DDIT, CHENNAI V. Nachipur Educational Trust, CHENNAI

ITA 2064/CHNY/2014

• Counselvise Citation: 206421714 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Assessee Lawyers: S DEEPA
• Keywords: Charitable institution
• Section: 12AA; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.2063, 2064, 2065, 2066 & 2067/MDS/2014 ' (' / ASSESSMENT YEARS : 2004-05 TO 2008-09 THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI - 600 034. V. M/S NACHIPUR EDUCATIONAL TRUST, NO.16, RAJAMMAL STREET, SHENOY NAGAR, CHENNAI - 600 030. PAN : AABTN 3631 R (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.2173/MDS/2012 ' (' / ASSESSMENT YEAR : 2004-05 THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI - 600 034. V. M/S ANUGRAHA, NO.16, RAJAMMAL STREET, SHENOY NAGAR, CHENNAI - 600 030. PAN : AACTA 4591 N (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NOS.2068, 2069, 2070 & 2071/MDS/2014 ' (' / ASSESSMENT YEARS : 2005-06 TO 2008-09 THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI - 600 034. V. M/S ANUGRAHA, RUTLAND TOWERS, 2 ND FLOOR, NO.33, SHAFEE MOHAMED ROAD, GREAMS ROAD, CHENNAI - 600 006. PAN : AACTA 4591 N (*+/ APPELLANT) (,-*+/ RESPONDENT) 2 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 *+ . / / APPELLANT BY : SHRI S. BHARATH, CIT ,-*+ . / / RESPONDENTS BY : MS. S. DEEPA, CA 0 . 1$ / DATE OF HEARING : 18.08.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 01.10.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS OF THE REVENUE ARE DIRECTED AGAI NST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), OUT OF WHICH TWO ARE COMMON ORDERS, VIZ. ONE FOR ASSESSMENT YEAR S 2004-05 TO 2008-09 AND THE OTHER FOR ASSESSMENT YEARS 2005-06 TO 2008-09 AND THERE IS A SEPARATE ORDER FOR ASSESSMENT YEAR 2 004-05. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THESE TEN APPEALS, WE HEARD THE APPEALS TOGETHER AND DISPOSING OF THE SAM E BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 23 DAYS IN FILING THESE APP EALS BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR COND ONATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE AND THE LD. REPRESENTATIVE FOR THE ASSESSEE. WE FIND T HAT THERE WAS 3 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 SUFFICIENT CAUSE FOR NOT FILING THE APPEALS BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEA LS. 3. SHRI S. BHARATH, THE LD. DEPARTMENTAL REPRESENTA TIVE, SUBMITTED THAT BOTH THE ASSESSEES ARE REGISTERED AS CHARITABLE INSTITUTIONS UNDER SECTION 12AA OF THE INCOME-TAX A CT, 1961 (IN SHORT 'THE ACT'). DURING THE ASSESSMENT YEARS UNDE R CONSIDERATION, BOTH THE ASSESSEES CLAIMED TO HAVE RECEIVED CORPUS DONATION. HOWEVER, THE CORPUS DONATION CLAIMED TO HAVE BEEN R ECEIVED BY BOTH THE ASSESSEES FOUND TO HAVE BEEN ADDED TO THE CAPITAL FUND. THE LD. D.R. FURTHER SUBMITTED THAT THE ASSETS CREA TED OUT OF THE ACCUMULATED CAPITAL FUND WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT OF BOTH THE ASSESSEES. THE LD. D.R. FURTHE R SUBMITTED THAT THE ASSESSEES HAVE NOT FURNISHED THE COMPLETE DETAI LS OF THE DONORS FROM WHOM THE CORPUS DONATION WAS CLAIMED TO HAVE B EEN RECEIVED. THEREFORE, THE ASSESSING OFFICER TREATED THE ENTIRE SO-CALLED CORPUS DONATION SAID TO BE RECEIVED BY THE ASSESSEES AS IN COME OF THE ASSESSEES. ACCORDING TO THE LD. D.R., THE ASSESSEE S HAVE ALSO NOT FILED ANY EVIDENCE FOR APPLICATION OF THEIR FUND FO R CHARITABLE PURPOSE. REFERRING TO THE ASSESSMENT ORDERS, THE L D. D.R. SUBMITTED THAT BOTH THE ASSESSEES TRANSFERRED THEIR FUNDS TO TWO 4 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 PRIVATE COMPANIES, NAMELY, M/S PRAJIT FOUNDATION PV T. LTD. AND M/S GOLDEN SHELTERS PVT. LTD. ACCORDING TO THE LD. D.R ., BOTH THE ASSESSEES POOLED THEIR FUNDS FOR CONSTRUCTION OF MA SSIVE MARBLE STRUCTURE AT CHEDULAPAKKAM VILLAGE, VARADALAPALAM M ANDAL, CHITTOOR DISTRICT, ANDHRA PRADESH. THE MASSIVE MAR BLE STRUCTURE WAS SAID TO BE MEANT FOR MEDITATION HALL FOR GENERA L PUBLIC. HOWEVER, THE STRUCTURE CONSTRUCTED BY TWO PRIVATE C OMPANIES CONTINUE AS ASSET IN THEIR BOOKS OF ACCOUNT. MOREO VER, TWO OF THE DIRECTORS OF THE ABOVE SAID TWO COMPANIES ARE CLOSE RELATIVES OF THE TRUSTEE OF BOTH THE TRUSTEES. THEREFORE, THE ASSES SING OFFICER FOUND THAT THERE WAS A CLEAR VIOLATION OF SECTION 13(1)(D ) OF THE ACT. REFERRING TO SECTION 11 OF THE ACT, THE LD. D.R. PO INTED OUT THAT WHAT WAS EXCLUDED AS INCOME IS CORPUS FUND RECEIVED BY T HE ASSESSEES WITH A SPECIFIC DIRECTION. IN THIS CASE, ACCORDING TO THE LD. D.R., THE DETAILS OF THE DONORS WERE NOT DISCLOSED TO THE DEP ARTMENT. THEREFORE, IT CANNOT BE CONSTRUED AS CORPUS DONATIO N AT ALL. DIVERSION OF FUND TO THE PRIVATE LIMITED COMPANIES FOR CONSTRUCTION OF A MEDITATION HALL BY TWO PRIVATE COMPANIES WOULD AM OUNT TO DIVERSION OF FUND OTHER THAN THE OBJECT OF THE TRUS TS. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY REJECTED THE CLAIM OF THE ASSESSEES FOR EXEMPTION UNDER SECTION 11 OF THE ACT. 5 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 4. REFERRING TO THE ASSESSMENT ORDERS, THE LD. D.R. POINTED OUT THAT THE ASSESSEES CLAIMED THE DIVERSION OF FUND TO TWO PRIVATE COMPANIES AS INFRASTRUCTURAL DEVELOPMENT EXPENSES. HOWEVER, THE ASSET CREATED DID NOT FORM PART OF THE ASSET OF THE TRUSTS. ACCORDING TO THE LD. D.R., THE MONEY TRANSFERRED TO TWO COMPA NIES FOR CONSTRUCTION OF A MEDITATION HALL CANNOT BE CONSTRU ED AS INFRASTRUCTURAL DEVELOPMENT EXPENSES. THE FUNDS WE RE GIVEN TO THE COMPANIES FOR THE BENEFIT OF SAID COMPANIES. REFER RING TO THE LEASE AGREEMENT, THE LD. D.R. POINTED OUT THAT THE LEASE AGREEMENT TO TRANSFER THE ASSETS IS AN AFTERTHOUGHT. THE ASSET WAS, IN FACT, CONSTRUCTED ON THE LAND BELONGING TO ANIRJITA PROPE RTIES. THE ASSESSEES ARE NOT THE OWNERS OF THE LAND. THEREFOR E, THE CIT(APPEALS) IS NOT JUSTIFIED IN SAYING THAT THERE WAS NO VIOLATION OF SECTION 13(1)(C) OF THE ACT. THE LD. D.R. FURTHER POINTED OUT THAT SHRI N.V.K. KRISHNA AND HIS WIFE SMT. K. PREETHI AR E HOLDING THE ENTIRE SHARES OF THE COMPANY, NAMELY, M/S GOLDEN SH ELTERS PVT. LTD. AND SHRI VIJAYKUMAR, FATHER OF SHRI N.K.V. KRI SHNA, IS A FOUNDER TRUSTEE OF THE ASSESSEES. SIMILARLY, THE SAID SHRI N.K.V. KRISHNA AND HIS WIFE SMT. K. PREETHI ARE THE MAJOR SHAREHOL DERS OF M/S PRAJIT FOUNDATION PVT. LTD. 6 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 5. THE LD. D.R. FURTHER POINTED OUT THAT M/S ANIRJI TA PROPERTIES WAS THE OWNER OF THE LAND ON WHICH THE MEDITATION H ALL WAS CONSTRUCTED. THERE WAS AN AGREEMENT BETWEEN ANIRJI TA PROPERTIES AND M/S GOLDEN SHELTERS PVT. LTD. HOWEVER, THE COM PANY CLAIMED IN THE LATER STAGE THAT THERE WAS A LEASE AGREEMENT FOR A PERIOD OF 30 YEARS. THE LD. D.R. FURTHER POINTED OUT THAT BO TH THE ASSESSEE- TRUSTS OWN VAST STRETCH OF LAND AT KUNNAWALKAM VILL AGE IN ANDHRA PRADESH. THEREFORE, IT IS NOT KNOWN WHY THE MASSIV E CONSTRUCTION WAS PUT UP IN A LAND BELONGING TO OTHER PERSON. AC CORDING TO THE LD. D.R., SINCE THE CONSTRUCTION WAS MADE IN THE LA ND BELONGING TO ANIRJITA PROPERTIES, AND BUILDING STANDS IN THE NAM E OF TWO COMPANIES, WHICH ARE OWNED BY CLOSE RELATIVES OF SH RI VIJAYKUMAR, ONE OF THE TRUSTEES, THE ASSESSING OFFICER RIGHTLY FOUND THAT THERE WAS A VIOLATION OF SECTION 13(1)(C) AND 13(1)(D) OF THE ACT. THEREFORE, THE ASSESSEES ARE NOT ENTITLED FOR EXEMP TION UNDER SECTIONS 11 AND 12 OF THE ACT. ACCORDING TO THE LD . D.R., THE CIT(APPEALS) MISCONSTRUED HIMSELF AND ALLOWED THE C LAIM OF THE ASSESSEES UNDER SECTION 11 OF THE ACT. 6. ON THE CONTRARY, MS. S. DEEPA, THE LD. REPRESENT ATIVE FOR THE ASSESSEE, SUBMITTED THAT ADMITTEDLY, BOTH THE TRUST S ARE REGISTERED AS CHARITABLE TRUSTS UNDER SECTION 12AA OF THE ACT. IN FURTHERANCE OF 7 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 THE OBJECT OF THE TRUSTS, THE ASSESSEES INTENDED TO CONSTRUCT A MEDITATION HALL FOR THE USE OF THE PUBLIC AT LARGE. SINCE THE ASSESSEES HAVE NO TECHNICAL EXPERTISE TO ERECT A BI G MEDITATION HALL, THE WORK WAS ENTRUSTED TO M/S PRAJIT FOUNDATION PVT . LTD. AND M/S GOLDEN SHELTERS PVT. LTD. THE ASSESSEES HAVE ALSO RECEIVED CORPUS DONATION WITH A SPECIFIC DIRECTION TO USE TH E FUNDS FOR CONSTRUCTION OF MEDITATION HALL. THE TWO COMPANIES CARRIED OUT THE CONSTRUCTION OF MEDITATION HALL ON THE FUNDS ADVANC ED BY THE ASSESSEE-TRUSTS. AFTER COMPLETING THE CONSTRUCTION , THE ENTIRE MEDITATION HALL WAS HANDED OVER TO THE ASSESSEES. REFERRING TO THE ORDER OF THE CIT(APPEALS) FOR THE ASSESSMENT YEAR 2 004-05, THE LD. REPRESENTATIVE SUBMITTED THAT THE CIT(APPEALS) AFTE R REFERRING TO THE OBJECT OF THE TRUSTS, FOUND THAT THE ASSESSEES ARE CONDUCTING CLASSES FOR TEACHING IDEOLOGY OF BUDDHA AND J. KRIS HNAMURTHY. THE MEDITATION HALL CONSTRUCTED BY THE ASSESSEES IS OPE N TO GENERAL PUBLIC, NOT ONLY FOR MEDITATION BUT ALSO FOR CONDUC TING LECTURES, EDUCATIONAL ACTIVITIES, TRAINING PURPOSE, ETC. 7. REFERRING TO THE CONTENTION OF THE LD. D.R. THAT THE FUNDS WERE TRANSFERRED TO THE COMPANIES IN WHICH CLOSE RE LATIVES OF THE TRUSTEE ARE DIRECTORS, THE LD. REPRESENTATIVE SUBMI TTED THAT ONE SHRI 8 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 V. VIJAYKUMAR WAS THE TRUSTEE TILL 08.06.1991. THE SAID SHRI V. VIJAYKUMAR RELINQUISHED THE TRUSTEESHIP WITH EFFECT FROM 08.06.1991. THEREFORE, SHRI V. VIJAYKUMAR IS NO LONGER A TRUSTE E IN BOTH THE TRUSTS IN THE ASSESSMENT YEARS UNDER CONSIDERATION. THEREFORE, MERELY BECAUSE THE DIRECTORS OF THE TWO COMPANIES, WHICH CONSTRUCTED THE MEDITATION HALL, ARE RELATED TO THE ABOVE SAID EX- TRUSTEE SHRI V. VIJAYKUMAR, IT CANNOT BE CONSTRUED AS VIOLATION OF SECTION 13(1)(C) AND 13(1)(D) OF THE ACT. ACCORDIN G TO THE LD. REPRESENTATIVE, IN THE ASSESSMENT YEARS UNDER CONSI DERATION, THERE IS NO VIOLATION OF ANY PROVISIONS OF SECTION 13 OF THE ACT. REFERRING TO THE ORDERS OF THE CIT(APPEALS), THE LD. REPRESEN TATIVE SUBMITTED THAT THE CIT(APPEALS), AFTER CONSIDERING THE FACT T HAT SHRI V. VIJAYKUMAR RELINQUISHED HIS TRUSTEESHIP ON AND FROM 08.06.1991, FOUND THAT THERE WAS NO VIOLATION OF SECTION 13(1)( D) OF THE ACT. HENCE, THE EXEMPTION CLAIMED BY THE ASSESSEES UNDER SECTION 11 OF THE ACT CANNOT BE DENIED. 8. NOW COMING TO CONSTRUCTION OF MEDITATION HALL, T HE LD. REPRESENTATIVE SUBMITTED THAT THE CONSTRUCTION WAS MADE BY THE TWO COMPANIES ON THE FUNDS ADVANCED BY THE TWO ASSESSEE -TRUSTS. AFTER COMPLETION OF CONSTRUCTION, THE COMPANIES ADM ITTEDLY HANDED 9 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 OVER THE BUILDING TO THE TRUSTS. THE PROPERTY TAX ASSESSMENT STANDS IN THE NAME OF ASSESSEE-TRUSTS. THEREFORE, ACCORDI NG TO THE LD. REPRESENTATIVE, THE PROPERTY BELONGS TO THE TRUSTS AND NOT TO THE COMPANIES. THE MOMENT THE CONSTRUCTION WAS COMPLET ED, THE PHYSICAL POSSESSION OF THE PROPERTY WAS HANDED OVER TO THE ASSESSEES. THEREFORE, AT ANY STRETCH OF IMAGINATIO N, THE REVENUE CANNOT CLAIM THAT THE PROPERTY BELONGS TO TWO COMPA NIES. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE PROPERTY TAX WAS ALSO ASSESSED IN THE HANDS OF THE TWO ASSESSEE-TRUSTS BY THE RESPECTIVE LOCAL BODIES. HENCE, THERE IS NO JUSTIFICATION IN CLAIMING THAT THE BUILDING BELONGS TO THE COMPANIES. ACCORDING TO TH E LD. REPRESENTATIVE, IN FACT, THE BUILDING BELONGS TO TH E ASSESSEE-TRUSTS, THEREFORE, THE EXPENDITURE INCURRED BY THE ASSESSEE S FOR CONSTRUCTION OF THE BUILDING HAS TO BE TREATED AS I NFRASTRUCTURAL DEVELOPMENT EXPENSES. THE LD. REPRESENTATIVE FURTH ER SUBMITTED THAT THE MEDITATION HALL WAS CONSTRUCTED IN FURTHER ANCE OF THE OBJECT OF THE TRUSTS. THEREFORE, THE EXPENDITURE HAS TO B E TREATED AS APPLICATION OF FUNDS UNDER SECTION 11 OF THE ACT. 9. REFERRING TO THE RECEIPT OF CORPUS DONATION, THE LD. REPRESENTATIVE SUBMITTED THAT IN FACT THE ASSESSEES HAVE RECEIVED 10 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 CORPUS DONATION FROM VARIOUS PEOPLE WITH SPECIFIC D IRECTION TO USE THE SAME FOR CONSTRUCTION OF MEDITATION HALL. THE DETAILS OF THE DONORS WERE FURNISHED BEFORE THE LOWER AUTHORITIES. HOWEVER, IN RESPECT OF SOME OF THE DONORS, ONLY THE VILLAGE NAM E WAS FURNISHED. ACCORDING TO THE LD. REPRESENTATIVE, THE PEOPLE WHO HAILED FROM VILLAGES COULD BE IDENTIFIED BY REFERRING TO THEIR VILLAGE. THEREFORE, IT CANNOT BE SAID THAT THE DETAILS OF THE DONORS WERE NOT FURNISHED BY THE ASSESSEES. EVEN ASSUMING FOR ARGUMENT SAKE, AC CORDING TO THE LD. REPRESENTATIVE, THAT THESE ARE ANONYMOUS DONATI ON, STILL IT HAS TO BE TREATED AS APPLICATION OF FUNDS FOR CREATION OF INFRASTRUCTURE FOR THE TRUSTS. THE ENTIRE RECEIPT WAS USED FOR CONSTR UCTION OF MEDITATION HALL AT VARADALAPALAM MANDAL. THEREFORE , ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) HAS RIGHTL Y ALLOWED THE CLAIM OF THE ASSESSEES. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, BOTH THE ASSESSEE-TRUSTS ARE REGISTERED UNDER SECTION 12AA O F THE ACT. BOTH THE ASSESSEES CLAIM EXEMPTION UNDER SECTION 11 OF T HE ACT. HOWEVER, THE ASSESSING OFFICER DENIED THE SAME ON T HE GROUND THAT THERE WAS VIOLATION OF SECTION 13(1)(D) OF THE ACT. IN OTHER WORDS, 11 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 THE TRUST FUNDS WERE DIVERTED FOR INTERESTED PERSON AS PROVIDED UNDER SECTION 13(1)(D) OF THE ACT. WE HAVE GONE TH ROUGH THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILA BLE ON RECORD. THE FUNDS OF THE TRUSTS WERE ADVANCED TO TWO COMPAN IES, NAMELY, M/S PRAJIT FOUNDATION PVT. LTD. AND M/S GOLDEN SHEL TERS PVT. LTD. FOR CONSTRUCTION OF MEDITATION HALL AT VARADALAPALAM MA NDAL, CHITOOR DISTRICT, ANDHRA PRADESH. ONE SHRI N.K.V. KRISHNA AND HIS WIFE SMT. K. PREETHI OWN THE ENTIRE SHARES IN M/S PRAJIT FOUNDATION PVT. LTD. AND M/S GOLDEN SHELTERS PVT. LTD. SHRI N.K.V. KRISHNA IS NONE OTHER THAN THE SON OF SHRI V. VIJAYKUMAR, WHO WAS T HE TRUSTEE OF BOTH THE TRUSTS. HOWEVER, THE SAID SHRI V. VIJAYKU MAR RELINQUISHED HIS STRUSTEESHIP ON AND FROM 08.06.1991. THEREFORE , FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE SAID SHRI V. VIJAYKUMAR HAS NO RELATIONSHIP WITH THE TRUSTS. THE QUESTION ARISES FOR CONSIDERATION IS WHEN SHRI V.VIJAYKUMAR IS NO LONGE R A TRUSTEE OF THE ASSESSEE-TRUSTS, CAN THE FUNDS BE ADVANCED TO T HE COMPANIES IN WHICH THE SON OF SHRI V. VIJAYKUMAR AND HIS DAUGHTE R-IN-LAW ARE HOLDING SHARES WOULD AMOUNT TO DIVERSION OF FUNDS T O INTERESTED PERSON? THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MOMENT SHRI V. VIJAYKUMAR RELINQUISHED HIS TRUSTEESHIP, I T CANNOT BE SAID THAT SHRI V. VIJAYKUMARS SON AND DAUGHTER-IN-LAW A RE INTERESTED 12 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 PERSONS IN THE TRUSTS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO VIOLATION OF SECTION 13(1) (D) OF THE ACT. 11. NOW COMING TO CORPUS DONATION, THE ASSESSEES CL AIM THAT ALL THE DETAILS WERE FURNISHED BEFORE THE LOWER AUTHORI TIES. FROM THE MATERIAL AVAILABLE ON RECORD, IT APPEARS THAT ALL T HE DETAILS WERE NOT FURNISHED. THOUGH CERTAIN DETAILS WERE FURNISHED, IT IS A FACT THAT COMPLETE DETAILS WERE NOT FURNISHED BEFORE THE LOWE R AUTHORITIES. THEREFORE, PART OF THE SO-CALLED CORPUS DONATION HA S TO BE TREATED AS INCOME OF THE ASSESSEE-TRUSTS. HOWEVER, IT IS NOT IN DISPUTE THAT THE ENTIRE CORPUS DONATION AND OTHER DONATIONS WERE USE D FOR THE CONSTRUCTION OF MEDITATION HALL AT VARADALAPALAM MA NDAL. THEREFORE, EVEN IF THE CLAIM OF THE ASSESSEES WITH REGARD TO RECEIPT OF CORPUS DONATION IS DISBELIEVED, THEN THE SO-CALL ED DONATION HAS TO BE TREATED AS INCOME OF THE ASSESSEE AND IT IS TO B E ALLOWED AS APPLICATION FOR CREATING INFRASTRUCTURE. SINCE ADM ITTEDLY THE DONATIONS WERE USED FOR CONSTRUCTION OF MEDITATION HALL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ENTIRE INCOME HAS TO BE HELD AS APPLICATION OF INCOME. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 13 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 12. NOW COMING TO CONSTRUCTION OF MEDITATION HALL B Y TWO COMPANIES, THE CONTENTION OF THE LD. D.R. APPEARS T O BE THAT THE MEDITATION HALL FORMS PART OF THE ASSET OF THE TWO COMPANIES. THEREFORE, IT CANNOT BE CREATED AS INFRASTRUCTURE O F THE ASSESSEE- TRUSTS. THE FACT THAT THE MEDITATION HALL WAS HAND ED OVER TO THE ASSESSEE-TRUSTS IS NOT IN DISPUTE. THE PROPERTY TA X ASSESSMENT BY LOCAL BODY ALSO STANDS IN THE NAME OF TWO ASSESSEE- TRUSTS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT WHEN THE TWO COMPANIES CONSTRUCTED THE MEDITATION HALL AND H ANDED OVER THE SAME TO THE ASSESSEE-TRUSTS AND THE PROPERTY TAX AS SESSMENT STANDS IN THE NAME OF ASSESSEE-TRUSTS, THE ASSESSEE S ARE THE OWNERS OF THE PROPERTY UNDER THE PROVISIONS OF INCO ME-TAX ACT. UNDER THE INDIAN LAW, A LAND CAN BELONG TO ONE PERS ON AND THE BUILDING CAN BE OWNED BY OTHER PERSON. IN THE CASE BEFORE US, THE LAND IN WHICH THE MEDITATION HALL WAS CONSTRUCTED B ELONGS TO A DIFFERENT PERSON, BUT THE BUILDING WAS CONSTRUCTED BY THE TWO COMPANIES ON THE FUNDS ADVANCED BY THE ASSESSEE-TRU STS. AFTER CONSTRUCTION, THE BUILDING WAS HANDED OVER TO THE A SSESSEE-TRUSTS. THEREFORE, THERE WAS TRANSFER OF PROPERTY WITHIN TH E MEANING OF SECTION 2(47) OF THE ACT. UNDER THE COMMON LAW, RE GISTRATION OF DOCUMENT IS REQUIRED WHEN THE PROPERTY VALUE EXCEED S MORE THAN 14 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 ` 100/-. HOWEVER, UNDER SECTION 2(47) OF THE ACT, RE GISTRATION OF THE DOCUMENT IS NOT MANDATORY. WHEN THE PHYSICAL POSS ESSION OF THE BUILDING IS HANDED OVER TO THE ASSESSEE-TRUSTS AND ALLOWED THE ASSESSEE-TRUSTS TO ENJOY THE SAME, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE-TRUSTS BECAME THE OWNERS OF THE MEDITATION HALL. THEREFORE, FOR ALL PRACTICAL PURP OSE, THE ASSESSEE- TRUSTS BECOME THE OWNER OF THE MEDITATION HALL CONS TRUCTED BY THE TWO COMPANIES ON THE FUNDS ADVANCED BY THE ASSESSEE -TRUSTS. THE TREATMENT OF THE ASSESSEE IN THE ACCOUNTS OF THE CO MPANIES OR TRUSTS CANNOT OVERRIDE THE PROVISIONS OF INCOME-TAX ACT. IN OTHER WORDS, THE PROVISIONS OF INCOME-TAX ACT WOULD PREVA IL OVER THE TREATMENT OF THE ASSESSEE IN THE ACCOUNTS. THEREFO RE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO VIOLA TION OF ANY OF THE PROVISIONS OF SECTIONS 11, 12 & 13 OF THE ACT. THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT SINCE THE ASSESSEE-TRUSTS A PPLIED THEIR FUNDS FOR ESTABLISHING AN INFRASTRUCTURE IN FURTHER ANCE OF THEIR OBJECT, NAMELY, CONSTRUCTION OF MEDITATION HALL, AND THE ME DITATION HALL IN FACT WAS COMPLETED AND THE POSSESSION WAS HANDED OV ER TO THE ASSESSEE-TRUSTS, THE CIT(APPEALS) HAS RIGHTLY ALLOW ED THE CLAIM OF THE ASSESSEES UNDER SECTION 11 OF THE ACT. THIS T RIBUNAL DO NOT 15 I.T.A. NOS.2063 TO 2067/MDS/14 I.T.A. NO.2173/MDS/12 I.T.A. NOS.2068 TO 2071/MDS/14 FIND ANY INFIRMITY IN THE ORDERS OF THE CIT(APPEALS ), ACCORDINGLY, THE SAME ARE CONFIRMED. 13. IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE STAND DISMISSED. ORDER PRONOUNCED ON 1 ST OCTOBER, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 1 ST OCTOBER, 2015. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-VII, CHENNAI-34 4. 0 81 () /CIT(A)-XII, CHENNAI-34 5. 0 81 /DIT (EXEMPTIONS), CHENNAI 6. 69 ,1 /DR 7. :' ; /GF.