ITO, Jaipur V. M/S EMINENT INTERNATIONAL SCHOOL, Jaipur

ITA 1089/JPR/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87540 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 12-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEPH
• Assessee Lawyers: JAVED KHAN D
• Section: 234B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 1089/JP/2011 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 THE I.T.O.. WARD 7(2), JAIPUR. CUKE VS. M/S EMINENT INTERNATIONAL SCHOOL, SIKSHA SAMITI, 52/157, PRATAP NAGAR, SANGANER, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAATE 2475 R VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : MRS. NEENA JEPH (JCIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MANISH AGARWAL & SHRI JAVED KHAN (ADVOCATE) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 19/11/2014 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 13/02/2015 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 12/09/2011 BY THE LEARNED CIT(A)-III, JAIPUR FOR A. Y. 2008-09. RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A), HAS ERRED IN:- ITA 1089/JP/2011_ ITO VS. M/S EMINENT INTERNATIONAL SCHOOL 2 I) THE CIT(A) HAS PASSED A PERVERSE ORDER BY IGNORIN G THE FACT THAT THE FEES RECEIVED WAS NOT CORRECTLY SHOWN, AS SEEN FROM THE DETAILS FILED VIZ A VIZ THE DETAILS A S PER AUDIT ACCOUNT. II) THE CIT(A) HAS PASSED A PERVERSE ORDER DUE TO EXE MPTION THAT THE RECEIPT HAD NOT EXCEEDED RS. 1 CRORE AND T HERE WAS NO RECEIPT FROM HOSTEL AS IS IN EARLIER YEAR. III) THE CIT(A) HAS PASSED A PERVERSE ORDER IN ACCEP TING THE PLEA THAT THE ENTIRE HOSTEL FACILITIES HAD BEEN CON VERTED IN CLASS ROOM DUE TO THE INCREASE ADMISSION, WITHOUT TH ERE BEING ANY EVIDENCE BROUGHT ON RECORD BY THE ASSESSE E. IV) THUS, THE CIT(A) HAS ERRED IN ALLOWING THE DEDUCTI ON UNDER SECTION 10(23C)(IIIAD) AND DELETED THE ADDITION MAD E A.O. ON ACCOUNT OF SUPPRESSED RECEIVED IN RESPECT OF HOT EL RECEIPTS. V) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, WITHDRAW OR INSERT ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. VARIOUS GROUNDS ARE AGITATED, WHICH IN EFFECT RAI SE A CONCISE ISSUE THAT THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION U/S 10(23C)(IIIAD) AND DELETED THE ADDITION MADE BY THE ASSESSING OFFI CER BY HOLDING THAT THE ASSESSEES RECEIPTS WERE LESS THAN 1 CRORE. IT I S ASSUMED BY LD. AO THAT ASSESSEE SHOULD HAVE EARNED HOSTEL FEES AS IN PRECEDING YEAR. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A EDUCATIONAL INSTITUTION. THE GROSS RECEIPTS FOR THE IMPUGNED YE AR ARE AS UNDER:- ITA 1089/JP/2011_ ITO VS. M/S EMINENT INTERNATIONAL SCHOOL 3 PARTICULARS AMOUNT (RS.) FEES 9130237 CONVEYANCE 797500 S.B. A/C INTEREST 2610 FDR INTEREST 33875 TOTAL 9964222 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER FOUND THAT IN EARLIER YEAR A HOSTEL WAS OPERATED AND IN THIS YEAR THERE WERE NO CORRESPONDING RECEIPTS. QUESTION WAS ASKED AS TO WHY THE HOSTEL FEES AND EXPENSES RELATED THERETO WERE NOT RE FLECTED IN THE ACCOUNTS. THE ASSESSEE REPLIED AS UNDER:- IN CONTINUATION OF OUR EARLIER SUBMISSION MADE REG ARDING FALL IN HOSTEL RECEIPTS IT IS FURTHER SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THE ACADEMIC SESSION WAS STARTED FROM 1 ST JULY, 2007 AND SINCE THE TOTAL NUMBER OF STUDENTS HAVE IN CREASED THUS THE ROOMS WHICH WERE USED TO PROVE HOSTEL FACILITY TO THE STUDENTS IN PRECEDING ACADEMIC YEAR WERE CONVERTED I NTO CLASSROOMS. WE ARE ENCLOSING HEREWITH THE COPIES OF LETTER ISSUED BY THE UNIVERSITY WHEREIN THE STUDENTS SELECTED FROM B.ED AND STC COURSES WERE REQUIRED TO REPORT AT THE INSTITUTE BY 16.07.2007. FURTHER AFTER CONVERSION, THE ASSESSEE SOCIETY HAS PROCURED FURNITURE FOR THE CLASSROOMS, FOR WHICH THE NECESSARY DETAILS HAVE ALREADY BEEN SUBMITTED BEFORE YOUR GOO DSELF. FURTHER AS SUBMITTED EARLIER THE ASSESSEE SOCIETY MAINTAIN ITS BOOKS OF ACCOUNTS ON RECEIPT BASIS CONSISTENTLY SIN CE ITS ITA 1089/JP/2011_ ITO VS. M/S EMINENT INTERNATIONAL SCHOOL 4 INCEPTION, THE HOSTEL FEE RECEIVED WAS ACCOUNTED FOR WHEN THE SAME WAS ACTUALLY RECEIVED. AS THE ENTIRE HOSTEL FEE FOR WHOLE ACADEMIC YEAR 2006-07 WAS RECEIVED IN ADVANCE, THE S AME WAS DULY ACCOUNTED FOR IN F.Y. 2006-07 RELEVANT TO A.Y. 2007-08 SINCE THE MANAGEMENT HAS DECIDED TO CLOSE THE HOSTE L IN ACADEMIC YEAR 2007-08 THUS NO HOSTEL FEE WAS RECEIVE D IN F.Y. 2007-08 AND NO FEE WHATSOEVER WAS RECEIVED TOWARDS THE HOSTEL FACILITY PROVIDED, IF ANY, TO THE STUDENTS FOR THE PERIOD PRIOR TO 01/07/2007 FALLING UNDER THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2007-08. THE ASSESSING OFFICER, HOWEVER REJECTED ASSESSEES RE PLY AND NOTIONALLY ADOPTED THE FIGURE OF HOSTEL FEE OF PRECEDING YEAR AS TO BE EARNED BY THE ASSESSEE IN THIS YEAR ALSO. THIS RESULTED IN INC REASED RECEIPTS I.E. ABOVE 1 CRORE, IT WAS HELD THAT THE ASSESSEES CASE IS NOT COVERED UNDER SECTION 10(23C)(IIIAD) AS THE NECESSARY APPROVAL WAS NOT OBTAINED BY FOLLOWING OBSERVATIONS: EVEN IF THE CONSERVATIVE VIEW IS BEING ADOPTED IN T HE CASE, THE RECEIPTS OF ACCOUNTS OF HOSTEL FEES COULD NOT BE TA KEN LESS THAN THE FEES DECLARED DURING THE LAST YEAR FOR THE SUM OF RS. 29,34,000/-. THEREBY, THE TOTAL RECEIPTS OF THE ASSE SSEE EXCEED THE SUM OF RS. 1 CRORE. THEREFORE, FALLS UNDER THE A MBIT OF THE PROVISIONS OF SEC. 10(23C)(VI) INSTEAD OF THE PROVI SIONS OF SECTION 10(23C)(IIIAD) AS CLAIMED BY THE ASSESSEE. THE HOSTE L RECEIPTS ARE NOT DECLARED DURING THE YEAR, ONLY IN ORDER TO AVOI D THE TAXATION AS THE ASSESSEE HAS NOT BEEN GRANTED THE APPROVAL U/S 10(23C)(VI). ITA 1089/JP/2011_ ITO VS. M/S EMINENT INTERNATIONAL SCHOOL 5 THEREFORE, THE RELATABLE EXPENSES HAVE ALSO BEEN NOT DEBITED IN THE BOOKS OF ACCOUNTS. 4. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL B EFORE THE LEARNED CIT(A), WHO HELD THAT THERE BEING NO HOSTEL RECEIPTS , THEY CANNOT BE ASSUMED ON NOTIONAL BASIS BY THE ASSESSING OFFICER CONSEQUENTLY GROSS RECEIPTS OF THE ASSESSEE WERE BELOW ONE CRORE AND WAS HELD ALLOWABLE FOR EXEMPTION U/S 10(23C)(IIIAD) BY FOLLOWING OBSERV ATIONS:- IN VIEW OF THE ABOVE DELIBERATION, IT IS CONCLUDED THAT IN THE PRESENT CASE, THE A.O. HAS NOT ADDUCED ANY POSITIVE AND COGENT EVIDENCES TOWARDS HIS ASSUMPTION, I.E. PRESUMING THE HOSTEL RECEIPTS RS. 26,34,000/- IN THE CURRENT YEAR, WHEREA S THE APPELLANT HAS CLAIMED THAT SUCH FACILITIES WAS DISCO NTINUED IN THE CURRENT YEAR. UNDER THE GIVEN FACTS AND CIRCUMSTANC ES, IT IS HELD THAT THE A.OS ASSUMPTION, I.R.O, HOSTEL RECEIPTS O F THE APPELLANT IN THE CURRENT YEAR, IS DEVOID OF ANY FACTUAL AND L EGAL MERITS, THEREFORE, THE SAME IS HEREBY REVERSED. ACCORDINGLY , THE APPELLANTS GROSS RECEIPTS IS TO BE CONSIDERED AS R S. 99,64,222/- ONLY, WHICH IS FOUND SUPPORTED WITH THE AUDITED BOOKS OF ACCOUNTS MAINTAINED IN THIS REGARD. IN VIEW OF THE S AME, THE A.O. IS HEREBY DIRECTED TO ALLOW THE BENEFIT OF SEC. 10(23C)(IIIAD) OF THE ACT TO THE APPELLANT, AS THEY ARE OTHERWISE F OUND FULFILLING OTHER CONDITIONS BY THE A.O.. CONSEQUENTLY, THIS GR OUND OF APPEAL IS UPHELD. 4. THE 3 RD AND 4 TH GROUNDS OF APPEAL ARE ABOUT COMMENCEMENT OF PENALTY U/S 271(1)(C), LEVY OF INTE REST U/S ITA 1089/JP/2011_ ITO VS. M/S EMINENT INTERNATIONAL SCHOOL 6 234B OF THE ACT. THIS BEING CONSEQUENTIAL IN NATURE, THEREFORE, THE SAME IS TREATED AS DEALT WITH AND DECIDED, IN TH E LIGHT OF THE OUTCOME OF THE EARLIER GROUNDS OF APPEAL. 5. AGGRIEVED, REVENUE IS IN APPEAL BEFORE. THE LEA RNED SR. D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER. 6. THE LEARNED COUNSELS FOR THE ASSESSEE TOOK US TH ROUGH THE P&L ACCOUNT OF THE ASSESSEE AND CONTENDED THAT IN THIS YEAR, THE ASSESSEE INSTITUTION DID NOT RUN THE HOSTEL FACILITY DUE TO INCREASE IN NUMBER OF STUDENTS. THE ROOMS EARLIER USED AS HOSTEL WERE USED IN THIS YEAR AS CLASSROOMS AND NO HOSTEL FACILITY WAS PROVIDED BY TH E INSTITUTION. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIATE THIS DEMONSTRATIVE EXPLANATION. IT WAS ASSUMED THAT LIKE PRECEDING YEAR THERE WERE HOSTEL RECEIPTS WHICH WERE NOTIONALLY ADOPTED FOR IMPUGNED Y EAR WITHOUT ANY BASIS OR REASON. WHEN NO HOSTEL IS OPERATED BY THE ASSESSEE OR FOUND BY AO, THERE CAN BE NO PRESUMPTION ON HYPOTHECATION . THEREFORE, THE ORDER OF THE LEARNED CIT(A) IS PERFECTLY JUSTIFIED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. WE FI ND MERIT IN THE CONTENTIONS OF LEARNED COUNSELS FOR THE ASSESSEE. TH E LEARNED ASSESSING OFFICER HAS FAILED TO BRING ANY MATERIAL ON RECORD OR PROVE THAT THE HOSTEL FACILITY WAS RUN BY THE ASSESSEE IN THE IMPUG NED YEAR OR ANY ITA 1089/JP/2011_ ITO VS. M/S EMINENT INTERNATIONAL SCHOOL 7 SUCH AMOUNT WAS RECEIVED AND NOT ACCOUNTED. THE ASSES SEES BOOKS OF ACCOUNT HAD NOT BEEN REJECTED AND THE RECEIPTS OF A NY HOSTEL FEE DOES NOT EMERGE THERE FROM. IN THE ABSENCE OF ANY COGENT MATERIAL OR REASONING SUCH ASSUMPTION IS NOT TENABLE. IN VIEW TH EREOF, WE SEE NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A), WHICH IS UPHELD. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/02/2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 13 TH FEBRUARY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 7(2), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT-M/S EMINENT INTERNATIONAL SCHOOL, JAI PUR. 3. VK;DJ VK;QDRVIHY @ THE CIT(A)-III,JAIPUR. 4. VK;DJ VK;QDR @ CIT, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1089/JP/2011) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR