The Commissioner Of Income-Tax -10, Mumbai v. M/S Common Effluent Treatment Plant Pvt Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL No. 4604 of 2010 The Commissioner of Income-tax -10, Mumbai ... Appellant. Versus M/s Common Effluent Treatment Plant Pvt Ltd. ... Respondent.(Thane Belapur) Association, Mr Vimal Gupta for the appellant.Mr S.N. Inamdar, Sr. Counsel with Aasifa Khan for the respondent. CORAM : J.P. Devadhar & A.R. Joshi, JJ. DATE : 10 January,2012. P.C. :- 1.The appeal is admitted on the following three questions of law :- (a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the excess of income over expenditure in respect of the effluent treatment receipts is exempted from income tax on the principle of mutuality? (b)Whether the Tribunal was justified in holding that the interest on bank fixed deposits, other deposits etc. amounting to Rs.56,87,216/- of the assessee is exempted from the income tax on the principle of mutuality? (c) Whether the Tribunal was justified in holding that Ladda Section 115JB is not applicable to the assessee Company as its income is exempted on the principle of mutuality? income is exempted on the principle of mutuality? 2.By consent the appeal is taken up for final hearing. 3.Assessment year involved herein is AY-2005-2006. 4.As regards the first question is concerned, Counsel for the parties state that the said question is covered in favour of the assessee, in assessee’s own case reported in [2010] 328 ITR 362 (Commission of Income-tax v. that the said question is covered in favour of the assessee, in assessee’s own case reported in [2010] 328 ITR 362 (Commission of Income-tax v. Common Effluent Treatment Plant, (Thane-Belapur) Association). Accordingly, the first question is answered in favour of the Assessee and against the Revenue. 5.As regards the second question is concerned, Counsel for the parties state that the said question is covered in favour of the Revenue and against the Assessee in the assessee’s own case in the same judgment CIT vs. Common Effluent Treatment Plant (cited supra). Accordingly, the second question is answered in favour of the Revenue and against the assessee. 6.As regards the third question is concerned, this Court in the assessee’s own case in the same judgment CIT vs. Common Effluent Treatment Plant (cited supra) has held that the surplus of receipts over expenditure, generated as a result of a mutual arrangement, did not constitute income for the purposes of the Act. In this view of the matter, the finding recorded by the ITAT that the surplus income generated under the mutual arrangement would not fall within Ladda the scope of Section 115JB, cannot be faulted. Accordingly, the third question is answered in favour of the assessee and against the revenue. Appeal is disposed of accordingly with no order as to costs. (A.R.Joshi,J) (J.P.Devadhar,J.)