Ajay Kumar Mittal, J. - (1.) THIS order shall dispose of ITA Nos. 292, 313 to 316 of 2009 as the legal issue involved therein is identical. All the appeals arise from the common order of the Tribunal dated 12.9.2008. However, the facts are being extracted from ITA No. 292 of 2009.
(2.) ITA No. 292 of 2009 has been preferred by the revenue under section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 12.9.2008, Annexure A. III passed by the Income Tax Appellate Tribunal, Delhi Bench 'F New Delhi (in short, "the Tribunal") in ITA No. 2215/DEL/2008 for the assessment year 2000 -01. On 10.3.2010, this Court while admitting the appeal had passed the following order: - "After hearing the learned counsel for the parties, we find that the following substantial question of law would emerge in this case: ' 1. Whether on the facts and in the circumstances of the case and in law, the ld. ITAT was correct in holding that the activities of the society were governed by the principle of mutuality.' However, on request made by learned Senior counsel for the assessee and in pursuance of proviso to Section 260A(4) read with sub section (6) of the Income Tax Act, 1961, the following question is framed at the instance of the assessee -respondent: '2. Whether the amount of compensation and interest received by the assessee under the interim orders of the Hon'ble High Court during the pendency of appeals filed by the State could be charged to tax under the provisions of Section 45(5)(b) of the Income Tax Act, 1961 in view of the findings of fact recorded by the CIT(A) and accepted by the department/Revenue that the assessee was not a 'person' as defined under Section 2(31) of the said Act before 1.4.2002 and therefore such receipts did not attract the levy of tax by virtue of non -applicability of charging provisions of Section 4 of the Act?' Admitted." Briefly, the relevant facts are that the assessee had received enhanced compensation of Rs. 8,73,93,278/ - and interest on enhanced compensation of Rs. 4,70,68,031/ - during the financial year 2002 -03. The assessee did not file its return of income under Section 139(1) of the Act. Notice under Section 148 of the Act was issued on 22.3.2006. The assessee filed its return of income declaring loss of Rs. 69,030/ - on 12.6.2006 and tax was not paid on interest on enhanced compensation on accrual basis though the assessee was maintaining its books of account on mercantile system and on the plea that payment was received on furnishing security of Rs. 5,73,46,367/ - and the amount of enhanced compensation and interest was challenged by the State Government before this court. The assessment was completed under sections 147/143(3) of the Act on 27.10.2006, Annexure A.1, at total Income of Rs. 1,27,50,360/ -. The said amount of interest on enhanced compensation was included in the total income on accrual basis. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (appeals). Vide order dated 24.3.2008, Annexure A. II, the CIT(A) allowed the appeal holding that since the society was a mutual benefit concern, therefore it was not covered under Section 2(24) of the Act. He further deleted the addition of enhanced compensation and interest thereon by relying on the judgment of this Court in ITA No. 695 of 2005 CIT Faridabad v. Prem Singh, decided on 16.5.2007 holding that enhanced compensation and interest thereon could not be charged to tax unless it attained finality from the highest court. Dissatisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 12.9.2008, Annexure A. III, the Tribunal dismissed the appeal. Hence the present appeals by the revenue.
(3.) WE have heard learned counsel for the parties and perused the record.;