAR 1983-84, NO DEDUCTION FOR LIABILITIES WAS ALLOWED IN THAT YEAR. IN ORDER TO SUPPORT THIS FAC T THE ASSESSEE PRODUCED THE RELEVANT GENERAL VOUCHER BEFORE THE LD. CIT(A) (VOUCHER NO. MAJV/2013/0119 DATED 28.02.2014). AFTER CONSIDERING THE SAME, THE LD. C IT(A) HELD AS UNDER: 9 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 .... ON GIVING DUE CONSIDERATION TO THE FACTS OF THE CASE AND AVERMENTS OF THE LD. ARS OF THE APPELLANT, I AM IN COMPLETE AGREEMENT WITH THE CONTENTION PUT FORTH BY THE APPELLANT IN THIS REGARD. THE CREDIT OF RS.1,75,00,000/- TO THE P&L ACCOUNT REPRESENTS THE REVERSAL OF A LIABILITY CREATED IN THE BOOKS DURING THE PERI OD WHEN THE ASSESSEE WAS NOT A TAXABLE ENTITY AND THEREFORE WHEN THE LIABILITY WAS NEVER A LLOWED AS DEDUCTION IN THE YEAR IN WHICH IT WAS DEBITED/CREATED; THEN REVERSAL OF THE SAME IN THE RELEVANT YEAR CANNOT BE BROUGHT TO TAX. FOR THE REASONS SET OUT IN THE FOR EGOING THEREFORE, THE ADDITION OF RS.1,75,00,000/- MADE BY THE LD. AO IS HEREBY DELET ED. GROUND NO. 2 IS THEREFORE ALLOWED. 14. WE NOTE THAT THE LD. CIT(A) TAKING NOTE THAT TH E LIABILITY WAS PERTAINING TO AY 1983-84 WHEN THE ASSESSEE/ENTITYS INCOME WAS NOT T AXABLE AND THE LIABILITY OF RS.1.75 CR. PERTAINED TO AY 1983-84 WHICH WAS NEVER ALLOWED AS DEDUCTION IN THE YEAR IN WHICH IT WAS DEBITED/CREATED SO, THE REVERSAL OF THE SAME IN THE RELEVANT ASSESSMENT YEAR CANNOT BE BROUGHT TO TAX, WHICH ACTION OF THE LD. CIT(A) C ANNOT BE FOUND FAULT WITH. THE JUDGMENTS CITED BY THE LD. CIT, DR IS DISTINGUISHAB LE ON THE FACTS OF THIS CASE AND, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD. CIT(A) AND SO, WE CONFIRM THE SAME AND DISMISS THE APPEAL OF THE REVENUE. 15. THE CROSS OBJECTION PREFERRED BY THE ASSESSEE I S IN SUPPORT OF THE ORDER OF LD. CIT(A). SINCE WE UPHOLD THE ACTION OF THE LD. CIT( A), THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED BEING INFRUCTUOUS. 16. NOW, WE ARE COMING TO ITA NOS. 367 TO 369/KOL/2 018. SINCE THE GROUNDS OF APPEAL OF THE ASSESSEE ARE THE SAME FOR AYS 2012-13 TO 2014-15 EXCEPT VARIANCE IN FIGURES THE APPEAL FOR AY 2012-13 IS TAKEN AS A LEA D CASE AND THE RESULT WILL BE FOLLOWED IN THE CASE OF AYS. 2013-14 AND 2014-15. THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DISALLOWING THE CONTRIBUTION MADE BY THE ASSESSEE TO KOLKATA PORT TRUST OFFICERS CLUB. 17. BRIEF FACTS OF THE CASE AS NOTED BY THE AO ARE THAT IT WAS SEEN FROM SCHEDULE-16 OF THE P&L ACCOUNT THAT EXPENSES TO THE TUNE OF RS.19, 42,034/- HAS BEEN DEBITED AS DONATION TO KOLKATA PORT TRUST OFFICERS ASSOCIATIO N. ACCORDING TO AO, THESE EXPENSES WERE NOT RELATABLE TO THE BUSINESS ACTIVITY OF THE ASSESSEE TRUST, SO WAS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. AG GRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO GI VE PARTIAL RELIEF TO THE ASSESSEE TO THE TUNE OF RS.2,23,078/- IN PLACE OF RS.19,42,034/ - ADDITION MADE BY THE AO. STILL NOT 10 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 SATISFIED WITH THE PARTIAL RELIEF GRANTED BY THE LD . CIT(A), THE ASSESSEE IS BEFORE US CHALLENGING THE ACTION OF THE LD. CIT(A) IN CONFIRM ING RS.17,18,956/-. 18. HAVING HEARD BOTH THE PARTIES, WE NOTE THAT THE ASSESSEES CONTRIBUTION TO KOLKATA PORT TRUST OFFICERS CLUB TO THE TUNE OF RS.17,18,9 56/- AS WELL AS THE ASSESSEES CONTRIBUTION TO KOLKATA PORT TRUST OFFICERS WIVES ASSOCIATION OF RS.2,23,078/- TOTALLING RS.19,42,034/- HAS BEEN DISALLOWED BY THE AO ON THE GROUND THAT THESE EXPENSES WERE NON-BUSINESS EXPENDITURE WHICH IS NOT RELATED TO TH E BUSINESS ACTIVITY OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) TAKING NOTE THAT THE ASSE SSEE TRUST HAD GIVEN RS.2,23,078/- AS CONTRIBUTION TO KOLKATA PORT TRUST OFFICERS WIVES ASSOCIATION WHICH IS AN INSTITUTION REGISTERED U/S. 12AA OF THE ACT AND ENJOYING BENEFI T OF EXEMPTION U/S. 80G OF THE ACT THE LD. CIT(A) GAVE RELIEF TO THE ASSESSEE FOR THE SAID AMOUNT. HOWEVER, IN RESPECT OF THE BALANCE AMOUNT OF RS.17,18,956/- WHICH THE ASSE SSEE HAD CONTRIBUTED TO THE OFFICERS CLUB HE CONFIRMED THE ACTION OF AO. WE NOTE THAT T HE OFFICERS CLUB WAS ESTABLISHED BY THE EMPLOYEES OF THE ASSESSEE PORT TRUST AND SIN CE THE CLUB IS BEING RUN BY AND FOR THE BENEFIT OF THE EMPLOYEES TO WHICH CONTRIBUTIONS HAVE BEEN PAID BY THE ASSESSEE AS AN EMPLOYER, THE ASSESSEE CLAIMED IT AS AN EXPENDITURE . WE NOTE THAT THE ASSESSEE IS GOVERNED BY THE MAJOR PORT TRUST ACT, 1963 AND AS P ER CHAPTER 8, HEADING REVENUE EXPENDITURE SECTION 87, THE MONEYS RECEIVED BY OR O N BEHALF OF THE BOARD UNDER THE PROVISION OF THIS ACT (MAJOR PORT TRUST ACT) IS CRE DITED TO FUND CALLED THE GENERAL ACCOUNT OF THE PORT AND IT CAN BE APPLIED AS PER SECTION 88 OF THE MAJOR PORT TRUST ACT FROM THE GENERAL ACCOUNT. AS PER SECTION 88, THE MONEYS CRE DITED TO THE GENERAL ACCOUNT U/S. 87 SHALL BE APPLIED BY THE BOARD (TRUSTEES) IN PAYMENT OF VARIOUS CHARGES SPECIFIED IN CLAUSE (A) TO (L). CLAUSE (K) SAYS ABOUT APPLICATI ON OF MONEY CREDITED IN THE GENERAL ACCOUNT (SEC. 87) SUBJECT TO SEC. 89 OF THE MAJOR P ORT TRUST ACT AND SEC. 36 OF THE INDIAN PORTS ACT FOR ANY OTHER EXPENDITURE WHICH MAY BE IN CURRED BY THE BOARD GENERALLY FOR THE PURPOSE OF THIS ACT. THUS, ACCORDING TO THE A SSESSEE, THIS AMOUNT/CONTRIBUTION GIVEN TO THE CLUB ESTABLISHED FOR THE BENEFIT OF THE EMPL OYEES OF THE ASSESSEE IS GIVEN BY THE BOARD U/S. 88 CLAUSE (K) OF THE MAJOR PORT TRUST AC T, 1963. WE FURTHER NOTE THAT IN SIMILAR CASES, THE TRIBUNAL HAS BEEN CONSISTENTLY A LLOWING THIS KIND OF CLAIM OF ASSESSEE. WE NOTE THAT IN THE CASE OF TATA GLOBAL BREVERAGE L TD. VS. DCIT IN ITA NO. 11 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 511/KOL/2010 AND ITA NO. 2105/KOL/2010 DATED 03.02. 2017 IN SIMILAR ISSUE TRIBUNAL HAS HELD AS UNDER: 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE UNDER DISPUTE IS COVERED BY THE EARLIER ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE AS STATED SUPRA WHEREIN IT WAS HELD AS BELOW:- 15. AT THE TIME OF HEARING BEFORE US, THE LD. COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS BHARAT PETR OLEUM CORPORATIONLTD 252 ITR 43 (BOM) WHEREIN IT HAS BEEN HELD THAT 40A(9) O F THE ACT IS NOT APPLICABLE IN CASE THE ASSESSEE HAS REIMBURSED EXPENSES TO THE CL UB FORMED FOR THE BENEFIT OF THE EMPLOYEES. HE ALSO PLACED RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF DCIT VS CHLORIDE INDUSTRIES LTD REPORTED IN 76 ITD 1 (KOL). 16. ON THE OTHER HAND , THE LD DR RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD AND THE CASE LAWS CITED BY THE LD. COUNSEL F OR THE ASSESSEE. WE FIND THAT THE FACTS ARE NOT IN DISPUTE. WE, THEREFORE, FIND MERIT IN THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TRIBUNAL, KOLKATA BENCH IN TH E CASE DCIT VS CHLORIDE INDUSTRIES LTD (SUPRA) HAS DELETED THE ADDITION BY OBSERVING AS UNDER: THE COMMISSIONER (APPEALS) HAD DELETED THE SAID AD DITION BY FOLLOWING THE TRIBUNALS ORDER IN THE CASE OF DCIT VS APE BEL LISS INDIA LTD (IT APPEAL NOS. 527 TO 531 (CAL) OF 1989) . THE TRIBUNA L OBSERVED THAT SECTION 40A(9) IS NOT APPLICABLE BECAUSE THIS SECTI ON STANDS FOR ANY FUNDS, INSTITUTIONS, WHERE THE ASSESSEE MADE THE SUBSCRIPT ION FOR THE PURPOSE OF WELFARE OF THE EMPLOYEES. THAT MEANS THAT THERE SHO ULD BE A COMPLETE IDENTITY BETWEEN THE DONOR AND THE DONE. HERE STAFF RECREATION CLUB AND THE STAFF CLUB WERE A PART AND PARCEL OF THE ORGANI ZATION ITSELF AND THEY WERE GIVEN MONEY BY WAY OF SUBSIDY, AN AGE OLD PRAC TICE . IN VARIOUS GOVERNMENT DEPARTMENTS ALSO SUBSIDIES ARE GIVEN AS A MATTER OF COURSE FOR CARRYING ON WELFARE ACTIVITIES. SO FINALLY THE TRIB UNAL UPHELD THE ORDER OF THE COMMISSIONER (APPEALS) WHO HAD DELETED THE SAID ADDITION. BY RESPECTFULLY FOLLOWING THE EARLIER ORDER OF THE TRI BUNAL THERE WAS NO INFIRMITY WITH THE ORDER OF THE COMMISSIONER (APPEA LS) WHO HAD RIGHTLY DELETED THE SAID ADDITIONS PERTAINING TO THE STAFF WELFARE. IN THIS VIEW OF THE MATTER AND IN THE ABSENCE OF ANY DISTINGUISHABLE MA TERIAL BROUGHT ON RECORD BY THE REVENUE, WE RESPECTFULLY FOLLOWING TH E ORDER OF THE TRIBUNAL (CITED SUPRA) HOLD THAT THE DISALLOWANCE OF RS. 5,3 7,755/- IS NOT SUSTAINABLE IN LAW AND THEREFORE, THE SAME IS HEREBY DELETED. T HE GROUND OF APPEAL OF THE ASSESSEE IS, THEREFORE , ALLOWED.. 19. WE NOTE THAT THE ASSESSEE PORT TRUST HAS BEEN C ONTRIBUTING EVERY YEAR FOR MORE THAN FOUR DECADES ANNUAL CONTRIBUTION TO THIS OFFIC ERS CLUB FOR THE WELFARE OF THE EMPLOYEES AND THIS ANNUAL CONTRIBUTION HAS BEEN CO NSISTENTLY ALLOWED BY THE AO IN EARLIER ASSESSMENT YEARS AFTER SCRUTINY U/S. 143(3) OF THE ACT. THEREFORE, BASED ON THE PRINCIPLES OF CONSISTENCY SINCE THE FACTS PERMEATIN G IN THE EARLIER YEARS ARE THE SAME, AND THERE IS NO CHANGE IN THE FACTS AND LAW THE DISALLO WANCE WAS NOT WARRANTED AND, 12 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 THEREFORE, RELYING ON THE DECISION OF CIT VS. RADHA SOAMI SATSANG (1993) 201 ITR 493 AS WELL AS THE CASE LAW REFERRED TO ABOVE, WE ARE INCL INED TO ALLOW THE GROUND OF APPEAL RAISED BY THE ASSESSEE FOR ALL THE THREE ASSESSMENT YEARS I.E. AYS. 2012-13 TO 2014-15. 20. THE NEXT GROUND OF APPEAL OF THE ASSESSEE IS AG AINST THE ACTION OF THE LD. CIT(A) IN DISALLOWING THE COMPENSATION CLAIMED TO THE TUNE OF RS.176,92,12,615/-. HOWEVER, AT THE TIME OF HEARING, THE LD. AR SUBMITTED THAT THI S COMPENSATION CLAIM HAS GOT TWO PARTS (I) UNREALISED PORTION OF THE COMPENSATION OF RS.101,84,03,098/- AND (II) REALISED PORTION OF RS.75,08,09,517/-. ACCORDING TO THE LD. AR, THE ASSESSEE HAS DECIDED NOT TO PRESS THE ACTION OF THE LD. CIT(A) CONFIRMING THE A DDITION IN RESPECT OF THE REALISED PORTION OF COMPENSATION I.E. RS.75,08,09,517/-, THE REFORE, THIS PART OF ADDITION IS NOT UNDER CHALLENGE BY THE ASSESSEE SO IN THE RESULT, THIS ACTION OF LD. CIT(A) STANDS CONFIRMED TO THE EXTENT OF RS.75,08,09,517/-. SO, A SSESSEES APPEAL PARTLY FAILS. 21. COMING TO THE UNREALISED PORTION OF RS.101.84 C R. THE AO HAS NOTED THAT HE ASKED THE ASSESSEE TO EXPLAIN ABOUT THE TAXATION IMPACT R EGARDING COMPENSATION BILLING OF RS.176.92 CR. AS APPEARING FROM THE NOTE 14 NOTES OF ACCOUNT OF THE ASSESSEE AND THEY WERE ALSO ASKED TO EXPLAIN WHY THE SERVICE TAX AMOU NTING TO RS.9.04 CR. FOR LAND COMPENSATION BILL FOR KDS SHOULD NOT BE DISALLOWED U/S. 43B OF THE ACT. IT WAS REPLIED BY THE ASSESSEE THAT IT HAD LARGE AREAS OF LAND WHI CH HAS BEEN GIVEN OUT ON RENT AND WHEN THERE IS A BREACH OF AGREEMENT LIKE UNAUTHORISED CO NSTRUCTION, UNAUTHORISED OCCUPATION ETC. THE EVICTION NOTICES ARE ISSUED UNDER THE PUBL IC PREMISES ACT AND THEREAFTER THE DISPUTE IS REFERRED TO THE ESTATE OFFICER APPOINTED UNDER THE PUBLIC PREMISES ACT (HEREINAFTER REFERRED TO AS THE PP ACT) AND THE C OMPENSATION BILLINGS ARE ISSUED INSTEAD OF RENT BILLING. ACCORDING TO THE ASSESSEE, SINCE LITIGATION IS GOING ON IN RESPECT OF ASSESSEES LAND, THE OCCUPANTS HAD BEEN GIVEN EVICT ION NOTICE, SO THE ISSUE BEING SUBJUDICE AND, THEREFORE, THE AMOUNT /COMPENSATION BILL IS DISPUTED AND CAN BE SETTLED ONLY AFTER THE ESTATE OFFICER OR HIGH COURT/SUPREME COURT PUTS ITS FINAL SEAL OF APPROVAL ON IT. SO ACCORDING TO THE ASSESSEE, SINCE THERE IS TOTAL UNCERTAINTY IN REALISATION OF THE COMPENSATION BILLS, THE ASSESSEE FOLLOWING ACCOUNTI NG STANDARD 9 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS TAKES INTO CONSIDERATION ONLY THAT PART OF THE COMPENSATION BILLS WHICH ARE ACTUALLY REALISED AS INCOME. ACCOR DING TO LD. AR, WHEN THERE IS TOTAL 13 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 UNCERTAINTY REGARDING REALISATION OF THE COMPENSATI ON BILL RAISED BY THE ASSESSEE BECAUSE EVICTION NOTICES HAVE BEEN ISSUED TO THE PARTIES TH EY DO NOT ACCEPT THE AMOUNT RAISED IN THE COMPENSATION BILLS AND ONLY AFTER THE COURT ORD ER FOR PAYMENT THE PARTIES ACCEPTED THE BILLS AND, THEREFORE, ACCORDING TO ASSESSEE, NO INCOME CAN ACCRUE OR ARISE TO IT UNTIL IT ACQUIRES A RIGHT TO RECEIVE IT. IT WAS EXPLAINED B EFORE THE AO THAT AN AMOUNT CAN ACCRUE OR ARISE TO THE ASSESSEE ONLY WHEN THE ASSESSEE ACQ UIRES A LEGAL RIGHT TO RECOVER THAT AMOUNT AND THUS, IT WAS SUBMITTED THAT THIS AMOUNT CANNOT BE TAXED. HOWEVER, THE AO DID NOT ACCEPT THE SAME AND ACCORDING TO AO, ASSESS EE HAD THE RIGHT OF RECOVERY RENTAL INCOME FROM THE LAND WHICH IT HAS GIVEN ON RENT IRR ESPECTIVE OF THE FACT WHETHER THE LAND IS EVICTED BY THE TENANT OR NOT. ACCORDING TO AO, THE COMPENSATION BILLING IS THE TERM ADOPTED BY THE ASSESSEE FOR ITS OWN ADVANTAGE OF KE EPING RECORDS REGARDING SOME DISPUTED TENANTS. THE AO CONCLUDED AS UNDER: UNDER THIS BACKDROP, IT IS EVIDENT THAT AFTER THE ISSUE OF EVICTION NOTICE, THE ASSESSEE CREDITS THE COMPENSATION ACCOUNT INSTEAD OF RENT AC COUNT. THESE RENTAL BILLS RAISED HAS COMPENSATION AS ALREADY ACCRUED AS THE TENANT IS IN THE OCCUPATION AND PHYSICAL POSSESSION OF THE SAID LAND. EVEN IF THE EVICTION NOTICE IS NOT ACCEPTED BY THE DISPUTE RESOLUTION AUTHORITY VIZ. ESTATE OFFICER ETC., THE RENT FOR THE PERIOD REMAIN DUE AND THE RENT HAS TO BE PAID BY THE OCCUPANT. ON THE OTHER HAND, IF THE TENANT IS EVICTED, HE IS LIABLE TO PAY THE RENT FOR THE PERIOD FOR WHICH THE LAND WAS UNDER HIS CONTROL. AS SUCH, IN EITHER CASE THE RENT HAS ACCRUED AND IS CERTAIN TO BE RECE IVED. THERE REMAINS NO ROOMS OF DOUBT OR UNCERTAINTY ABOUT THE RECEIVE OF THE INCOME. IN CONSEQUENCES IT BEING A ACCRUED RENT TAXABLE IN THE YEAR IN WHICH IT HAS ACCRUED. NOTE NO. 14 TO THE NOTES OF ACCOUNTS CLARIFIED THAT COMPENSATION BILLING OF RS.176,92,12,615/- (EX CLUDING SERVICE TAX AND EDUCATION CESS) WAS MADE DURING THE YEAR. ACTUAL AMOUNT REAL IZED FOR THE YEAR 2011-12 WAS RS.75,08,09,517/- HAS BEEN RECOGNIZED AS REVENUE. 22. AND THEN THE AO REFERRED TO THE CASE OF E. D. S ASSOON AND CO. LTD. VS. CIT (1984) 26 ITR 27 (SC) AS WELL AS THE CASE OF THE CI T VS. A GAJAPATHI NAIDU (1964) 53 ITR 114 (SC) AND THEREAFTER HELD AS UNDER: THE PLAIN AND SIMPLE FACT IS THAT RENT IS NOTHING BUT A PERIODICAL PAYMENT PAID BY THE TENANT TO THE LANDLORD FOR USE OF LAND. IT ACCRUES AS SOON AS THE TENANT USES THE LAND FOR THE PERIOD. HERE THE PERIOD OF USE IS THE FACTOR THAT DETERMINES THE ACCRUAL OF THE SAME. SINE IN THE GIVEN CASE THE PERIOD OF ACCRUAL IS DURING T HE PREVIOUS YEAR RELEVANT TO AY 2012-13 THE SAID PAYMENT WHETHER TERMED AS RENT OR COMPENS ATION IS TAXABLE IN THE YEAR TO WHICH IT RELATES. FURTHER EVEN AFTER THE EVICTION NOTICE TH E RIGHT TO RECEIVE COMPENSATION FROM THE TENANT FOR THE PERIOD THE LAND IS USED BY THE TENAN T DOES NOT CEASE. 23. AND THE AO MADE THE ADDITION . AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DISMISS T HE GROUND RAISED BY THE ASSESSEE BY HOLDING AS UNDER: 14 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 1. I HAVE CAREFULLY CONSIDERED .THE ORAL AND WRITT EN SUBMISSIONS OF THE LD. ARS OF THE APPELLANT AND PERUSED THE OBSERVATIONS OF THE LD. A O IN THE ASSESSMENT ORDER. I HAVE ALSO GIVEN MY DUE CONSIDERATION TO THE JUDICIAL DECISION S AND PRONOUNCEMENTS RELIED UPON BY THE LD. ARS IN THE COURSE OF HEARING AS WELL AS IN THE WRITTEN SUBMISSIONS. FROM THE ASSESSMENT ORDER PASSED BY THE LD. AO, IT APPEARED THAT AT THE TIME OF ASSESSMENT PROCEEDINGS, THE APPELLANT RAISED NO PLEA AT ANY ST AGE THAT 'COMPENSATORY CHARGES' WHICH THE APPELLANT WAS CHARGING AND/OR RECEIVING FROM VA RIOUS OCCUPIERS OF THE PROPERTY WERE CAPITAL RECEIPT. IN FACT I FIND THAT IN THE APPELLA NT'S BOOKS FOR FY 2011-12, THE APPELLANT HAD CREDITED RS.76,01,63,183/- UNDER THE HEAD 'COMP ENSATORY CHARGES' AND IN THE RETURN OF INCOME SUCH SUM CREDITED IN THE P&L A/C WAS OFFE RED TO TAX AS INCOME. HOWEVER IN NOTE NO.14 OF THE ANNUAL ACCOUNTS THE APPELLANT MAD E THE FOLLOWING DISCLOSURE OF FACTS: 'COMPENSATION BILLING FOR UNAUTHORIZED OCCUPATION O F KOPT PROPERTY HAS BEEN MADE DURING THE YEAR FOR RS.176,92,12,615.07 (EXCLUDING SERVICE TAX & EDUCATION CESS). IN ABSENCE OF ANY CONTRACTUAL AGREEMENT, CONSIDERABLE UNCERTAINTIES ARE INVOLVED IN ACTUAL REALIZATION OF SUCH CLAIMS. ACTUAL AMOUNT REALIZED FOR THE YEAR 2011-12 AMOUNTING TO RS.75,08,09,517.42 HAS BEEN RECOGNIZED AS THE REVEN UE AND DEBITED TO THE COMPENSATION CHARGES (LAND & BUILDINGS) AND CREDITED TO CLAIM SU SPENSE ACCOUNT FOLLOWING THE ACCOUNTING POLICY FOLLOWED BY THE PORT. ' 2.IN THE LIGHT OF THE AFORESAID DISCLOSURE OF FACTS THE LD. AO REQUIRED THEAPPELLANT TO EXPLAIN AS TO WHY IT .HAD NOT ACCOUNTED FOR INCOME OF 5.152,12,68,915/- [228,14,32,098- 76,01,63,183] FOR WHICH DEMANDS WERE BEING RAISED B Y THE APPELLANT ITSELF, PARTICULARLY WHEN THE APPELLANT WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. EVEN .AT THAT STAGE THE APPELLANT ONLY CLAIMED THAT THERE WERE BREACH OF AG REEMENTS BY VARIOUS OCCUPIERS/TENANTS FOR WHICH EVICTION NOTICES WERE I SSUED AND THE DISPUTES BETWEEN THE LESSEES/OCCUPIERS/TENANTS AND THE ESTATE OFFICER WE RE REFERRED TO JUDICIAL PROCEEDINGS AND PENDING RESOLUTION OF SUCH DISPUTES THE APPELLANT W AS SENDING COMPENSATION BILLING INSTEAD OF RENT BILLING. THE APPELLANT WAS ALSO CHA RGING SERVICE TAX WHICH IS LEVIABLE FOR CONSIDERATION RECEIVED FOR USE OF / LETTING OUR PRO PERTIES IN TERMS OF THE SERVICE-TAX LAWS. REFERRING TO ACCOUNTING STANDARD - 9, ISSUED BY LCA I, THE APPELLANT HAD CLAIMED THAT IN VIEW OF THE UNCERTAINTY REGARDING REALIZATION OF CO MPENSATORY BILLINGS THE APPELLANT WAS NOT RECOGNIZING THE REVENUE IN FORM OF COMPENSATION BILLING UNTIL ACTUAL REALIZATION OF PAYMENT FROM THE PARTIES. THE APPELLANT THEREFORE C LAIMED BEFORE THE LD. AO THAT UNREALLZED COMPENSATION BILLING WAS NOT ASSESSABLE TO TAX AS INCOME OF THE APPELLANT SINCE IT INVOLVED HUGE UNCERTAINTIES. THE APPELLANT CLAIMED THAT NO REAL INCOME ACCRUED OR AROSE TO THE APPELLANT UNTIL THE APPELLANT ACQUI RED LEGAL RIGHT TO RECOVER THE SAID AMOUNT. THE CONTENTION RAISED BY THE APPELLANT DID NOT FIND FAVOUR WITH THE LD. AO AND ACCORDINGLY THE LD. AO ASSESSED EVEN THE UNREALIZED COMPENSATION BILLINGS TO THE EXTENT OF RS.152,12,68,915/- ON THE GROUND THAT THE APPELL ANT FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING AND THEREFORE THE APPELLANT WAS LEGALLY CHARGEABLE TO TAX IN RELATION TO COMPENSATION CHARGES FOR WHICH THE DEMANDS WERE RAI SED BY THE APPELLANT. 3. AT THE TIME OF FILING OF APPEAL, HOWEVER THE APP ELLANT RAISED AN ALTOGETHER NEW PLEA AND CLAIMED THAT THE ENTIRE COMPENSATION RECEIVED AND/O R RECEIVABLE IN FUTURE WAS NOT CHARGEABLE TO TAX AS THE APPELLANT'S INCOME SINCE S UCH COMPENSATION WAS IN THE NATURE OF 15 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 'MESNE PROFIT' AND THEREFORE IN THE NATURE OF 'CAPI TAL RECEIPT' NOT LIABLE TO TAX. I THUS FIND THAT THE ENTIRE COMPLEXION AND CHARACTER OF THE ASS ESSEE'S CLAIM UNDERWENT A RADICAL CHANGE AT THE STAGE OF FILING OF APPEAL. I NOTE FRO M THE SUBMISSIONS OF THE LD. ARS AS' ALSO THE DOCUMENTS ON RECORD THAT EVEN THOUGH THE DISPUT ES BETWEEN THE APPELLANT AND THE LESSEES/OCCUPANTS/TENANTS HAVE BEEN HAPPENING OVER THE PAST SEVERAL YEARS AND THE ASSESSEE HAS BEEN ACCOUNTING FOR RECEIPT OF DAMAGES EVEN IN THE PAST; THE APPELLANT NEVER RAISED ANY PLEA EITHER BEFORE THE LD. AO OR BEFORE THE APPELLATE AUTHORITIES THAT SUCH COMPENSATION WAS 'CAPITAL RECEIPT' NOT LIABLE TO TA X ON THE GROUND OF BEING 'MESNE PROFIT'. IN OTHER WORDS, I FIND THAT TILL THE EARLIER ASSESS MENT YEARS, THE APPELLANT NEVER RAISED THE LEGAL CONTENTION THAT SUCH DAMAGES OR COMPENSATION WAS IN THE NATURE OF 'MESNE PROFIT' AND THEREFORE CAPITAL RECEIPT NOT LIABLE TO TAX. OR DINARILY THE PRINCIPLE OF JUDICIAL CONSISTENCY IS REQUIRED TO BE FOLLOWED IN TAX PROCE EDINGS, IF FACTS PERMEATING THROUGH THE YEARS ARE SAME AND IDENTICAL. IN THE APPELLANT'S CA SE THE DISPUTES WITH LESSEES/OCCUPANTS/TENANTS HAVE BEEN CONTINUING IN T HE PAST AND IN ALL THE PAST INCOME- TAXASSESSMENTS THE' APPELLANT HAD ACCEPTED THE NATU RE OF COMPENSATION RECEIVED TO BE REVENUE IN NATURE AND THE SAME WAS OFFERED TO TAX. IN THE CIRCUMSTANCES THEREFORE ON THE PRINCIPLE OF JUDICIAL CONSISTENCY, THE APPELLANT WO ULD NOT HAVE BEEN PERMITTED TO RAISE SUCH NEW PLEA BECAUSE THE IDENTICAL FACTS PERMEATED THROUGH THE YEARS. AT THE SAME TIME HOWEVER IT IS ALSO SETTLED PROPOSITION OF LAW THAT THE PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE IN THE TAX PROCEEDINGS ANDTHEREFORE IF T HE APPELLANT CAN PROVE THAT THE POSITION ADOPTED BY THE PARTIES IN THE PAST WERE NOT BASED O N SOUND LEGAL FOOTING THEN THE APPELLANT OR THE DEPARTMENT CAN BE PERMITTED TO RAI SE A NEW PLEA WITH REGARD TO TAXABILITY OR NON-TAXABILITY. I AM ALSO AWARE THAT IN TAXATION PROCEEDINGS THE PRINCIPLE OF PROMISSORY ESTOPPEL DOES NOT APPLY AND THEREFORE IF IN LAW CERTAIN RECEIPT IS NOT TAXABLE THEN THE APPELLANT CAN RAISE PLEA REGARDING NON-TAX ABILITY AT ANY TIME AND AT ANY STAGE OF PROCEEDING. KEEPING IN VIEW THESE LEGAL PROPOSITION S THEREFORE, I AM ENTERTAINING THE ASSESSEE'SPLEA REGARDING NON-TAXABILITY OF COMPENSA TION CHARGES EVEN THOUGH SUCH PLEA WAS NEVER RAISED BY THE APPELLANT BEFORE THE ID. AO . 4. FROM THE MATERIAL PLACED BEFORE ME, I FIND THAT THE APPELLANT OWNS VAST STRETCHES OF LAND IN THE CITY OF KOLKATA AND ADJOINING AREAS. AP ART FROM USING PART OF THE LAND, BUILDINGS& OTHER INFRASTRUCTURE TO OPERATE THE PORT , THE APPELLANT HAS GIVEN LANDS, BUILDINGS & OTHER CIVIC INFRASTRUCTURE EITHER ON LE ASE, LICENSE OR TENANCY BASIS TO A VERY LARGE NUMBER OF CONCERNS AND THESE PROPERTIES ARE B EING USED FOR CARRYING ON VARIOUS BUSINESS & INDUSTRIAL ACTIVITIES. THE TERMS AND CON DITIONS ON WHICH THE PERSONS ARE ALLOWED TO OCCUPY AND USE THE PREMISES BELONGING TO THE APPELLANT ARE EVIDENCED IN THE FORM OF AGREEMENTS, WHICH ARE EXECUTED BETWEEN THE APPELLANT AND THE RESPECTIVE PERSONS. THE TERMS AND CONDITIONS FOR GRANT OF LEAS E OR LICENSE OR TENANCY VARY FROM PERSON TO PERSON AND THE TERM OF OCCUPATION ALSO VA RIES FROM PERSON TO PERSON. IT WAS CLAIMED BY THE LD. ARS OF THE APPELLANT THAT IN MAN Y CASES THE APPELLANT HAD TERMINATED THE LEASE/LICENSES/TENANCIES EITHER ON ACCOUNT OF B REACH OF TERMS OF AGREEMENT OR UPON EXPIRY OF PERIOD OF LEASE OR FOR VARIOUS OTHER REAS ONS. IT WAS CLAIMED THAT IN MANY SUCH INSTANCES AFTER THE APPELLANT ISSUED THE EVICTION N OTICES; THE LESSEES/LICENSEES/TENANTS INSTITUTED LEGAL PROCEEDINGS OR SUITS IN THE APPROP RIATE COURTS/JUDICIAL FORUMS OR BEFORE THE ESTATE OFFICER. IT WAS THE APPELLANT'S CONTENTI ON THAT WHERE THE ASSESSEE HAD TAKEN STEPS FOR TERMINATION AND/OR CANCELLATION OF AGREEM ENTS AND YET THE LESSEES/LICENSEES/OCCUPANTS/TENANTS CONTINUED WITH POSSESSION 'OF THE PROPERTIES, NO RENT BILLS WERE RAISED ON SUCH PERSONS. HOWEVER DURING T HE PERIOD OF OCCUPATION THE APPELLANT RAISED MONTHLY INVOICES BY WAY OF 'COMPENSATORY BIL LINGS'. THE APPELLANT ALSO CHARGED 16 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 SERVICE TAX WHICH IS LEVIED ON CONSIDERATION RECEIV ABLE FOR USE OF / LETTING OUR PROPERTIES IN TERMS OF THE SERVICE-TAX LAWS. ACCORDING TO THE SUBMISSIONS OF THE LD. ARS, THE VERY FACT THAT THE ASSESSEE DID NOT CLAIM THE PAYMENT OF RENT FROM LESSEES/OCCUPIERS BUT CLAIMED THE SAME AS 'COMPENSATORY PAYMENT' INDICATED THAT THE P AYMENT DEMANDED WAS IN THE NATURE OF MESNE PROFIT OR IN THE NATURE OF DAMAGES FOR UNA UTHORIZED OCCUPATION OF THE PREMISES BY THE SAID PERSONS. RELYING ON THE .JUDGMENTS IN T HE CASES OF CIT V. SMT. LILA GHOSH (205 ITR 9), SMT. ANNAMMA ALEXANDER V. CIT (199 ITR 303) , NARANG OVERSEAS PVT LTD (300 ITR (AT) 1T), THE LD. A.RS FOR THE APPELLANT HAVE C LAIMED THAT AS PER THE RATIO LAID DOWN THEREIN, THE DAMAGES RECEIVED WERE CAPITAL RECEIPTS BEING MESNE PROFIT. 5. AFTER PERUSING THE SUBMISSIONS AND THE MATERIAL PLACED, I AM HOWEVER NOT ABLE TO PERSUADE MYSELF TO AGREE WITH THE VIEW CANVASSED BY THE LD. ARS. IN THE COURSE OF APPELLATE PROCEEDINGS, THE LD. ARS OF THE APPELLANT HAD CLAIMED THAT THE ENTIRE SUM OF RS.228,14,32,098/- PERTAINED TO HUNDREDS OF CASES W HERE THE APPELLANT HADISSUED EVICTION NOTICES AND INSTITUTED PROCEEDINGS AGAINST THE LESS EES/LICENSEES/ OCCUPIERS/TENANTS. PENDING COMPLETION OF LEGAL PROCEEDINGS, THE SAID P ERSONS WERE IN UNAUTHORIZED OCCUPATION OF THE PREMISES AND THEREFORE THE APPELL ANT WAS LEFT WITH NO OTHER ALTERNATIVE BUT TO RAISE MONTHLY CLAIMS ON SUCH PARTIES. ALTHOU GH MUCH EMPHASIS WAS PLACED ON THE FACT THAT THE APPELLANT WAS HAVING LARGE NUMBER OF DISPUTES, UNFORTUNATELY NO EVIDENCES OR DOCUMENTS IN SUPPORT OF SUCH PENDING DISPUTES WE RE FURNISHED BEFORE ME, EXCEPT FOR FURNISHING SOME DOCUMENTARY EVIDENCES AND COPIES OF ORDERS PERTAINING TO DISPUTE WITH M/S ERI-TECH LIMITED. HOWEVER WHEN SEVERAL HUNDRED DIFFERENT DISPUTES WERE PENDING IN DIFFERENT COURTS AND TERMS & CONDITIONS FOR GRANTIN G LEASE/LICENSES WERE DIFFERENT IN EACH CASE, FURNISHING OF DOCUMENTS IN RELATION TO ONLY O NE CASE CANNOT BE CONSIDERED TO BE REPRESENTATIVE OF ALL DISPUTES. 6. EVEN FROM GOING THROUGH THE DOCUMENTS PLACED BEF ORE ME, IT APPEARED THAT THE APPELLANT HAD GRANTED LEASE TO M/S ERI-TECH LIMITED IN 1967 FOR A PERIOD OF 30 YEARS AND AFTER THE EXPIRY OF THE INITIAL PERIOD, THE APPELLA NT HAD OFFERED TO GRANT LONG TERM LEASE OF99 YEARS ON REVISED TERMS UNDER WHICH THE LESSEE WAS CALLED UPON TO MAKE LUMPSUM UPFRONT PAYMENT FOR GRANT OF LEASE. I THEREFORE FIN D THAT AT THE RELEVANT TIME WHEN THE LEASE PERIOD CAME TO AN END, THE APPELLANT HAD NOT REQUIRED THE LESSEE TO VACATE THE PREMISES BUT HAD OFFERED TO EXTEND THE LEASE ALBEIT ON MODIFIED TERMS AND AS SUCH IT WAS NOT A CASE WHERE THE APPELLANT WAS WILLING TO RE-PO SSESS THE PROPERTY AND USE IT FOR PERSONAL PURPOSES. SINCE THE LESSEE DID NOT AGREE F OR THE TERMS OFFERED, THE APPELLANT INSTITUTED EVICTION PROCEEDINGS, WHICH WERE RESISTE D BY THE LESSEE, BY INSTITUTING WRIT PETITIONS IN HON'BLE CALCUTTA HIGH COURT. ULTIMATEL Y THE MATTERS WERE REFERRED UNDER PUBLIC PREMISES ACT. THE LESSEE RESISTED THIS BY FI LING WRIT PETITION BEING WP NO. 645 OF 2005. IN THE COURSE APPELLATE PROCEEDINGS, THE ID. AR OF THE APPELLANT FILED COPY OF THE ORDER DATED 27.01.2016 PASSED IN WP NO. 645 OF 2005 BY THE CALCUTTA HIGH COURT, IN TERMS OF WHICH THE ESTATE OFFICER WAS DIRECTED TO P ROCEED WITH EVICTION PROCEEDINGS IN ACCORDANCE WITH LAW. FROM PERUSAL OF THE SAID ORDER DATED. 27.01.2016, IT IS NOTED THAT THE WRIT COURT HAD VACATED ALL INTERIM ORDERS GRANT ING STAY AND REQUIRED THE ESTATE OFFICER TO COMPLETE EVICTION PROCEEDINGS EXPEDITIOU SLY AND DIRECTED THE ESTATE OFFICER TO QUANTIFY THE 'OCCUPATION CHARGES' PAYABLE BY THE PE TITIONERS I.E. THE LESSEES FOR THEIR OCCUPATION OF THE PROPERTY FROM THE DATE OF POSSESS ION UNTIL EVICTION. FROM THE DOCUMENTS PLACED ON RECORD BY THE APPELLANT,IT THEREFORE TRAN SPIRED THAT EVEN THOUGH THE WRIT COURT ALLOWED THE APPELLANT TO PROCEED WITH EVICTION OF T HE LESSEE NOWHERE IN THE ORDER PASSED BY THE WRIT COURT ANY DIRECTION WAS ISSUED TO THE L ESSEE. TO PAY 'MESNE PROFIT' AS CLAIMED 17 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 BY THE ID. ARS OF THE APPELLANT. THE TERM 'MESNE PR OFIT' AS DEFINED IN SECTION 2(12) OF CIVIL PROCEDURE CODE HAS A DISTINCT AND SPECIFIC ME ANING AND IT IS NECESSARY FOR THE AUTHORITY OR COURT TO QUANTIFY SUCH 'MESNE PROFIT' HAVING REGARD TO THE PROVISIONS OF THE CIVIL PROCEDURE CODE. SECTION 2(12) OF THE CIVIL PR OCEDURE CODE AS FOLLOWS: (12) MESNE PROFITS OF PROPERTY MEANS THOSE PROF ITS WHICH THE PERSON IN WRONGFUL POSSESSION OF SUCH PROPERTY ACTUALLY RECEIVED OR MI GHT WITH ORDINARY DILIGENCE HAVE RECEIVED THEREFROM, TOGETHER WITH INTEREST ON SUCH PROFITS, BUT SHALL NOT INCLUDE PROFITS DUE TO IMPROVEMENTS MADE BY THE PERSON IN WRONGFUL POSS ESSION. 7. FROM THE FOREGOING DEFINITION IT IS EVIDENT THAT MESNE PROFIT CANNOT BE EQUATED WITH THE RENT SIMPLLCITOR BUT IT IS EQUAL TO THE LOSS OF INC OME WHICH THE UNAUTHORIZED OCCUPIER MADE BY USE OF HIS UNAUTHORIZED OCCUPATION. ON PERU SAL OF THE ORDER OF THE HIGH COURT, IT APPEARED THAT AT NO STAGE IT WAS EVEN THE CASE OF T HE APPELLANT THAT FOR THE PERIOD OF ALLEGED UNAUTHORIZED OCCUPATION IT SHOULD BE COMPEN SATED BY 'MESNE PROFIT' BUT THE PLEA OF THE APPELLANT WAS FOR COMPENSATING THE 'OCCUPATI ON CHARGES' FOR THE PERIOD DURING WHICH THE LESSEE HAD OVERSTAYED IN THE PREMISES. FR OM THE ORDER OF THE HIGH COURT, IT ALSO APPEARED THAT THE COURT NEITHER CONSIDERED THE PLEA FOR GRANT OF 'MESNE PROFIT' NOR ALLOWED OR GRANTED TO THE APPELLANT 'MESNEPROFIT' A LTHOUGH THE ASSESSEE'S PLEA FOR EVICTION WAS GRANTED BY THE COURT. 8. THE APPELLANT'S RELIANCE ON THE JUDGMENT OF THE JURISDICTIONAL HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VSUTAGHOSH(SUPRA) IS THERE FORE NOT APPLICABLE BECAUSE THE FACTS ARE DISTINGUISHABLE. IN THE CASE DECIDED BY THE HON 'BLE CALCUTTA HIGH COURT, AFTER THE EXPIRY OF LEASE, THE APPELLANT HAD NEVER EXTENDED T HE LEASE BUT INSTITUTED EVICTION PROCEEDINGS IN THE COURT. THE ASSESSEE'S PLEA FOR E VICTION WAS GRANTED BY VARIOUS COURTS UPTO THE HON'BLE SUPREME COURT AND THE HON'BLE SUPR EME COURT HAD L' ALSO PASSED THE ORDER FOR DECREE. BESIDES, THE COURT HAD ALSO QUANT IFIED RS.2,OO,OOOI- AS 'MESNE PROFIT' WHICH UPHOLDING THE ORDER OF EVICTION. BEFO RE THE DECREE WAS EXECUTED, THE GOVERNMENT OF WEST BENGAL ACQUIRED THE PREMISES UND ER LAND ACQUISITION ACT AND PAID COMPENSATION. IN ADDITION THE STATE GOVERNMENT PAID RS.2,00,000/- FOR THE ASSESSEE TO ASSIGN THE DECREE FOR 'MESNE PROFIT'. ON THESE FACT S THE COURT HELD THAT MESNE PROFITS RECEIVED BY THE APPELLANT WERE IN THE NATURE OF DAM AGES WHICH THE APPELLANT HAD SUFFERED DUE TO WRONGFUL POSSESSION OF THE PROPERTY BY THE T ENANT WHO CONTINUED TO REMAIN POSSESSION ALL THROUGH. 9. IN THE PRESENT CASE HOWEVER IT IS NOTED THAT THE LESSEE I.E. M/S ERI- TECH LTD, WAS DIRECTED BY THE COURT TO PAY ONLY OCCUPATION CHARGE S BECAUSE THE COURT FOUND THAT THE SAID LESSEE CONTINUED TO ENJOY OCCUPATION OF THE PR OPERTY EVEN AFTER THE PERIOD OF LEASE WAS OVER. 0 NOWHERE THE APPELLANT HAS BROUGHT ON AN Y MATERIAL, WHICH IN ANY MANNER SHOWED THAT IT HAD DEMANDED PAYMENT OF 'MESNE PROFI T' FOR THE DAMAGE CAUSED DUE TO WRONGFUL OCCUPATION. ON THE CONTRARY, IT IS FOUND T HAT WHAT WAS BEING DEMANDED WAS 'OCCUPATION CHARGES' BEING THE AMOUNT THAT THE APPE LLANT OTHERWISE WOULD HAVE RECEIVED IN THE FORM OF RENT. IN FACT IN THE WRITTEN SUBMISS IONS, AS ALSO IN THE COURSE OF ORAL ARGUMENTS, IT WAS AGREED THAT SO LONG AS THE AGREEM ENT OR ARRANGEMENT WAS SUBSISTING THE APPELLANT RAISED RENT BILLS AND WHEREVER THE AS SESSEE DID NOT ARRIVE AT A MUTUALLY ACCEPTABLE ARRANGEMENTS WITH THE. LESSEES, THE ASSE SSEE CONTINUED TO RAISE MONTHLY INVOICES ON THE OCCUPANTS BY WAY 'COMPENSATORY BILL INGS'. AS SUCH BY MERE CHANGE OF NOMENCLATURE, IT COULD NOT BE SAID THAT ANY FUNDAME NTAL CHANGE WAS BROUGHT ABOUT IN THE BASIC CHARACTER OF THE AMOUNT DEMANDED FROM THE OCC UPIER. THE NATURE OF DEMAND WAS 18 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 SUCH THAT IT COULD NOT BE CLASSIFIED AS 'MESNE PROF IT' BECAUSE THE AMOUNT DEMANDED HAD NO RELATION WHATSOEVER WITH THE PROFITS WHICH THE LESS EE IN WRONGFUL POSSESSION OF SUCH PROPERTY ACTUALLY DERIVED OR RECEIVED OR WOULD HAVE DERIVED WITH. ORDINARY DILIGENCE. ON THE CONTRARY THE VERY FACT THAT THE APPELLANT RAISE D MONTHLY INVOICES OR BILLS EQUIVALENT TORENT OF THE PROPERTY CLEARLY SHOWED THAT IN ABSEN CE OF ANY WRITTEN AGREEMENT BETWEEN THE PARTIES, THE APPELLANT WAS DEMANDING A SUM WHIC H IN THE APPELLANT'S OPINION REPRESENTED FAIR AND EQUITABLE RENT FOR OCCUPYING T HE PREMISES BELONGING TO THE APPELLANT. THE ASSESSEE WAS SEEKING TO COMPENSATE ITSELF ON MO NTHLY BASIS FOR THE USE OF THE PREMISES BY THE LESSEES AGAINST WHICH THE APPELLANT HAD EITHER INSTITUTED EVICTION PROCEEDINGS OR WITH WHOM THE APPELLANT HAD NOT REAC HED MUTUALLY AGREEABLE TERMS FOR THE USE OF PREMISES. 10. FURTHER AS OBSERVED EARLIER EVEN THOUGH THE APP ELLANT CLAIMED THAT THE APPELLANT AND/OR THE LESSEES/OCCUPIERS INSTITUTED SEVERAL HUN DRED CASES, THE LD. ARS OF THE APPELLANT HAD FAILED TO BRING ON RECORD THE NATURE AND TERMS OF DISPUTES BETWEEN THE PARTIES. HOWEVER EVEN THE ONE SAMPLE CASE SUBMITTED FOR MY CONSIDERATION WHERE THE EVICTION WAS ULTIMATELY IN 2016, SHOWED THAT AT NO STAGE THE APPELLANT HAD DEMANDED AND THEREFORE AWARDED MESNE PROFIT BY THE COURT. ON THE CONTRARY THE ORDER OF THE HIGH COURT INDICATES THAT THE COURT HAD DIRECTED THE LESSEE TO PAY OCCUPATION CHARGES FOR THE PERIOD DURING WHICH THE LESSEE CONTINUED TO REMAIN IN POSS ESSION AFTER THE ORIGINAL PERIOD OF LEASE EXPIRED. IN THE CIRCUMSTANCES THEREFORE EVEN GOING BY THE DOCUMENTS PLACED BEFORE ME, I FIND THAT THE APPELLANT DID NOT RECEIVE ANY M ESNE PROFITS AND THEREFORE ON THE FACTS OF THE APPELLANT'S CASE, THE RATIO LAID DOWN IN THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF LILA GHOSH (SUPRA) AND OTHER JUDGMENTS ETC. WAS NOT APPLICABLE. 11. IT IS ALSO NOTED THAT IT IS NOT A CASE THAT THE APPELLANT HAVING INSTITUTED OR INITIATED EVICTION PROCEEDINGS WAS DEMANDING DAMAGES FOR WRON GFUL POSSESSION OF THE PROPERTY BY THE LESSEES. NO EVIDENCE WHATSOEVER WAS BROUGHT ON RECORD BY THE ID. ARS OF THE APPELLANT IN. THIS REGARD. ON THE CONTRARY FROM THE SUBMISSIONS OF THE APPELLANT IT APPEARED THAT IT WAS RAISING INVOICES ON EACH OF TH E LESSEE OR OCCUPIER ON MONTHLY BASIS DEMANDING FROM THEM THE CHARGES FOR OCCUPATION OF T HE PREMISES. IN ORDER TO CLAIM THE CHARGES FOR USE OF PREMISES AS A CAPITAL RECEIPT, I T WAS NECESSARY FOR THE ASSESSEE TO SHOW THAT THE WRONGFUL OCCUPATION OF THE PREMISES WAS CA USING DAMAGES TO THE CAPITAL OR THE CAPITAL APPARATUS OF THE ASSESSEE SO AS TO CONSIDER SUCH CHARGES TO BE CAPITAL RECEIPT. HOWEVER THE VERY FACT THAT THE ASSESSEE KEPT ON INV OICING THE LESSEES/OCCUPIERS ON MONTH BASIS SHOWED THAT THE PURPOSE OF THE RAISING THE IN VOICES WAS TO COMPENSATE ITSELF FOR THE USE OF THE PREMISES BY THE LESSEES/OCCUPIERS. IN TH E PRESENT CASE, GRANTING OF LEASE OR LICENSE OF PROPERTIES IN LIEU OF RECEIVING MONTHLY CHARGES IN THE FORM OF RENT OR OTHERWISE IS A NORMAL BUSINESS ACTIVITY AND THEREFORE THE AMO UNT CLAIMED BY THE APPELLANT FROM THE TENANTS/LESSEES/OCCUPIERS WITH WHOM THE TERMS WERE NOT SETTLED COULD NOT BE CONSIDERED TO BE CAPITAL RECEIPT, NOT LIABLE TO TAX. IN THIS R EGARD THE OBSERVATIONS OF THE MADRAS 'HIGH COURT IN THE CASE OF CIT V. P. MARIAPPAGOUNDER (164 ITR 676) IS RELEVANT, WHICH IS AS FOLLOWS: 'THE TRUE PRINCIPLE TO BE APPLIED IS THAT WHERE COM PENSATION IS PAID FOR DEPRIVATION OF . A CAPITAL ASSET OR FOR RESTRAIN ON TRADING OR CONDUCT OF THE BUSINESS UNDERTAKING AS SUCH, IT WOULD BE A CAPITAL RECEIPT IN THE HANDS OF THE RECI PIENT OF THE COMPENSATION'. 12. IN THE PRESENT CASE THE CONDUCT OF THE APPELLAN T YEAR AFTER YEAR CLEARLY SHOWS THAT THE APPELLANT WAS HAVING SEVERAL TENANTS/LESSEES/LICENS EES/OCCUPIERS ETC. FROM WHOM IT WAS 19 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 CLAIMING PAYMENT OF MONTHLY BASIS FOR THE USE OF OC CUPATION & IMMOVABLE PROPERTIES BELONGING TO THE APPELLANT. WHEREVER THE APPELLANT WAS HAVING SUBSISTING AND MUTUALLY AGREED TERMS THE MONTHLY SUM WAS TERMED AS 'RENT' W HEREAS IN CASES WHERE THE TERMS WERE NOT SETTLED, THE INVOICES WERE RAISED UNDER TH E NOMENCLATURE 'COMPENSATORY BILLINGS'. THE BASIS CHARACTER OF THE CHARGES DEMAN DED HOWEVER REMAINED SAME I.E. THE CHARGES FOR OCCUPATION & USE OF THE PREMISES BELON GING TO THE APPELLANT. THE ID. ARS OF THE APPELLANT HAS NOWHERE BROUGHT ON RECORD ANY MAT ERIAL THAT EVEN WHERE THE EVICTION PROCEEDINGS WERE INSTITUTED, THE APPELLANT HAD STOP PED DEMANDING THE' OCCUPATION CHARGES ON MONTHLY BASIS BUT PRAYED FOR PAYMENT OF MESNE PROFITS FOR UNAUTHORIZED OCCUPATION. EVEN IN THE LONE INSTANCE FOR WHICH DOC UMENTS WERE PROVIDED; IT SHOWED THAT THE COURT DID NOT GRANT ' MESNE PROFIT BUT THE LESS EE/OCCUPIER WAS DIRECTED TO PAY OCCUPATION CHARGES FOR THE PERIOD DURING WHICH IT W AS IN OCCUPATION OF THE PROPERTY AFTER THE LEASE EXPIRED. IN ABSENCE OF ANY ORDER OF ANY C OURT OR COMPETENT AUTHORITY WHICH IN ANY MANNER SHOWED THAT THE MONTHLY CLAIMS MADE BY T HE APPELLANT WERE IN NATURE OF 'MESNE PROFIT', IT IS NOT POSSIBLE TO ACCEPT THE SU BMISSIONS OF THE ID. ARS AT ITS FACE VALUE. FOR THESE REASONS THEREFORE I ALSO DO NOT DEEM IT F IT TO DEAL WITH THE VARIOUS JUDGMENTS RELIED UPON BY THE ID. ARS SINCE THE APPELLANT HAS BEEN UNABLE TO PROVE HAVING REGARD TO ITS FACTS THAT THE COMPENSATORY BILLINGS WERE INDEE D IN THE NATURE OF 'MESNEPROFLT', IT WAS FOR' THE APPELLANT TO BRING ON RECORD SOME POSITIVE TANGIBLE AND IRREFUTABLE EVIDENCE IN SUPPORT OF ITS CLAIM THAT THE ENTIRE SUM OF RS.228, 14,32,098/- ASSESSED IN THE IMPUGNED ORDER WAS IN FACT IN NATURE OF MESNE PROFIT QUANTIF IED AND ALLOWED AS SUCH BY ANY COMPETENT COURT OR JUDICIAL FORUM. THE MERE FACT TH AT THE APPELLANT TERMED THE, SAID SUM AS 'COMPENSATION' IN ITS BOOKS BY ITSELF DID NOT GI VE THE COLOR OF MESNE PROFIT MERELY BECAUSE THE APPELLANT CLAIMED THE SAID SUM TO BE DU E FROM UNAUTHORIZED OCCUPIERS. FOR THE REASONS SET OUT IN THE FOREGOING THEREFORE, THE APPELLANT'S CLAIM THAT SUM OFFRS.228,14,32,098/- WAS CAPITAL RECEIPT AND THERE FORE LIABLE TO BE EXCLUDED FROM THE ASSESSED TOTAL INCOME IS REJECTED. GROUND NOS. 6 T O 9 IS THEREFORE DISMISSED. 24. AGAINST THE AFORESAID ACTION OF THE LD. CIT(A) THE ASSESSEE IS BEFORE US. ONE OF THE MAIN ARGUMENTS OF THE ASSESSEE IS THAT THE UNRE ALISED PORTION OF THE COMPENSATION OF RS.101 CR.(APPROX) IS CAPITAL IN NATURE AND, THEREF ORE, NOT TAXABLE IN THE HANDS OF THE ASSESSEE. IT IS A TRITE LAW THAT THE CHARACTER OF THE RECEIPT WHETHER IT IS REVENUE OR CAPITAL IN NATURE IS ADJUDGED IN THE HANDS OF THE RECIPIENT AND THE SOURCE FROM WHICH IT RECEIVES THE RECEIPT HAS NO RELEVANCE TO DETERMINE THE QUEST ION. IN OTHER WORDS, THE NATURE AND CHARACTER OF A PAYMENT AND ITS TAX TREATMENT IN THE HANDS OF THE PAYER CANNOT BE DETERMINATIVE OF THE CHARACTER OF THE RECEIPT IN TH E HANDS OF THE PAYEE. SO, WHEN WE HAVE TO DETERMINE AS TO WHETHER THE UNREALISED PORTION O F THE COMPENSATION [WHATEVER NOMENCLATURE IS USED FOR THE RECEIPT] FROM THE PROP ERTIES OF THE ASSESSEE (UNAUTHORISED OCCUPATION) THE CHARACTER OF THE RECEIPT AS TO WHET HER IT IS CAPITAL OR REVENUE IS TO BE DETERMINED WHEN IT IS RECEIVED IN THE HANDS OF THE ASSESSEE. IT IS NOT DISPUTED THAT THE COMPENSATION OF MONEY WHICH WILL BE RECEIVED BY THE ASSESSEE FROM USE OF ITS PROPERTIES 20 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 DUE TO VARIOUS REASONS, INTER-ALIA AFTER THE EXTING UISHMENT OF THE AGREEMENT OR NON- EXTENSION OF THE TENANCY/LEASE ETC FOR UN-AUTHORISE D OCCUPATION, THE ESTATE OFFICER HAVING EXERCISED HIS POWERS UNDER THE PUBLIC PREMIS ES ACT FOR EVICTION OF THE PARTIES WHO ARE IN UNAUTHORISED OCCUPATION OF THE PROPERTIE S OF THE ASSESSEE AND WHO HAS THE POWER TO AWARD DAMAGES AS PER RULE 8 OF THE PUBLIC PREMISES (EVICTION OF UNAUTHORISED OCCUPANTS) RULES 1971 (HEREINAFTER REFERRED TO AS T HE PP RULES, 1971) AND WHO CAN DEAL WITH ALL PUBLIC PREMISES INCLUDING AWARD AND D AMAGES FOR UNAUTHORISED USE AND OCCUPATION THEREOF BY ANY PERSON AFTER THE EXPIRY O F THE TENANCY OR LEASE AGREEMENT ETC. IT IS NOTED THAT SECTION 7 OF THE PP ACT, 1971 GIVE S POWER TO THE ESTATE OFFICER TO ISSUE ORDER REQUIRING PAYMENT OF ARREAR RENT AND SUB-SECT ION (2) OF SEC. 7 OF THE P P ACT, 1971 PROVIDES THAT IN RESPECT OF UNAUTHORISED OCCUPATION OF ANY PUBLIC PREMISES, THE ESTATE OFFICER MAY BY ORDER ASSESS THE DAMAGES ON ACCOUNT OF UNAUTHORISED USE AND OCCUPATION OF SUCH PREMISES. SO, SINCE THE MATTER PERTAINS TO THE PROPERTIES WHICH ARE AWAITING THE ORDERS OF ESTATE OFFICER AND THEREAFTER THE LIS MAY PEND BEFORE THE VARIOUS JUDICIAL FORUMS, THE ARREARS OF RENT/DAMAGES/COMPENSATION HA S NOT YET FINALISED/CRYSTALISED IN RESPECT OF THE UNREALISED PORTION OF THE COMPENSATI ON OF RS.101 CR. (APPROX.). IT IS A SETTLED THAT IN THE ABSENCE OF TRANSFER OF CAPITAL ASSET, AND WHEN IT HAS TO BE ASCERTAINED AS TO WHETHER THE RECEIPT IS ON ACCOUNT OF LOSS OF INC OME OR ON ACCOUNT OF SOURCE OF INCOME, IT IS TRITE LAW THAT ANY RECEIPT IN THE NATURE OF C OMPENSATION, COST, DAMAGES ETC. BY WHATEVER NAMES CALLED TOWARDS LOSS OF INCOME IS A R EVENUE RECEIPT. HOWEVER, ANY RECEIPT TO COMPENSATE FOR THE LOSS OF SOURCE OF INC OME IS A CAPITAL RECEIPT AS HAS BEEN HELD BY THE HONBLE SUPREME COURT IN OBEROI HOTELS PVT. LTD. VS. CIT (1991) 236 ITR 903 (SC). IT IS ALSO WELL SETTLED THAT THE WORD I NCOME HAS TO BE UNDERSTOOD IN THE GENERIC SENSE. IF A RECEIPT BEARS THE TRAIT OF IN COME AS PER THE PLAIN AND NATURAL MEANING THE SAME WILL STILL BE INCLUDED WITHIN THE SCOPE OF SECTION 2(24) OF THE ACT EVEN AFTER THERE IS NO SPECIFIC MENTION OF SUCH ITEM IN THE DE FINITION CLAUSE. IT IS MORE APTLY DEMONSTRATED FROM THE SCHEME OF THE ACT ITSELF BY W HICH THE RECEIPT BY WAY OF RENT FROM PROPERTY, ALTHOUGH NOT INCLUDED IN SUB-SECTION 24 O F THE ACT IS INCOME AS SPECIFICALLY INCLUDED IN CHAPTER IVC OF THE ACT. SINCE SUB-SECT ION 24 OF SECTION (2) DEFINES INCOME IN ALL INCLUSIVE MANNER AND NOT EXHAUSTIVELY, ACCOR DING TO THIS PROVISION INCOME INCLUDES PROFITS AND GAINS........ THUS, THIS DEFINITION INCLUDES VARIOUS ITEMS AS MENTIONED IN 21 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 CLAUSE (I) TO (XIV). IF ANY OTHER ITEM OF RECEIPT IS OR CONTAINS THE ELEMENT OF INCOME IN COMMON PARLANCE THAT WILL BE INCLUDED WITHIN THE SC OPE OF DEFINITION OF INCOME UNDER THE PROVISION NOTWITHSTANDING THE FACT THAT THERE I S NO SPECIFIC INCLUSION OF SUCH ITEM IN THE DEFINITION. (CIT VS. G. R. KARTHIKEYAN (1993) 2 01 ITR 866). THEREFORE, SINCE THE RECEIPT OF THE PORTION OF THE COMPENSATION OF RS. 1 01 CR. IN QUESTION IS FROM THE PROPERTIES OF THE ASSESSEE HELD UNAUTHORISED BY VAR IOUS PARTIES, THE RECEIPT RECEIVED BY THE ASSESSEE WHETHER IT IS CALLED COMPENSATION, DAM AGES ETC. WHICH IS TOWARDS THE LOSS OF INCOME IS A REVENUE RECEIPT AND CANNOT BE TERMED AS A CAPITAL RECEIPT SINCE THERE IS NO LOSS OF SOURCE OF INCOME. THEREFORE, THIS ARGUMENT OF THE LD. AR OF THE ASSESSEE IS BEREFT OF ANY MERIT AND, THEREFORE NOT ACCEPTED. T HEN COMING TO THE TAXABILITY IN RESPECT OF THE UNREALISED PORTION OF COMPENSATION, WE ARE O F THE OPINION THAT THE QUANTUM OF AMOUNT TOWARDS LOSS OF INCOME RESPECT OF THE PROPER TY OF THE ASSESSEE HAS NOT BEEN FINALISED SINCE IT IS LIS-PENDENCE. THEREFORE, THE AMOUNT IN QUESTION HAS NOT REACHED FINALITY AND, THEREFORE, NOT CRYSTALLISED IN THE YE AR UNDER CONSIDERATION, SO WHEN IT GETS CRYSTALLISED/FINALISED, THEN IT WILL BE TREATED AS A REVENUE RECEIPT AND TAXED IN ACCORDANCE TO LAW. COMING TO THIS CONCLUSION, WE ALSO APPLY T HE REAL INCOME THEORY WHICH IS PROPOUNDED IN CIT VS. M/S. SHOORJI VALLABHDAS & CO. (1962) 46 ITR 144 AND GODHRA ELECTRICITY CO. LTD. VS. CIT (1997) 225 ITR 746 AND SINCE NO REAL INCOME HAS ARISEN FOR THE ASSESSEE IN THE YEAR UNDER CONSIDERATION IN RES PECT OF THE SUM OF RS.101 CR. (UNREALISED PORTION OF THE COMPENSATION) THIS AMOUN T NEED NOT BE TAXED IN THIS ASSESSMENT YEAR, AND WE ORDER ACCORDINGLY. FOR THI S, WE ALSO RELY ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DSL ENTERP RISES (P) LTD. VS. MRS. N.C. CHANDRATRE, INCOME-TAX OFFICER (2013) 216 TAXMAN 17 3 (BOM). 6. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE PARTLY ALLOWED AND COS OF THE ASSESSEE ARE DISMISSED AND ALL THE APPEALS OF THE R EVENUE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2020. SD/- (A.L. SAINI) SD/- (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21ST FEBRUARY, 2020 JD. SR. PS 22 I.T.A. NOS. 453/KOL/2018 & CO 23/KOL/2019, ITA NO.367/KOL/2018, ITA NOS. 368&369/KOL/2018 & ITA NO. 452/KOL/2018 & CO 60/KOL/2018 KOLKATA PORT TRUST., ASSESSMENT YEAR: 2012-13 & 2014-15 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT KOLKATA PORT TRUST, C/O SUNDARAM & NARA YANAN, CHARTERED ACCOUNTANTS, 18, BALAIAH AVENUE, LUZ CHURCH ROAD, M YLAPORE, CHENNAI-600 004. 2. RESPONDENT JCIT, RANGE-35, ACIT/DCIT, CIRCLE-35, KOLKATA. 3. CIT(A)-10, KOLKATA. (SENT THROUGH E-MAIL) 4. CIT, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA. (SENT THROUGH E-MAIL) TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES