The ACIT, (Exemption), Circle-1, Ahmedabad V. Adharshila Education & Charitable Trust, Gandhinagar

ITA 3272/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8135 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: B T THAKKAR
• Keywords: Charitable institution; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS . MADHUMITA ROY, JUDICIAL MEMBER THE ACIT (EXEMPTIONS), CIRCLE - 1, AHMEDABAD - 380009 (APPELLANT) VS ADHARSHILA EDUCATION & CHARITABLE TRUST PAN: AABTA2713R (RESPONDENT) REVENUE BY : S H RI V.K. SINGH , SR. D . R. ASSESSEE BY: S H RI B.T. THAKKAR , A.R. DATE OF HEARING : 16 - 05 - 2 018 DAT E OF PRONOUNCEMENT : 11 - 06 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S AP PEAL FOR A.Y. 2012 - 13 , ARIS ES FROM ORDER OF THE CIT(A) , GANDHINAGAR, AHM EDABAD DATED 12 - 09 - 2016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEE'S APPEAL NEGATING THE FINDINGS OF THE ASSESSING OFFICER DENYING THE BENEFITS OF SECTION 11(1)(A) & 12 OF THE IT. ACT. II) WHETHER ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN GIVING THE BENEFIT OF SECTION 11 & 12 WHICH THE A.O. DISALLOWED BY INVOKING THE PROVISION OF SECTION 13(1)(C)(II) OF THE ACT. III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER O F INCOME - TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IV) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. I T A NO . 3272 / A HD/20 16 A SSESSMENT YEAR 2012 - 13 I.T.A NO. 3272 /AHD/20 16 A.Y. 2012 - 13 PAGE NO ACIT VS. ADHARSHILA EDUCATION & CHARITABLE TRUST 2 3. IN THIS CASE, RETURN OF INCOME DECLARING TOTAL LOSS OF RS. 1 , 54 , 10 , 238/ - WAS FILED ON 24 TH SEP, 2012. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) ON 7 T H AUGUST, 2013. THE ASSESSEE IS A PUBLIC CHARITABLE TRUST ENGAGED IN EDUCATIO NAL ACTIVITIES . ON SCRUTINY THE ASSESSING OFFICER OBSERVED THAT THE TRUST HAS BEEN PAYING RENT TO ADHARSHILA ASSOCIATES A PERSON SPECIFIED U/S. 13(3) IN VIOLATION OF THE PROVISIONS OF SECTION 13(1) (C) OF THE ACT . THE ASSESSEE EXPLAINED THAT RENT OF THE LEASE PREMISES WAS DETERMINED AFTER TAKING IN TO CONSIDERATION THE VALUATION REPORT O F GOVERNMENT REGISTERED VALU E R. IT WAS ALSO SUBMITTED THAT THE RATE OF INTEREST ON UNSECURED LOAN AT 15% PER ANNUM WAS MOST REASONABLE RATE OF INTEREST AS PER PRE VAILING MARKET RATE . THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE . HE OBSERVED THAT FROM THE TOTALITY OF THE SITUATION THE PROVISION S OF SECTION 13(1)(C)(II) OF THE ACT R.W.S 13(2)(G) AND SECTION 13(3)(E) OF THE ACT WERE AP PLICABLE TO THE CASE OF THE ASSESSEE. CONSEQUENTLY, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE OF THE ABOVE EXPENSES. THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 30/03/2015 DETERMINING TOTAL INCOME AT RS.( - ) 70,50,914 AFTE R DISALLOWING OF EXEMPTION CLAIMED BY ASSESSEE TRUST U/S 11 & 12 OF THE ACT. 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF LD. CIT(A) IS REPRODUCE D AS UNDER: - 6. I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER, SUBMISSION MADE BY THE APPELLANT AND ORDER OF ITAT IN THE CASE OF THE APPELLANT. I FIND THAT THE HON'BLE ITAT, AHMEDABAD BENCH IN THE CASE OF THE APPELLANT FOR EARLIER YEARS HAD H ELD THAT THE APPELLANT HAS NOT MADE VIOLATION OF SECTION 13(1)(C) OF THE ACT IN GIVING SECURITY DEPOSITS TOWARDS RENT FOR THE SCHOOL PREMISES AND HAD ALSO DIRECTED TO GRANT THE APPELLANT, EXEMPTION U/S 11 & 12 OF THE ACT. ON PERUSAL OF THE MATERIALS FILED, IT IS SEEN THAT THE UNDERSIGNED HAS ALSO ALLOWED THE CLAIM OF THE APPELLANT FOR AYS 2010 - 11, 2011 - 12 & 2013 - 14 AFTER EXAMINATION OF THE FACTS AND ALSO RELYING ON THE DIRECTIONS GIVEN BY THE HON'BLE ITAT, AHMEDABAD BENCH IN EARLIER YEARS IN THE CASE OF APP ELLANT ITSELF. AFTER TAKING INTO CONSIDERATION ALL THE FACTS AND MATERIALS AND ALSO FOLLOWING THE JUDGMENT OF THE HON'BLE ITAT IN THE CASE OF APPELLANT ITSELF FOR EARLIER YEARS, I DO NOT FIND ANY REASON TO TAKE A DIFFERENT VIEW, THIS YEAR TOO. THEREFORE, I T IS HELD THAT THE AO IS NOT JUSTIFIED IN DENYING THE APPELLANT THE CLAIM MADE U/S. 11 BY INVOKING PROVISIONS OF SECTION I.T.A NO. 3272 /AHD/20 16 A.Y. 2012 - 13 PAGE NO ACIT VS. ADHARSHILA EDUCATION & CHARITABLE TRUST 3 13(3) OF THE ACT. THE RELEVANT GROUNDS OF APPEALS ARE THEREFORE, ALLOWED IN FAVOUR OF THE APPELLANT. 5 . DURING OF APPELLATE PROCEEDIN GS BEFORE US, THE LD. COUNSEL HAS CONTENDED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION OF THE CO - ORDINATE BENCH OF THE ITAT VIDE ITA NO. 1941/AHD2016 IN THE CASE OF THE ASSESSEE ITSELF ON THE IDENTICAL FACTS. ON THE OTHER HAND, THE LD. DEPAR TMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDER OF T HE ASSESSING OFFICER. 6 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. WE HAVE NOTICED THAT THE CO - ORDINATE BENCH OF THE ITAT VIDE ABOVE CITED DECISION HAS DECIDED THE IS SUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDING OF THE CO - ORDINATE BENCH IS REPRODUCED AS UNDER: - 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE AFORESAID ISSUE IS COVERED, IN FAVOUR OF THE ASSESSEE, BY THE ORDER DATED 27.09.2017 PASSED BY THE COORD INATE BENCH, IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2011 - 12, WHEREIN THE TRIBUNAL, AFTER FOLLOWING THE ANOTHER CO - ORDINATE BENCH S ORDER IN ITA NO.2221/AHD/2011 FOR ASSESSMENT YEAR 2005 - 06, HAS HELD AS UNDER,: - 3. WITH THE ASSISTANCE OF THE LD. D R FOR THE REVENUE AND LD. AR FOR THE ASSESSEE, WE FIND THAT THE ASSESSING OFFICER (AO) FOR THE AY 2011 - 12 DENIED EXEMPTION UNDER S. 11(1)(A) & 12 OF THE ACT ON THE GROUND THAT EVEN THOUGH THE COORDINATE BENCH OF ITAT HAS DECIDED THE ISSUE IN FAVOUR OF ASS ESSEE IN EARLIER YEARS, THE DEPARTMENT HAS PREFERRED APPEAL BEFORE THE HON'BLE HIGH COURT IN THE EARLIER YEARS, IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAS MADE VIOLATION OF SECTION 13(1)(C) OF THE ACT IN GIVING SECURITY DEPOSITS FOR RENTAL ACCOMMODAT ION OF SCHOOL PREMISES AND CONSEQUENTIALLY DENIED EXEMPTION ON INCOME UNDER S. 11/12 OF THE ACT. THE ISSUE WAS ADJUDICATED IN FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH OF ITAT IN ITA NO.2221/AHD/2011 FOR AY 2005 - 06 ORDER DATED 30/11/2010 AND SIMILAR O RDERS WERE PASSED FOR THE DIFFERENT ASSESSMENT YEARS. THE LD. DR POINTED OUT BEFORE US THAT THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ONLY TO KEEP THE ISSUE ALIVE AS EMANATED IN THE EARLIER ASSESSMENT YEARS. 4. ADMITTEDLY, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND NO SUBSTANTIVE ARGUMENT HAS BEEN RAISED BY THE REVENUE TO SUPPORT ITS APPEAL. 4. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO - ORDINATE BENCH. RESPECTFULLY FOLLOWING THE VI EWS SO TAKEN BY THE CO - ORDINATE BENCH (SUPRA) IN ASSESSEE S OWN CASE FOR AY 2011 - 12 IN ITA NO.2797/AHD/2014, WE REJECT THE GRIE VANCE OF THE ASSESSING OFFICER. I.T.A NO. 3272 /AHD/20 16 A.Y. 2012 - 13 PAGE NO ACIT VS. ADHARSHILA EDUCATION & CHARITABLE TRUST 4 IN VIEW OF THE ABOVE CITED DECISION OF THE COORDINATE BENCH ON THE IDENTICAL ISSUE IN THE CASE OF THE ASSESSEE ITSELF , WE DO NOT FIND ANY REASON TO DISINCLINE WITH THE FINDINGS OF THE LD. CIT(A), THEREFORE , RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH , THE APPEAL OF THE REVENUE IS DISMISSED. 7 . IN THE RESULT , TH E APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 11 - 06 - 201 8 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 11 /06 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,