The Commissioner Of Income Tax – 10, Mumbai v. M/S.common Effluent Treatment Plant

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1948 OF 2009 The Commissioner of Income Tax – 10, Mumbai ..Appellant. Versus M/s.Common Effluent Treatment Plant ..Respondent. Mr.Suresh Kumar for the appellant. Mr.S.N. Inamdar with Ms.Aasifa Khan for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 17 June, 2010. P.C. : 1.The appeal by the Revenue under Section 260A of the Income Tax Act, 1961 arises out of the decision of the Income Tax Appellate Tribunal dated 24 January 2008 for assessment year 2000-01. The appeal was admitted on the following substantial question of law : 1.“Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in not upholding the order of ld CIT (A), that excess of income over expenditure in respect of effluent treatment receipts of the assessee amounting to Rs.1.59 crores as exempt from income-tax on the principle of mutuality treating the same as not being part of the total income of the assessee ? 2.Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest on bank fixed deposits and other deposits are not chargeable to tax, without appreciating the fact that interest income from fixed deposit are not derived from mutual activity and therefore, chargeable to tax ? 2.The learned Counsel appearing on behalf of the assessee and the Counsel appearing for the Revenue are agreed in stating before the Court that in view of the judgment delivered today in a companion appeal, being Income Tax Appeal No.2060 of 2009, the first question of law would have to be answered in favour of the assessee and against the Revenue while the second question of law (save and except the issue of other deposits) shall have to be answered in favour of the Revenue and against the assessee. Ordered accordingly. 3.For the reasons already indicated in the judgment delivered today in the companion appeal, the issue pertaining to other deposits is restored to the file of the Income Tax Appellate Tribunal for fresh decision. The appeal is accordingly disposed of. There shall be no order as to costs. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)