Gujarat Information Technology Fund, Ahmedabad V. The Income tax Officer, Ward-10(2), Ahmedabad

CO 167/AHD/2009

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6307 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 27-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Assessee Lawyers: P M MEHTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI T.K. SHARMA, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.2178 / AHD/2009 (ASSESSMENT YEAR 2006-07) ITO, WARD 10(2), AHMEDABAD VS. GUJARAT INFORMATION TECHNOLOGY FUND, 1 ST FLOOR, PREMCHAND HOUSE, ASHRAM ROAD, AHMEDABAD C.O. NO.167/AHD/2009 IN I.T.A.NO. 2178/AHD/2009 (ASSESSMENT YEAR 2006-07) GUJARAT INFORMATION TECHNOLOGY VS. ITO, WARD 10(2) , FUND, 1 ST FLOOR, PREMCHAND HOUSE, AHMEDABAD ASHRAM ROAD, AHMEDABAD PAN/GIR NO. : AAAAG1037A (APPELLANT) .. (RESPONDENT) DEPARTMENT BY: SHRI S P TALATI, SR. DR ASSESSEE BY: SHRI P M MEHTA, AR DATE OF HEARING: 27.09.2011 DATE OF PRONOUNCEMENT: 30.09.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL AND THE CROSS OBJECTION I S FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST THE ORDER OF LD . CIT(A) XVI, AHMEDABAD DATED 20.04.2009 FOR THE ASSESSMENT YEAR 2006-07. 2. FIRST, WE TAKE UP THE APPEAL FILED BY THE REVENU E. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1) THE LD. CIT(A) HAS ERRED IN FACTS AND ON LAW IN DELETING THE ADDITION MADE ON ACCOUNT OF VIOLATION OF SEBI REGUL ATION AND PROVISIONS CONTAINED IN SECTION 10(23FB) BY THE ASS ESSEE. I.T.A.NO. 2278 /AHD/2009 C.O. NO.167/AHD/2009 2 2) THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ADDITION MADE BY THE A.O. 3) THE LD. CIT(A) HAS NOT ANALYZED AND APPRECIATED THE FACT IN PROPER PERSPECTIVE WHILE CONCLUDING THAT ASSESSEE H AS NOT VIOLATED SEBI GUIDELINES IN MAKING INVESTMENTS. 3. THE LD. D.R. OF THE REVENUE SUPPORTED THE ASSESS MENT ORDER WHEREAS THE LD. A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A). IT HAS BEEN SUBMITTED BY HIM THAT THIS ISSUE IS SQU ARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE COMBINED TRIBUNAL ORDER IN A SSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS 2001-02 TO 2005-06 IN I.T.A.NOS.2264/AHD/2007, 245 TO 247/AHD/2009 AND 27 73/AHD/2008 DATED 27.05.2011. HE SUBMITTED A COPY OF THIS TRIB UNAL DECISION. HE HAS SUBMITTED THAT LD. CIT(A) HAD DECIDED THE ISSUE BY FOLLOWING THE ORDER OF LD. CIT(A) IN EARLIER YEARS I.E. ASSESSMENT YEAR 20 01-02 TO 2005-06 AND THIS ORDER OF LD. CIT(A) HAD BEEN CONFIRMED BY THE TRIBUNAL AS PER ABOVE CITED DECISION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. IN THE TRIBUNAL DECISION CITED BY THE LD. A.R. WHICH IS RE NDERED IN THE ASSESSEES OWN CASE FOR THE PRECEDING FIVE YEARS, THE ISSUE RE GARDING THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10(23B) HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. IN THE EARLIER YEARS, THE FINAL CONCLUSI ON OF THE TRIBUNAL ON THIS ISSUE IS AS PER PARA 36 OF THE TRIBUNAL ORDER CITED BY THE LD. A.R., WHICH IS BEING REPRODUCED BELOW: THEREFORE, THE TRUST DEED HAS CLEARLY EMPOWERED TH E ASSESSEE TO INVEST SURPLUS INTO THE FIXED DEPOSITS. WHEN WE GO THROUGH REGULATION 12(D) IT PROVIDES A TARGET OF 75% UP TO 5.4.2004 AND 66.67% THEREAFTER OF THE INVESTIBLE FUND TO BE INVE STED IN SPECIFIED UNDERTAKING AND UP TO 33.33% IN OTHER AVENUES AS PE R CLAUSE (II) OF REGULATION 12(D). IN OTHER WORDS THERE IS LIKELIHO OD OF SOME SURPLUS, IF 33.33% IS NOT INVESTED IN OTHER AVENUES . SUCH SURPLUS I.T.A.NO. 2278 /AHD/2009 C.O. NO.167/AHD/2009 3 OR SURPLUSES ARISING OUT OF WORKING CAPITAL OF 20% OF INVESTIBLE FUNDS CAN BE PARKED IN THE F.D. AS PROVIDED IN THE TRUST DEED. ACCORDINGLY, IN OUR CONSIDERED VIEW THE INVESTMENT IN F.?D. DOES NOT VIOLATE ANY OF THE PROVISIONS EITHER UNDER SEBI GUIDELINES OR OF THE TRUST-DEED. IN FACT THERE IS NO EXPRESS PROHIB ITION OF INVESTMENT IN FD AS PER REGULATION 12(D). THEREFORE, AS PER A BOVE DISCUSSION, WE HOLD THAT LD. CIT(A) WAS JUSTIFIED IN G RANTING EXEMPTION U/S 10(23FB) ON INTEREST INCOME OF RS.75.56 LACS EARNED FORM BANK DEPOSITS. ACCORDINGLY, THE ORDER OF LD. CIT(A) IS UPHELD AND APPEAL FILED BY THE REVENUE IS DISMISSED. 5. IN THE PRESENT YEAR ALSO, THE BASIS FOR REJECTIN G THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10(23B) IS THE SAME AS I N THE EARLIER YEAS AND NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY THE LD. D.R. OF THE REVENUE. IN THE PRECEDING FIVE YEARS, THE TRIBUNAL HAS DECID ED THE ISSUE IN FAVOUR OF THE ASSESSEE. SINCE, IN THE PRESENT YEAR, THE R EVENUE COULD NOT SHOW THAT THE FACTS ARE DIFFERENT, WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR AND HENCE, BY RESPECTFULLY FOLLOWI NG THE EARLIER TRIBUNAL ORDER, WE CONFIRM THE ORDER OF LD. CIT(A) IN THIS Y EAR ALSO. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 7. NOW, WE TAKE UP THE C.O. FILED BY THE ASSESSEE. IT WAS SUBMITTED BY THE LD. A.R. THAT THE C.O., IS NOT PRESSED AND A CCORDINGLY C.O. OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 8. IN THE COMBINED RESULT, APPEAL OF THE REVENUE, A S WELL AS THE C.O. OF THE ASSESSEE ARE DISMISSED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEP., 2011. SD./- SD./- (T.K. SHARMA) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 30.09.2011 SP I.T.A.NO. 2278 /AHD/2009 C.O. NO.167/AHD/2009 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 27.09 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER28.09 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.29.09 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30.09.2011 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30.09 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.09 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..