Addl. C.I.T., Range-1, Aligarh V. Jamia Urdu, Aligarh

ITA 369/AGR/2011

• Counselvise Citation: 36920314 RSA 2011
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-04-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 30-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: P K SEHGAL
• Keywords: Charitable institution

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.369/AGR/2011 ASSESSMENT YEAR: 2008-09 ADDL. COMMISSIONER OF INCOME TAX, VS. M/S. JAM IA URDU, RANGE-1, ALIGARH. MEDICAL ROAD, DODHPUR, ALIGARH. (PAN : AAATJ 5521 B). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. SHARMA, JR. D.R. RESPONDENT BY : SHRI P.K. SEHGAL, ADVOCATE DATE OF HEARING : 30.04.2012 DATE OF PRONOUNCEMENT : 30.04.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 08.07.2011 PASSED BY THE LD. CIT(A), GHAZIABAD FOR THE ASSESSM ENT YEAR 2008-09 ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT (APPEALS) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF ` 29,69,015/- ON ACCOUNT OF DENIAL OF ACCUMULATION CLAIMED U/S 11(2) OF THE I.T. ACT, 1961 TREATING TH E GENERAL PURPOSES AS SPECIFIC ONES. ITA NO.369/AGR/2011 A.Y. 2008-09 2 2. THE LD. CIT (APPEALS) HAS ERRED IN LAW AND ON FA CTS BY NOT APPRECIATING THE FACTS THAT ACCUMULATING THE INCOME IS NOT COVERED ACCORDING TO THE SECTION 11(2) OF THE I.T. ACT, 196 1. 3. APPELLANT CRAVES LEAVE TO AMEND, ALTER, ADD OR M ODIFY ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF CASE. 2. THE LD. REPRESENTATIVES OF THE PARTIES SUBMITTED THAT IDENTICAL ISSUE HAS BEEN DECIDED IN ASSESSEES OWN CASE IN ITA NO.122/AGR/20 11 DATED 27.04.2012 FILED BY THE REVENUE FOR THE A.Y. 2007-08. THE RELEVANT FIN DING IS REPRODUCED AS UNDER :- 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES. THE ASSESSEE SOCIETY CLAIMED ACCUMULATION OF INCOME BY FILING FORM NO.10B FOR SOME SPECIFIED PURPOSE WHICH HAS BEEN RE PRODUCED BY THE ASSESSING OFFICER IN HIS ORDER AT PAGE NO.3 WHICH R EADS AS UNDER :- A) TOWARDS CONSTRUCTION, REPAIRS, RENOVATION, EXTEN SION OF THE PROPERTY OWNED BY IT. IN FACT THE ASSESSEE EDU CATIONAL INSTITUTION WILL INCUR ABOUT ` 30 LACS TOWARDS EXTENSIVE REPAIRS AND RENOVATION OF THE EXCISING BUILDING. FURTHER I T WILL INCUR ABOUT ` 35 LACS TOWARDS CONSTRUCTION OF 10 ROOMS IN ACCORDA NCE WITH NEW PLAN. IT WILL CONSTRUCT A NEW BUILDING FO R MBA, B.ED AND BCA CLASSES IN WHICH IT WILL INCUR ABOUT ` 1.2 CRORES. B) TOWARDS PURCHASE OF EQUIPMENTS, MACHINERY, PLANT S ETC. AND/OR OTHER RESOURCES FOR THE USE AND PURPOSE OF TRUST/INSTITUTION. THE ASSESSEE EDUCATIONAL INSTIT UTION HAS ALREADY INCURRED ABOUT ` 6.25 LACS TOWARDS PURCHASE OF COMPUTERS, ABOUT ` 3.40 LACS ONWARDS PURCHASE FOR FURNITURE, ABOUT ` 11.40 LACS TOWARDS PURCHASE OF CARS, ABOUT ` 1.15 LACS TOWARDS PURCHASE OF ELECTRICAL GADGETS, A.C., TELEP HONE/MOBILE SETS. IT WILL FURTHER INCUR ABOUT ` 3 LACS TOWARDS PURCHASE OF NOISELESS GENERATOR, ABOUT ` 5 LACS TOWARDS PURCHASE OF ITA NO.369/AGR/2011 A.Y. 2008-09 3 COMPUTER AND LAPTOPS, PRINTER ETC. ABOUT ` 1 LAC TOWARDS EPBX OF 100 LINES SYSTEMS, ABOUT ` 1 LAC TOWARDS MOTORIZED AUTOMATIC GRASS CUTTING MACHINE ETC. C) TO MEET EXPENSES LAID DOWN/INCURRED FOR THE ATTA INMENT OF THE OBJECTIVES OF THE TRUST/INSTITUTION. VIZ/NA MELY ASSESSEE EDUCATIONAL INSTITUTION WILL DEVELOP SOFTWARES AND WEBSITE IN WHICH ABOUT 2 LACS WILL BE INCURRED. 4. SECTION 11(1) PROVIDES SUBJECT TO THE PROVISIONS OF SECTION 60 TO 63, THE INCOME WHICH IS DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, W HERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCU MULATED OR SET APART IS NO IN EXCESS OF 15% OF THE INCOME FROM SUCH PROP ERTY, SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR O F THE PERSON IN RESPECT OF THE INCOME. SUB-SECTION (A) WITHIN (2) OF SECTION 11 PROVIDES THAT FOR THE PURPOSE OF ACCUMULATION OF SU CH PERSON IS SPECIFIED BY NOTICE IN WRITING GIVEN TO THE ASSESSI NG OFFICER IN THE PRESCRIBED MANNER, THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH T HE INCOME IS TO BE ACCOUNTED OR SET APART WHICH SHALL IN NO CASE EXCEE D 10 YEARS. ON PERUSAL OF THE ABOVE RELEVANT PROVISIONS OF THE AC, WE FIND THAT FOR THE PURPOSE OF ACCUMULATION OF INCOME THE ASSESSEE IS R EQUIRED TO SPECIFY BY NOTICE IN WRITING TO THE ASSESSING OFFICER, THE PURPOSE FOR WHICH THE INCOME BEING ACCUMULATED. IN THE CASE UNDER CONSID ERATION, AS NOTED ABOVE, THAT THE ASSESSEE HAS SPECIFIED HE PURPOSE F OR WHICH THE INCOME HAS BEEN ACCUMULATED. THE ASSESSEE HAS FILE D THE RELEVANT PRESCRIBED FORM NO.10B WHICH IS NOT IN DISPUTE. TH E SOLE OBJECTION OF THE ASSESSING OFFICER IS THAT THE ASSESSEE DID N OT SPECIFY THE PURPOSE OF ACCUMULATION IN FORM NO.10B. HE RELIED U PON A JUDGEMENT OF CALCUTTA HIGH COURT IN THE CASE OF DIR ECTOR OF INCOME- TAX (EXEMPTION) VS. TRUSTEES OF SINGHANIA CHARITABL E TRUST, 199 ITR 819 (CAL) AND THE JUDGEMENT OF MADRAS HIGH COURT IN THE CASE OF CIT VS. M.CT. MUTHIAH FAMILY TRUST, 245 ITR 400 (MADRAS ). THE ASSESSING OFFICER HAS WRONGLY APPLIED THE JUDGMENT OF CALCUTTA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPT ION) VS. TRUSTEES OF SINGHANIA CHARITABLE TRUST AS THE FACTS OF THE C ASE UNDER ITA NO.369/AGR/2011 A.Y. 2008-09 4 CONSIDERATION AND THE FACTS OF THAT CASE ARE DISTIN GUISHABLE. IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPTION) VS. TRUS TEES OF SINGHANIA CHARITABLE TRUST, THE ASSESSEE TRUST FOR THE PURPOS E OF ACCUMULATION OF INCOME LISTED ALL THE CHARITABLE OBJECTS FOR WHICH THE ASSESSEE TRUST WAS CREATED. UNDER THAT CIRCUMSTANCES THE COURT HE LD THAT THE SPECIFIC PURPOSE AS REQUIRED BY SECTION 11(2) ADMIT S OF NO AMOUNT OF VAGUENESS ABOUT SUCH PURPOSE. IN THE CASE UNDER CO NSIDERATION, IT HAS BEEN NOTICED THAT THE ASSESSEE HAS ACCUMULATED INCOME FOR THE SPECIFIC PURPOSE AND FOR WHICH THE FUNDS HAVE BEEN USED ACCORDINGLY IN SUBSEQUENT YEARS. AS THE FACTS NOTED BY THE CIT (A) IN HIS ORDER THAT THE ASSESSEE HAS APPLIED THE ACCUMULATION OF FUNDS AS SPECIFIED WHICH WERE IN ACCORDANCE WITH THE OBJECT OF THE TRUST. T HE FACTS OF THE CASE OF MADRAS HIGH COURT IS IDENTICAL TO THE FACTS OF T HE CASE OF CALCUTTA HIGH COURT. THEREFORE, THAT JUDGMENT IS ALSO DISTI NGUISHABLE ON FACTS. IN THE LIGHT OF THE ABOVE DISCUSSION, WE UPHOLD THE ORDER OF CIT(A) WHEREIN HE HAS RIGHTLY ALLOWED ACCUMULATION OF ` 29,33,907/- UNDER SECTION 11(2) OF THE ACT AS PURPOSE FOR ACCUMULATIO N SPECIFIED IN FORM NO.10B IS IN ACCORDANCE WITH LAW. IN THE LIGH T OF THE FACTS, THE ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE. 3. SINCE THE FACTS ARE IDENTICAL, FOLLOWING THE ORD ER OF I.T.A.T. IN ASSESSEES OWN CASE IN ITA NO.122/AGR/2011 FILED BY THE REVENU E FOR THE A.Y. 2007-08, THE PRESENT APPEAL FILED BY THE REVENUE FOR THE A.Y. 20 08-09 IS DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. (ORDER PRONOUNCED IN THE OPEN COURT ON 30.04.2012) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 30 TH APRIL, 2012 ITA NO.369/AGR/2011 A.Y. 2008-09 5 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY