Giani Sardara Singh Gill Foundation, Moga V. DCIT, C-1, (Exemptions), Chandigarh

ITA 1564/CHANDI/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7978 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-08-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 11-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI VOHRA CIT
• Section: 11

Judgement Text

, ,A, IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER, AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 1564/CHD/2018 / ASSESSMENT YEAR: 2014-15 M/S GIANI SARDARA SINGH GILL FOUNDATION, VILLAGE-DHUDIKA, MOGA, PUNJAB THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1 (EXEMPTIONS), CHANDIGARH ./PAN NO : AAAAG 4768J /APPELLANT /RESPONDENT ./ ITA NO. 977/CHD/2019 / ASSESSMENT YEAR: 2014-15 M/S GIANI SARDARA SINGH GILL FOUNDATION, VILLAGE-DHUDIKA, MOGA, PUNJAB THE COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA ./PAN NO : AAAAG 4768J /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADV. / REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL-CIT ! '# /DATE OF HEARING : 05.08.2021 $%&'# /DATE OF PRONOUNCEMENT : 27 .08.2021 (HEARING THROUGH WEBEX) /ORDER PER BENCH: BOTH APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- 4, LUDHIANA ITA NOS. 1564&977/CHD/2018&19 GIANI SARDARA SINGH GILL FOUNDATION V. DY. CIT/CIT, CHANDIGARH & LUDHIANA 2 [IN SHORT REFERRED TO AS CIT(A)] DATED 28.09.2018 & 27-03-2019 U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. COMING TO THE ASSESSEE QUANTUM APPEAL IN ITA NO.1564/CHD/18, IT TRANSPIRES THAT THE SOLE STANDIN G GRIEVANCE IS AGAINST THE ACTION OF BOTH THE LOWER AUTHORITIES IN INVOKING SECTION 13(1)(C) AND MAKING INTEREST ADDITION OF RS. 53,62 ,801/- BY THE AO CALCULATED @12% ON THE INTEREST FREE ADVANCES MAD E BY THE ASSESSEE TRUST TO ITS CHAIRMAN, WHICH IN TURN WAS E NHANCED TO RS. 11,16,25,135/- BY THE LD.CIT(A) SUBJECTING THE ENTI RE INCOME OF THE TRUST TO TAX, FOR THE PURPOSES OF SECTION 11 EXEMPT ION. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS INDEED ADVANCED THE LOAN AMOUNT TO ITS CHAIRMAN SHRI. LAKHBIR SINGH GIL L. AND ALSO THAT THE LD. CIT(A) HAS EXERCISED HIS ENHANCEMENT POWER U/S 151 (1)(A) OF THE ACT WHILST DENYING EXEMPTION TO THE ENTIRE INCOME. 3. THE ISSUE THAT ARISES FOR OUR ADJUDICATION IN TH E FOREGOING FACTUAL MATRIX IS AS TO WHETHER THE INTEREST ON TH E ENTIRE LOAN AMOUNT ADVANCED BY THE ASSESSEE DESERVES TO BE ADD ED OR THAT BASED ON NETTING FORMULA, I.E., CALCULATED AFTER TA KING INTO CONSIDERATION THE AMOUNT GIVEN FROM SHRI. LAKHBIR S INGH AS WELL AS. ITA NOS. 1564&977/CHD/2018&19 GIANI SARDARA SINGH GILL FOUNDATION V. DY. CIT/CIT, CHANDIGARH & LUDHIANA 3 4. WE FIND PRIMA FACIE MERITS IN ASSESSEES CONTENT ION SINCE THE AMOUNT COMING FROM THE ASSESSEES CHAIRMAN TO THE T RUST HAVE NOT BEEN CONSIDERED. MR. SINGH, THE LD.COUNSEL FOR THE ASSESSEE, HAS FURTHER SOUGHT TO PINPOINT THE FACT THAT THE ASSES SEES CHAIRMAN HAD BEEN HAVING BOTH DEBIT AND CREDIT BALANCE IN THE R UNNING ACCOUNT WITH THE ASSESSEE. 5. FACED WITH THE SITUATION, WE UPHOLD THE LD. LOWE R AUTHORITIES ACTION IN INVOKING 13(1)(C) OF THE ACT IN PRINCIPL E BUT RESTORE ONLY THE COMPUTATION ASPECT BACK TO THE ASSESSING OFFICE R WHICH SHALL BE FINALIZED AFTER FOLLOWING THE NETTING FORMULA. THE ASSESSEES INSTANT QUANTUM APPEAL RAISING THE AFORESAID SOLE AND SHOR T GRIEVANCE IS PARTLY ACCEPTED FOR THE STATISTICAL PURPOSES. 6. COMING TO THE ASSESSEES CONSEQUENTIAL PENALTY A PPEAL IN ITA NO. 977/CHD/19, WE ADOPT THE SAME COURSE OF ACTION RESTORING THE ISSUE TO LD. ASSESSING OFFICER TO LEVY THE SAME IN ACCORDANCE WITH LAW AFTER FINALIZING THE FOREGOING COMPUTATION. 7. NO OTHER ARGUMENT HAS BEEN RAISED BEFORE US. THU S THE ASSESSEES APPEAL IN ITA NO 1564/CHD/18 IS PARTLY A LLOWED FOR STATISTICAL PURPOSES AND THE APPEAL IN ITA NO.977/ CHD/19 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 1564&977/CHD/2018&19 GIANI SARDARA SINGH GILL FOUNDATION V. DY. CIT/CIT, CHANDIGARH & LUDHIANA 4 A COPY OF THIS COMMON ORDER TO BE PLACED IN RESPEC TIVE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.2021. SD/- SD/- (ANNAPURNA GUPTA) (SA TBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBEER DATED: 27 .08.2021 GP/SR.PS %( )*+* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ! , / CIT 4. ! , ( )/ THE CIT(A) 5. *-. / , #/ , 012.3 / DR, ITAT, CHANDIGARH 6. .24' / GUARD FILE %( ! / BY ORDER, / ASSISTANT REGISTRAR 1. DRAFT DICTATED 05.08.2021 SR.PS 2. DRAFT FIRST PLACED BEFORE AUTHOR 06.08.2021 3. APPROVED DRAFT COMES TO SR.PS/PS 4 FINAL DRAFT PLACED BEFORE AUTHOR 5. ORDER SIGNED AND PRONOUNCED ON 6 FILE SENT TO THE BENCH CLERK SR.PS 7. DATE ON WHICH FILE GOES TO THE AR 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER