M/s Shaheed Kartar Singh Sarabha Charitable Trust (Regd.), Ludhiana V. DCIT, (E), C-1, Chandigarh

ITA 174/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3461 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 13-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GEETINDER MAAN
• Keywords: Charitable institution; Question of law
• Section: 12; 271(1)(c); 11; 143(3); 260A; 80G; 12A; 13

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES B, CHANDIGARH .. , #$ %& '(, ) (* BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SATBE ER SINGH GODARA, JUDICIAL MEMBER ./ ITA NO. 174/CHD/2019 / ASSESSMENT YEAR : 2015-16 M/S SHAHEED KARTAR SINGH SARABA CHARITABLE TRUST (REDG.), VPO SARABHA, DISTT. LUDHIANA. DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE-1, CHANDIGARH. ./ PAN NO: AAATS 4168 H / APPELLANT / RESPONDENT / ASSESSEE BY: SHRI ASHWANI KUMAR, SHRI ADITYA KUMAR & SHRI BHAVESH JINDAL (CAS) ! / REVENUE BY: SMT. GEETINDER MAAN (ADDL.CIT) ' #$ / DATE OF HEARING : 02/11/2020 %&'($ / DATE OF PRONOUNCEMENT: 10/11/2020 / ORDER PER: SATBEER SINGH GODARA, J.M. : THIS ASSESSEES APPEAL FOR A.Y. 2015-16 ARISES AGAI NST THE COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA (I N SHORT, THE CIT(A)) ORDER DATED 19/12/2018 PASSED IN APPEAL NO. 132/ROT/IT/CIT(A)-4/LDH/2017-18 INVOLVING PROCEEDIN G U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE A CT). 2. THE ASSESSEE HAS RAISED FOLLOWING SUBSTANTIVE GR OUNDS IN THE INSTANT CASE: 1. THAT ORDER DATED 19/12/2018 PASSED U/S 250(6) OF THE INCOME TAX ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 2 ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE INASM UCH AS SHE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LEARNED A SSESSING OFFICER AND IN ENHANCING THE INCOME OF THE APPELLANT BY DEN YING BENEFIT U/S 11 OF THE ACT BY RS. 11,98,68,227/-. 2. THAT ORDER DATED 19/12/2018 PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE INASM UCH AS SHE WAS NOT JUSTIFIED TO TREAT THE AMOUNT PAID TO PERSONS C OVERED U/S 13(3) AS EXCESSIVE BY TREATING THE RATE OF INTEREST OF UN SECURED LOAN (LIABILITIES) WITH RATE OF INTEREST OF DEPOSITS (AS SETS). 3. THAT THE LD. CIT(A) WAS NOT JUSTIFIED AND WITHOU T JURISDICTION TO ENHANCE THE INCOME OF THE APPLICANT. 4. THAT ORDER DATED 19/12/2018 PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE INASM UCH AS SHE HAS ENHANCED THE ENTIRE INCOME AND HAS NOT RESTRICTED T HE ADDITION TO THE EXCESSIVE AMOUNT PAID TO PERSONS COVERED U/S 13 (3) OF THE ACT. 5. THAT ORDER DATED 19/12/2018 PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE INASM UCH AS SHE HAS NOT CONSIDERED THE ENTIRE SET OF SUBMISSIONS OF THE APPELLANT WHEREIN THE GROUND OF CONSISTENCY WAS PLEADED IN TH E SUBMISSIONS MADE BEFORE HER. HEARD BOTH THE PARTIES. CASE FILE RECORDS PERUSED. 3. WE ADVERT TO THE BASIC RELEVANT FACTS. THIS ASSE SSEE IS ADMITTEDLY ASSESSED AS A CHARITABLE TRUST SINCE ENJ OYING BOTH SECTION 12A AND SECTION 80G REGISTRATION(S) SINCE 2 5/02/1997 AND 14/12/2012 RESPECTIVELY. THE ASSESSING OFFICER NOTI CED DURING THE COURSE OF SCRUTINY THAT IT HAD PAID INTEREST OF RS. 1,13,41,361/- TO ONE OF ITS TRUSTEE SHRI HOSHIAR SINGH GREWAL QUA NE T BALANCE WITH ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 3 INTEREST OF RS. 12,82,64,914/- AS ON 31/3/2015. HE SOUGHT THE ASSESSEES EXPLANATION/JUSTIFICATION. 4. THE ASSESSEE PLEADED BEFORE THE ASSESSING AUTHOR ITY THAT THERE WAS NEITHER ANY APPLICATION OF INCOME NOR ITS PROPERTY USED FOR THE BENEFIT OF THE SPECIFIED PERSONS U/S 13 OF THE ACT. IT HIGHLIGHTED THE FACT THAT NO SUCH RELATED PERSON WO RKED IN THE HOSPITAL NOR ANY TRANSACTION HAD BEEN CARRIED OUT W ITH RELATED PARTIES EXCEPT THE IMPUGNED INTEREST PAID TO SHRI G REWAL DUE TO SHORTAGE OF FUNDS IN THE TRUST AND IN ORDER TO REDU CE THE TERM LOAN CARRYING HIGHER RATE OF INTEREST. ALL THIS FAI LED TO PREVAIL UPON THE ASSESSING OFFICER WHO COMPARED THE ASSESSEES I NTEREST DERIVED FROM FIXED DEPOSITS @ 7.5% TO 7.75% WITH TH E INTEREST PAID IN ISSUE @ 10%. HE WENT BY FOREGOING COMPARISO N TO DISALLOW/ADD THE ASSESSEES INTEREST PAYMENT OF RS. 1,13,41,361/- U/S 11(1) TO 13(1)(C) R.W.S 13(3) OF THE ACT. 5. THE CIT(A) HAS ENHANCED THE ASSESSING OFFICERS ACTION IN THE FOLLOWING TERMS: 7. GROUNDS OF APPEAL NO. 1 AND 2 ARE REGARDING AD DITION OF INTEREST PAID TOTALING RS.1,13,41,361.00 MADE BY TH E ASSESSING OFFICER. 7.1 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND SUBMISSIONS OF THE ASSESSEE. AS PER BALANCE SHEET O F THE TRUST AS ON 31.03.2015, THE TRUST HAS TAKEN UNSECUR ED LOAN FROM S. HOSHIAR SINGH GREWAL RS.12,59,76,038/- . AS ON THAT ASSESSEE HAS CASH IN HAND OF RS.6,18,144/- BANK ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 4 BALANCE OF 1,63,31,717/- AND FIXED DEPOSITS OF RS.3,05,52,533/-. THE ASSESSEE HAS TAKEN UNSECURED LOAN FROM ONE OF ITS TRUSTEES, S.HOSHIAR SINGH GREW AL @ 10%, WHEREAS HUGE SURPLUS OF CASH IS REFLECTED IN T HE FORM OF CASH AND BANK BALANCE OF THE ASSESSEE TRUST . ACCORDINGLY, A SHOW CAUSE NOTICE FOR ENHANCEMENT OF INCOME WAS ISSUED TO THE ASSESSEE. THE LD. COUNSEL HAS EXPLAINED THAT THE ASSESSEE TRU ST HAS TAKEN TERM LOAN FROM STATE BANK OF PATIALA @ 14.75% FOR INFRASTRUCTURE DEVELOPMENT. TO REDUCE TH E HIGHER INTEREST COSTS, IT WAS DECIDED TO SEEK HELP OF SH. HOSHIAR SINGH GREWAL WHO IS ONE OF THE PRESENT TRUS TEES. HE WAS PROVIDED FUNDS WITHOUT COLLATERAL SECURITY. SH. HOSHIAR SINGH GREWAL HAS INTRODUCED FUNDS MORE THAN RS.10 CRORES OVER THE TIME PERIOD WITH WHICH THE ASSESSEE TRUST HAS PAID BACK THE BANK LOAN. IT WAS STATED THAT INTEREST BEING PAID TO SH. HOSHIAR SING H GREWAL WAS REASONABLE. FURTHER, LD. COUNSEL HAS EXPLAINED THAT CASH AND BA NK FUNDS WERE REQUIRED FOR DAY TO DAY RUNNING OF THE T RUST. AS REGARDS, FDRS KEPT WITH BANK, IT WAS EXPLAINED T HAT FDRS HAVE TO BE MAINTAINED WITH THE BANK TO MEET TH E REQUIREMENTS OF THE UNIVERSITY WITH WHICH THE INSTI TUTION OF THE ASSESSEE TRUST ARE AFFILIATED. HOWEVER, THE ASSESSEE TRUST IS MAINTAINING FOLLOWIN G FDRS WITH STATE BANK OF INDIA, I) RS.10 LACS @ 7 5% SINCE 29.05.2014 II) RS.90 LACS @ 7.5% SINCE 29.05.2014 III) RS.8,96,062 @ 7.75% SINCE 10.02.2015 ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 5 THUS, ASSESSEE HAS MADE PAYMENT OF INTEREST TO THE TRUSTEE ON UNSECURED LOAN @ 10% WHEREAS, THE SURPLU S FUNDS OF THE TRUST IN THE FORM OF FDRS ARE EARNING INTEREST FROM THE BANK @ 7.5% TO 7.75% ONLY. THUS, PROVISIONS OF SEC 13(1)(C) READ WITH 13(2)(C) AND 13(2)(G) ARE ATTRACTED IN THE CASE. 7.2 RELIANCE IS PLACE ON THE JUDGMENT OF HON'BLE H IGH COURT DELHI IN THE CASE OF PT. KANAHYA LAL PUNJ CHARITABL E TRUST VS. DIT, ITA NO. 1651 OF 2006, DATED 14.05.20 07, AS UNDER: 2. THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOC IETIES REGISTRATION ACT AS WELL AS UNDER SECTION 12A OF THE ACT. THE AS SESSEE IS HAVING INCOME MAINLY FROM THE INTEREST ON FIXED DEPOSITS A ND DONATIONS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICE D BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS ADVANCED HUGE AMOUNTS TO M/S. PUNJ LLOYD LIMITED AND AS SUCH HE RAISED A QUERY AS TO WHY SEC TION 13(1)(C) READ WITH SECTION 13(2)(A) OF THE ACT BE NOT INVOKED AS NO ADEQUATE INTEREST HAS BEEN CHARGED ON SUCH AMOUNT, THOUGH THAT COMPAN Y WAS SUBSTANTIALLY INTERESTED IN THE TRUST. FROM THE BAN K STATEMENTS, THE ASSESSING OFFICER FOUND THAT AS ON MARCH 31, 1997, A SUM OF RS. 75 LAKHS WAS OUTSTANDING WITH M/S. PUNJ LLOYD LTD. IN RESPON SE TO A QUERY, IT WAS STATED THAT THE ASSESSEE PAID THIS AMOUNT TO M/S. P UNJ LLOYD LTD. AS EARNEST MONEY FOR PURCHASE OF LAND FOR A SCHOOL PRO JECT TO BE SET UP AT PONTA SAHIB (NEAR DEHRADUN), AND THAT INTEREST CHAR GED BY THE BANK FROM THE TRUST WAS FULLY REIMBURSED BY M/S. PUNJ LLOYD L TD. TO THE TRUST AND HENCE THERE WAS NO LOSS TO THE TRUST. IT WAS ALSO N OTICED BY THE ASSESSING OFFICER THAT THE TRUST HAS NOT TAKEN ADEQUATE SECUR ITY TO WHICH THE ASSESSEE STATED THAT THE SECURITY WAS PROVIDED IN T HE FORM OF EQUITABLE MORTGAGE OF COMMERCIAL SPACE OWNED BY M/S. PUNJ LLO YD LTD. THE ASSESSING OFFICER FOUND THAT THE STORY OF PAYMENTS BEING MADE FOR PURCHASE OF LAND FOR A SCHOOL WAS NOTHING BUT AN AF TERTHOUGHT, SPECIALLY AS THERE WERE NO AGREEMENTS WITH THE VENDORS OF LAN D OR CORRESPONDING BANK TRANSACTIONS AND NO PROOF OF THE SAME WAS FURN ISHED. SINCE M/S. PUNJ LLOYD LTD. MADE CONTRIBUTION IN EXCESS OF RS. 50,000 TO THE TRUST, AND WAS AN INTERESTED PARTY, THE ASSESSING OFFICER DENIED EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMIS SIONER OF INCOME- TAX (APPEALS), WHO CONFIRMED THE DENIAL OF THE EXEM PTION AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4. THEREAFTER, THE ASSESSEE CHALLENGED THE ORDER OF T HE COMMISSIONER OF INCOME-TAX (APPEALS) BEFORE THE TRIBUNAL AND VIDE T HE IMPUGNED ORDER, THE TRIBUNAL DISMISSED THE APPEAL FILED BY THE ASSE SSEE AND THAT IS HOW THE ASSESSEE IS BEFORE THIS COURT. ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 6 5. IT HAS BEEN CONTENDED ON BEHALF OF THE ASSESSEE TH AT UNDER SECTION 11 OF THE ACT, INCOME OF A TRUST HELD WHOLLY FOR CHARITAB LE OR RELIGIOUS PURPOSE IS EXEMPT. THE ASSESSEE DID NOT LEND ANY AMOUNT TO M/S. PUNJ LLOYD LTD. DURING THE COURSE OF COMMERCIAL TRANSACTIONS AND IT HAD DEPOSITED THE MONEY WITH M/S. PUNJ LLOYD LTD. AS EARNEST MONEY FO R PURCHASE OF LAND FOR A SCHOOL AND WHEN THE DEAL DID NOT MATERIALISE, M/S. PUNJ LLOYD LTD. RETURNED THE MONEY AND AS SUCH THE ASSESSEE HAS BEE N WRONGLY DENIED THE EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT. 6. THE BASIC REQUIREMENT FOR THE AVAILABILITY FOR EXE MPTION UNDER SECTIONS 11 AND 12 OF THE ACT IS THAT IF ANY MONEY IS LENT T O AN INTERESTED PARTY AS DEFINED IN SECTION 13(3) OF THE ACT FOR 'ANY PERIOD ' DURING THE PREVIOUS YEAR, THEN THE TRUST SHOULD CHARGE 'ADEQUATE INTERE ST' AND THERE SHOULD BE AN 'ADEQUATE SECURITY'. 7. IF THE CONTENTION OF THE ASSESSEE IS ACCEPTED THAT THE PAYMENTS WERE IN THE NATURE OF EARNEST MONEY FOR PURCHASE OF LAND, A ND THE WHOLE EXERCISE WAS OF A COMMERCIAL NATURE, IT CANNOT BE EXPLAINED WHY INTEREST-FREE ADVANCES SHOULD BE GIVEN. THE ACT REQUIRES VERY STR ICTLY THAT THE TRUST SHOULD USE THEIR FUNDS ONLY FOR THE CHARITABLE OBJE CTS FOR WHICH THEY HAVE BEEN SET UP AND THEY CANNOT BE PERMITTED TO LOAN OR DEPOSIT FUNDS AVAILABLE WITH THEM WITHOUT INTEREST AS IN THE PRES ENT CASE. FURTHER, IN THE PRESENT CASE, NOT ONLY INTEREST WAS NOT CHARGED, EV EN ADEQUATE SECURITY WAS ALSO NOT TAKEN. 8. SECTION 13(1)(C ) OF THE ACT SPEAKS OF 'ANY INCOME ' WHICH HAS BEEN USED TO BENEFIT 'DIRECTLY OR INDIRECTLY' ANY PERSON REFERRED TO IN SECTION 13(3). THE PLAIN READING OF THIS SECTION WOULD SHOW THAT THE ACT IS INTENDED TO ELIMINATE ANY POSSIBILITY OF THE TRUST' S FUND BEING USED FOR THE BENEFIT OF ANY INTERESTED PERSON. IN THE PRESENT CA SE, IT CANNOT BE DENIED THAT A BENEFIT HAS 'DIRECTLY OR INDIRECTLY' REACHED THE INTERESTED PERSON, NAMELY M/S. PUNJ LLOYD LTD. AND THUS, THERE IS A CL EAR VIOLATION OF SECTIONS 13(1)(C) AND 13(2)(A) OF THE ACT. 9. THE TRIBUNAL IN ITS ORDER HAS NOTED THAT ONCE THER E IS A VIOLATION OF PROVISION OF SECTION 13(3) READ WITH SECTION 13(1)( C), THE PROVISIONS OF SECTIONS 11 AND 12 OF THE ACT SHALL NOT OPERATE SO AS TO EXCLUDE THE INCOME OF THE TRUST FROM THE TOTAL INCOME OF THE PR EVIOUS YEAR. ACCORDING TO SECTIONS 11 AND 12 OF THE ACT, THE VOLUNTARY CON TRIBUTION MADE WITH SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTION, SHALL NOT BE INCLUDED IN THE TOTAL INC OME OF THE PREVIOUS YEAR OF THE TRUST. BUT ONCE THE EXEMPTION UNDER SECTIONS 11 AND 12 IS DENIED, THE ASSESSEE WOULD NOT GET ANY PROTECTION FROM SECT IONS 11 AND 12 AND THE VOLUNTARY CONTRIBUTION WOULD BE TREATED AS INCOME, AS PER THE DEFINITION OF INCOME GIVEN IN SECTION 2(24) OF THE ACT, ACCORD ING TO WHICH INCOME INCLUDES THE VOLUNTARY CONTRIBUTION RECEIPTS BY A T RUST CREDITED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY A N INSTITUTION ESTABLISHED WHOLLY OR PARTLY FOR SUCH PURPOSES MEANING THEREBY ONCE THE EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT IS WITHDRAWN AL L THE RECEIPTS OF THE TRUST EITHER BY VOLUNTARY CONTRIBUTION OR INCOME DE RIVED FROM ITS PROPERTY WOULD BE AN INCOME OF THE TRUST IN A NORMAL COURSE AND IS CHARGEABLE TO TAX. ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 7 10. THERE ARE CONCURRENT FINDINGS OF THE FACT BY THREE INCOME-TAX AUTHORITIES AND WE DO NOT FIND ANY REASON TO DISAGR EE WITH THE CONCLUSION ARRIVED AT BY THESE AUTHORITIES. 11. UNDER THESE CIRCUMSTANCES, WE HOLD THAT NO FAULT C AN BE FOUND WITH THE VIEW TAKEN BY THE TRIBUNAL. THUS, THE ORDER OF THE TRIBUNAL DOES NOT GIVE RISE TO A QUESTION OF LAW, MUCH LESS A SUBSTAN TIAL QUESTION OF LAW, TO FALL WITHIN THE LIMITED PURVIEW OF SECTION 260A OF THE ACT, WHICH IS CONFINED TO ENTERTAINING ONLY SUCH APPEAL AGAINST T HE ORDER WHICH INVOLVES A SUBSTANTIAL QUESTION OF LAW. 12. ACCORDINGLY, THE APPEAL IS HEREBY DISMISSED. 7.3 THE ASSESSEE TRUST HAS PAID EXCESSIVE INTEREST TO THE TRUSTEE OF THE TRUST WHO IS COVERED U/S 13(3) OF TH E INCOME TAX ACT. IN THE PRESENT CASE, IT CANNOT BE D ENIED THAT DIRECT BENEFIT HAS BEEN ALLOWED TO THE TRUSTEE OF THE TRUST SHRI. HOSHIAR SINGH GREWAL BY GIVING INTE REST ON THE FUNDS ADVANCED BY HIM @ L0% AS AGAINST INTER EST RECEIVED FROM FDRS AMOUNTING TO 1,08,96,062/- KEPT IN THE BANK ACCOUNT OF THE ASSESSEE @ 7.5% THUS, THERE IS A CLEAR VIOLATION OF SECTION 13(1)(C) READ WITH 13( 2)(C) AND 13(2)(G) OF THE INCOME TAX ACT, 1961.THEREFORE, BENEFIT U/S 11 OF THE INCOME TAX ACT, 1961 IS DISAL LOWED TO THE ASSESSEE. AS PER THE DETAILS PROVIDED BY THE ASSESSEE, TOTAL INCOME OF THE TRUST DURING THE YEAR WAS RS.11,98,68,227/-. THE ENTIRE RECEIPT OF INCOME OF THE TRUST WILL BE ASSESSED AS INCOME AS THE EXPENDITURE IS NOT INCURRED BY THE TRUST FOR EARNING OF INCOME BUT IT IS A SUBSEQUENT APPLICATION OF INCOME OUT OF RECEIPTS OF TRUST. THE INCOME OF THE ASSESSEE IS ACCORDINGLY ENHANCED TO RS. 11,98,68,227/- AND ASSESSED AS AOP AND BENEFIT OF CLAIM U/S 11 OF THE INCOME TAX ACT, 1961 IS DENIED. FROM THE ABOVE FACTS, I AM SATISFIED THA T THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 8 INCOME TAX ACT, 1961 FOR FURNISHING INACCURATE PARTICULARS OF THE INCOME ARE ALSO INITIATED. THIS LEAVES THE ASSESSEE AGGRIEVED. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL PLEADINGS AGAINST AND IN SUPPORT OF IMPUGNED ENHANC EMENT. SUFFICE TO SAY, IT IS AN ADMITTED FACT THAT THE ASS ESSEE HAS DERIVED INTEREST ON ITS FIXED DEPOSITS MAINTAINED WITH BANK (S) @ 7.5% TO 7.75% AND IN TURN PAID INTEREST TO ITS TRUSTEE SHRI GREWAL IN QUESTION @ 10% AND @ 14.75% TO STATE BANK OF PATIAL A IN THEIR RELEVANT PREVIOUS YEAR (SUPRA). ALL THIS SAME SUFFI CIENCY INDICATES THAT THE ASSESSING OFFICER HAD ERRED DURING THE COU RSE OF ASSESSMENT IN COMPARING THE ASSESSEES FIXED DEPOSI TS INTEREST DERIVED FROM BANKS AGAINST THAT PAID FORMING SUBJEC T MATTER ON THE INSTANT LIS. 6. THE REVENUE AT THIS STAGE SOUGHT TO DRAW SUPPORT FROM CIT(A)S ACTION ADDING THE TRUSTS TOTAL INCOME TO THE EXTENT OF RS. 11,98,68,227/- ON THE GROUND THAT THERE WAS NO JUST IFICATION TO AVAIL THE INTEREST BEARING FUNDS AT SUCH AN UNREASO NABLE RATE WITHOUT ANY REQUIREMENT SINCE IT HAD ITSELF BEEN MA INTAINING FDRS WITH THE BANKS. WE FIND NO REASON TO SUSTAIN EITHER OF THE TWIN LIMBS OF EXCESSIVE AS WELL AS UNJUSTIFIED INTEREST ON ASPECTS IN FAVOUR OF THE REVENUE. PAPER BOOKS PAGES 28 TO 29 S UGGEST THAT THE ASSESSEE HAD 17 FIXED DEPOSIT ACCOUNTS WITH THE BANK(S) OUT OF WHICH THE FIRST ONE WAS IN THE NATURE OF MARGIN MONEY SECURITY ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 9 IN FAVOUR OF THE DENTAL COUNCIL OF INDIA WHEREAS AC COUNTS 2 TO 14 THEREOF ARE FUND SECURITY(IES) OF NURSING COLLEGE(S ) IN FAVOUR OF THE BABA FARID UNIVERSITY OF HEALTH SCIENCES. MEANI NG THEREBY THAT THE SAID FIXED DEPOSIT ACCOUNTS ARE DEPOSITS A RE IN THE NAME(S) OF AFFILIATING/REGULATORY BODIES THAN FIXED DEPOSIT INVESTMENT PER SE. WE OBSERVE THAT THESE FACTS THAT IT WAS VERY MUCH JUSTIFIABLE ON ASSESSEES PART TO MAINTAIN ALL THE SAID FIXED DEPOSITS FOR THE PURPOSE OF CARRYING OUT THE TRUST S MEDICAL EDUCATION ACTIVITIES. 7. WE NEXT ADVERT TO ALLEGED EXCESSIVE INTEREST PAY MENTS @ 10% TO ITS TRUSTEE SHRI GREWAL. IT HAS COME ON RECO RD THAT THE DEPARTMENT HAS ITSELF ACCEPTED INTEREST PAID TO THE LENDER BANKS @ 14.75% IN CASE OF SECURED LOANS ARE AGAINST UNSEC URED LOANS AVAILED FROM SHRI GREWAL. THAT ITSELF SUGGESTS THAT THE IMPUGNED INTEREST RATE @ 10% IS NOT EXCESSIVE SO AS TO ATTRA CT THE IMPUGNED DISALLOWANCE/ADDITION. 7. THE REVENUES LAST CONTENTION SEEKS TO BUTTRESS THE CIT(A)S FINDING RELYING ON HONBLE DELHI HIGH COURT DECISIO N (SUPRA) DECIDING THE ISSUE IN DEPARTMENTS FAVOUR. WE FIND THAT THE SAID JUDICIAL PRECEDENT HAS BEEN UNNECESSARILY ROPED IN BY THE CIT(A) IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE SI NCE THE TAX PAYER THEREIN HAD EXTENDED INTEREST FREE CREDIT FAC ILITY TO THE SPECIFIED PERSON (S) WHEREAS WE ARE DEALING WITH TH IS ASSESSEE PAYING MARKET RATE OF INTEREST TO THE TRUSTEE. WE G O BY ALL THIS ITA 174/CHD/2019_M/S SHAHEED KARTAR SINGH SARABHA CHARITABLE TRUST VS DCIT(E) 10 ELABORATE REASONING TO CONCLUDE THAT THE ASSESSING AUTHORITY HAD ERRED IN DISALLOWING ASSESSEES INTEREST PAYMENT OF RS. 1,13,41,361/- FOLLOWED BY THE CIT(A)S ENHANCEMENT ACTION UNDER CHALLENGE WHICH IS ALSO NOT SUSTAINABLE. THE SAME S TAND REVERSED THEREFORE. 8. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH NOVEMBER, 2020. SD/- SD/- .. , #$ %'& '( (N.K. SAINI) (SATBEER SINGH GODARA) )(* / JUDICIAL MEMBER )& / DATED: 10/11/2020 *RANJAN &* +,-, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' . / CIT 4. ' . ( )/ THE CIT(A) 5. ,/0 1 , $ 1 , 23405 / DR, ITAT, CHANDIGARH 6. 046# / GUARD FILE &* ' / BY ORDER, / ASSISTANT REGISTRAR