DCIT (E)-1(1), Mumbai V. Aditya birla foundation , Mumbai

ITA 4065/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2019 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 06-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV HARIT
• Keywords: Gift; Depreciation; Rectification of order; Charitable institution; Fair market value; Valuation report; Competent authority; Set aside
• Section: 143(3); 142(1); 80G; 12A; 143(2); 139(1); 13(2); 13; 145; 144; 154; 11; 139

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 4065/MUM/2019 (ASSESSMENT YEAR 2011-12) DCIT(E)-1(1) ROOM NO. 506 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG LOWER PAREL MUMBAI-400 012. V S. ADITYA BIRLA FOUNDATION C-1, ADITYA BIRLA CENTRE S.K. AHIRE MARG, WORLI MUMBAI-400 030. PAN : AAATA0382P ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI RONAK DOSHI DEPARTMENT BY SHRI RAJEEV HARIT DATE OF HEARING 07.04.2021 DATE OF PRONOUNCEMENT 16.06.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER OF LEARNED CIT(A) DATED 1.3.2019 PERTAINING TO ASSESSMENT YEAR 2011-12. 2. GROUNDS OF APPEAL READ AS UNDER : 1. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE ASSESSEE 'S CLAIM OF EXEMPTION OF RS.3,96,94,1 79/- BEING THE INTEREST INCOME ACCRUED BUT NOT RECEIVED DURING THE PREVIOUS YEAR AS THE ASSESSEE FOLLOWED THE MIXED SYSTEM OF ACCOUNTING I.E. CASH SYSTEM FOR RECEIPTS AND MERCANTILE SYSTEM FOR EXPENSES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS A COMPANY REG ISTERED U/S 25 OF THE COMPANIES ACT, 1956 AND WAS STATUTORILY REQUIRED TO FOL LOW MERCANTILE SYSTEM'. 2. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE ASSESSEE' S CLAIM WITHOUT APPRECIATING THAT THE AUDITOR IN ITS REPORT IN ACCOUNTING POLICIES AND NOTES TO ACCOUNTS HAS SPECIFICALLY MENTIONED THAT 'THE FOUNDATIO N FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING AND RECOGNIZES INCOME AND EXPE NDITURE ON ACCRUED BASIS EXCEPT LEAVE ENCASHMENT LIABILITY WHICH IS ACC OUNTED ON PAYMENT BASIS'. 3. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION MADE BY THE AO U/S 13(3) OF THE IT. ACT ON ACCOUNT OF RECEIVING LOWER RENT FROM THE RELATED PARTY WITHOUT APPRECIATING THAT THE DVO HAS DETERMINED THE MARKET VAL UE OF THE SAID ADITYA BIRLA FOUNDATION 2 PROPERTY TO RS.2,61,17,501/- BEING VALUE OF LEASE RE NTALS OF HOSPITAL BUILDING AT THE RATE OF RS.4.45/- PER MONTH PER SQ. FT AND FOR S TAFF QUARTERS AT RS.3.94/- PER MONTHS PER SQ. FT. WHICH IS STILL HIGHE R THAN THE RATE CHARGED BY THE ASSESSEE TRUST I.E. 4.10/- PER MONTH PER SQ. F T. FOR HOSPITAL BUILDING AND RS. 3/ - PER MONTH PER SQ. FT. FOR STAFF QUARTERS. THE AS THE DVO HAS DETERMINED THE RENTAL VALUE HIGHER THAN THE RENT ACTUALL Y RECEIVED, SO THERE IS NO DOUBT ABOUT THE FACT THAT THE ASSESSEE TRUST IS NOT RECEI VING ADEQUATE RENT'. 4. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE ASSESSEE 'S CLAIM OF ACCUMULATION OF INCOME WITHOUT APPRECIATING THE FACT THAT IN THE RETU RN OF INCOME & FORM 10B, DEFICIT HAS BEEN CLAIMED LEAVING NO SCOPE OF AC CUMULATION U/S 11(2) OF THE IT. ACT WHICH IS PERMITTED FOR SPECIFIC PURPOSES'. 5. 'THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS)-3, MUMBAI BE SET ASIDE AND THAT OF THE ASSES SING OFFICER BE RESTORED'. 3. BRIEF FACTS OF THE CASE THE ASSESSEE IS REGISTER ED AS A CHARITABLE ORGANIZATION WITH DIT (EXEMPTION), MUMBAI U/S. 12A UNDER VIDE REGISTRATION NO. T R-30884 DATED 28/12/1994. THE APPELLANT HAS A CCORDINGLY CLAIMED EXEMPTION U/S. 11 OF THE ACT. THE OBJECT OF THE APP ELLANT IS TO DO CHARITABLE ACTIVITIES IN THE FIELD OF MEDICAL AS PER THE OBJEC TS IN THE TRUST DEED. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30/09/2011 D ECLARING TOTAL INCOME AT DEFICIT OF RS. 1,65,32,977/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER THE SCRUTINY SELECTION NORMS AND NOTICES U/S. 143(2) & 142(1) ALONG WITH QUESTIONNAIRE WERE ISSUED AND DULY SERVED ON THE AP PELLANT. FINALLY, THE ASSESSING OFFICER HAS PASSED ORDER U/S 143(3) ON 24 /03/2014 DETERMINING TOTAL INCOME AT RS. 12,29,88,240/-. SUBSEQUENTLY, T HE SAID ORDER WAS RECTIFIED BY ASSESSING OFFICER U/S. 154 VIDE ORDER DATED 19.0 6.2014 DETERMINING TOTAL INCOME AT RS.5,03,19,020/-. 4. UPON ASSESSEES APPEAL LEARNED CIT(A) GRANTED SU BSTANTIAL RELIEF. ON SOME OF THE RELIEF GRANTED REVENUE IS IN APPEAL BEF ORE US. APROPOS GROUND NO. 1&2 5. BRIEF FACTS ARE THAT DURING THE YEAR UNDER CONSI DERATION, THE ASSESSEE RECEIVED INTEREST INCOME AMOUNTING TO RS. 1,89,71,2 40/- WHICH WAS CLASSIFIED ADITYA BIRLA FOUNDATION 3 UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AND ACCO UNTED USING THE CASH SYSTEM OF ACCOUNTING. THIS METHOD OF ACCOUNTING WAS CLAIMED TO HAVE BEEN FOLLOWED CONSISTENTLY BY THE ASSESSEE SINCE ITS INC EPTION. THE LD. AO HELD THAT SECTION 145 OF THE ACT PRESCRIBES THE METHOD OF ACC OUNTING WHICH STATES THAT INCOME SHALL BE COMPUTED IN ACCORDANCE WITH CASH OR MERCANTILE SYSTEM OF ACCOUNTING REGULARLY FOLLOWED BY THE ASSESSEE. THE SYSTEM OF HYBRID ACCOUNTING OR MIXED ACCOUNTING HAS BEEN DONE AWAY W ITH. HE ALSO STATED THAT CONSISTENTLY ADOPTING HYBRID METHOD WOULD NOT VALID ATE AN INCORRECT METHOD. CONSISTENCY DOES NOT OVERRIDE CORRECTNESS. THE ASSE SSING OFFICER HELD THAT WHERE THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THE SAME METHOD SHOULD ALSO BE FOLLOWED FOR ACCOUNTING OF IN TEREST INCOME AS WELL. THE LD. AO, BY INVOKING PROVISIONS OF SECTION 144, RE-W ORKED THE AMOUNT OF INTEREST AND ADDED BACK THE AMOUNT OF RS. 3,96,94,1 79/- TO THE COMPUTATION OF INCOME. 6. FURTHER, THE ASSESSING OFFICER HELD THAT ASSESSE E'S PROPOSITION THAT ONLY INCOME THAT IS RECEIVED CAN BE APPLIED IS NOT CORRE CT. SECTION 11 ALSO PROVIDES FOR A SITUATION WHERE THE INCOME IS ACCRUED BUT NOT RECEIVED BY THE TRUST. EXPLANATION 2 TO SECTION 11(1) CLEARLY STATES THAT IF THE INCOME EXPENDED FALL SHORT OF 85% OF THE INCOME FOR THE REASON THAT THE INCOME HAS NOT BEEN RECEIVED DURING THE YEAR OR FOR ANY OTHER REASON TH EN AN OPTION IS GIVEN TO THE ASSESSEE TO INTIMATE THE ASSESSING OFFICER THAT THE SAME WOULD BE SPENT IN THE YEAR OF RECEIPT OR IN THE IMMEDIATELY FOLLOWING YEA R AS THE CASE MAY BE. THAT THE LEGISLATURE HAS FORESEEN A SITUATION WHERE THE INCOME WAS ACCRUED BUT COULD NOT BE SPENT AS IT WAS NOT RECEIVED. THAT THE REFORE, THE MIXED METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE IS NOT IN ACCOR DANCE WITH THE PROVISIONS OF SECTION 145 R.W.S. 11(1) OF THE ACT AND IS REJECTED . ACCORDINGLY, THE ASSESSEE'S INTEREST INCOME IS RE-WORKED BY INVOKING SECTION 14 4 IN ACCORDANCE WITH THE PROVISIONS OF SECTION 145 OF THE ACT. 7. UPON ASSESSEES APPEAL LEARNED CIT(A) DELETED TH E ADDITION BY HOLDING AS UNDER : ADITYA BIRLA FOUNDATION 4 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE DISCU SSIONS MADE BY THE AO AS ALSO THE SUBMISSIONS MADE BY THE APPELLANT. THE AP PELLANT HAS SUBMITTED THAT RIGHT FROM ITS INCEPTION, IT IS REGULARLY FOLLOWI NG CASH SYSTEM OF ACCOUNTING QUA THE INTEREST INCOME AND WHICH HAS NOT B EEN DISPUTED BY THE DEPARTMENT FOR EARLIER ASSESSMENT YEARS. HOWEVER, IT I S NOT DISPUTED BY THE AO THAT THE INTEREST INCOME IS REGULARLY OFFERED TO TA X ON CASH BASIS AND THEREFORE, IT IS A TAX NEUTRAL EXERCISE. I ALSO AGREE WITH THE SUBMISSIONS MADE BY THE APPELLANT THAT U/S. 145 OF THE ACT, INCOME FROM O THER SOURCES CAN BE COMPUTED IN ACCORDANCE WITH THE CASH OR MERCANTILE SYSTEM REGULARLY FOLLOWED BY THE APPELLANT. IT IS ALSO OBSERVED THAT ON SIMILAR ISSUE IN THE CASE OF G.D. BIRLA MEDICAL RESEARCH EDUCATION FOUNDATION, CIT (A)-3 HAS DELETED THE ADDITION MADE BY THE AO. 8. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEE TRUST IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING HENCE, IT WAS REQUI RED TO ACCOUNT FOR THE INTEREST ON ACCRUAL BASIS AND NOT RECEIPT BASIS. HE SUBMITTED THAT THE SAID SYSTEM FOLLOWED BY THE ASSESSEE IS CONTRARY TO THE PROVISIONS OF SECTION 145(1) OF THE ACT. IN THIS CONNECTION IN SUPPORT OF HIS AR GUMENT HE PLACED RELIANCE UPON THE FOLLOWING CASE LAWS :- DHONDIRAM DALICHAND VS. CIT (81 ITR 609) DAMAN METALLIC OXIDES VS. CIT (ITA NO. 7573/MUM/2011 DT. 23.5.2013) CIT VS. THOBHANDAS JIVANLAL GAJJAR (109 ITR 296) M.M. IPOH VS. CIT (67 ITR 106) CIT VS. SESHASAYEE INDUSTRIES LTD. (242 ITR 691) DASHMESH TRANSPORT CO.(P) LTD. VS. CIT (125 ITR 681 ) SHRIRAM TRANSPORT FINANCE CO. LTD. VS. ACIT (70 ITD 406) 10. PER CONTRA, LEARNED COUNSEL OF THE ASSESSEE SUB MITTED THAT THIS SYSTEM HAS BEEN FOLLOWED FOR ALMOST FIFTEEN YEARS AND THE REVENUE HAS NOT OBJECTED. LEARNED COUNSEL FURTHER SUBMITTED THAT SECTION 145( 1) OF THE ACT DOES NOT PROVIDE ANY HINDRANCE TO THE SYSTEM OF ACCOUNTING I N THIS REGARD BEING FOLLOWED BY THE ASSESSEE. IN THIS REGARD HE PLACED RELIANCE UPON THE FOLLOWING CASE LAWS :- PCIT VS. QUEST INVESTMENT ADVISORS (P) LTD. (409 ITR 545) CIT VS. NAGRI MILLS CO. LTD. (33 ITR 681) ADITYA BIRLA FOUNDATION 5 CIT VS. GANGA CHARITY TRUST FUND (162 ITR 612) DCIT VS. M/S. G.D. BIRLA MEDICAL RESEARCH & EDUCATI ON FOUNDATION (ITA NO. 4348/MUM/2018) 11. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION AND PERUSED THE RECORD. WE NOTE THAT THE ASSESSEE IS A TRUST. IT IS UNDISPU TED THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AS PER IT S AUDIT REPORT AND ACCOUNTS. HOWEVER, IT IS ALSO UNDISPUTED THAT THE ASSESSEE IS ACCOUNTING FOR INTEREST INCOME ON RECEIPT BASIS. AS A RESULT OF THIS FINDIN G, THE ASSESSING OFFICER HAS FOUND THAT RS. 3,96,94,179/-BEING INTEREST ACCRUED HAVE NOT BEEN ACCOUNTED BY THE ASSESSEE ON THE GROUND THAT IT IS ACCOUNTING FOR THE SAME ON THE BASIS OF CASH SYSTEM I.E. RECEIPT BASIS. WE NOTE THAT SEC TION 145(1) OF THE ACT PROVIDES THAT INCOME CHARGEABLE UNDER THE HEAD PRO FITS AND GAINS OF BUSINESS OR PROFESSION OR INCOME FROM OTHER SOURCES SHALL SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) BE COMPUTED IN ACCORDANCE WITH EITH ER CASH OR MERCANTILE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSE SSEE. THUS IT IS AMPLY CLEAR THAT THE METHOD OF ACCOUNTING PROVIDED IN THE ACT IS EITHER CASH OR MERCANTILE AND HENCE IT CANNOT BE MIXED OF HYBRID S YSTEM ANY MORE. THUS IT IS ALSO CLEAR THAT AS PER ASSESSEES ACCOUNTING SYSTEM DULY FOLLOWED CERTIFIED BY THE AUDITOR IS MERCANTILE SYSTEM OF ACCOUNTING. HEN CE, BY ONLY ACCOUNTING FOR INTEREST ON RECEIPT BASIS AND OTHER ASPECT OF INCOM E AND EXPENDITURE ON MERCANTILE BASIS ASSESSEE IS FOLLOWING HYBRID SYSTE M WHICH IS NOT PERMISSIBLE. NOW ASSESSEES CONTENTION IS THAT LEARNED CIT(A) HA S ACCEPTED THAT THE ASSESSEE IS FOLLOWING THIS SYSTEM FOR LONG TIME AND REVENUE HAS NOT DISPUTED THE SAME. HERE WE NOTE THAT THERE IS NO DOUBT THAT THIS SYSTEM IS NOT PERMISSIBLE IN THE PRESENT ASSESSMENT YEAR AS PER T HE SANGUINE PROVISIONS OF THE ACT AS ENSHRINED OF SECTION 145 OF THE ACT. JUS T BECAUSE WRONG SYSTEM HAS BEEN FOLLOWED FOR QUITE SOME TIME, IT HAS BEEN CLAI MED THAT THE SAME SHOULD BE ALLOWED TO CONTINUE. IN THIS REGARD WE REFER TO HON 'BLE SUPREME COURT DECISIONS THAT THERE IS NO HEROISM IN PERPETUATING AN ERROR. IT WAS HELD THAT TO PERPETUATE AN ERROR IS NO HEROISM. TO RECTIFY IT I S THE COMPULSION OF JUDICIAL CONSCIENCE. IN THIS WE DERIVE COMPORT AND STRENGTH FROM WISE AND INSPIRING ADITYA BIRLA FOUNDATION 6 WORDS OF JUSTICE BRONSM IN PIERCE VS. DELAMETER. A JUDGE OUGHT TO BE WISE ENOUGH TO KNOW THAT HE IS FALLIBLE AND THEREFORE EV ER READY TO LEARN, GREAT AND HONEST ENOUGH TO DISCARD ALL MERE PRIDE OF OPINION AND FOLLOW THE TRUTH WHEREVER IT MAY LEAD AND COURAGEOUS ENOUGH TO KNOWL EDGE HIS ERROR. [HON'BLE SUPREME COURT IN DISTRIBUTORS BARODA (47 CTR 349)]. FURTHER IT HAS BEEN HELD THAT ONCE THE COURT COMES TO A CONCLUSION THAT A WR ONG ORDER HAS BEEN PASSED IT BECOME THE SOLEMN DUTY OF THE COURT TO RECTIFY T HE MISTAKE RATHER THAN PERPETUATE THE SAME. [HOTEL BALAJI & ORS. VS. STATE OF ANDHRA PRADESH & ORS. (AIR 1993 SCI 048)]. 12. THIS ASPECT IS FURTHER ACCENTUATED ON THE SPECI FIC FACTS OF THIS TRUST WHERE AS NOTED BY THE ASSESSING OFFICER THE ASSESSE E TRUST IS REQUIRED TO APPLY ITS INCOME AS PER THE MANDATE OF THE ACT. FURTHERMO RE, SECTION 11 ALSO PROVIDES FOR A SITUATION WHERE THE INCOME IS ACCRUE D BUT NOT RECEIVED BY THE TRUST. EXPLANATION (2) TO SECTION 11(1) CLEARLY STA TES THAT IF THE INCOME EXPENDED FALL SHORT OF 85% OF THE INCOME FOR THE RE ASON THAT THE INCOME HAS NOT BEEN RECEIVED DURING THE YEAR OR FOR ANY OTHER REASON THEN AN OPTION IS GIVEN TO THE ASSESSEE TO INTIMATE THE ASSESSING OFF ICER THAT THE SAME WOULD BE SPENT IN THE YEAR OF RECEIPT OR IN THE IMMEDIATELY FOLLOWING YEAR AS THE CASE MAY BE. THIS FURTHER MAKES THIS CASE OF THE ASSESSE E DISTINGUISHABLE AND THE ASSESSEE CANNOT BE ALLOWED TO CIRCUMVENT THE PROVIS IONS OF APPLYING INCOME BY REDUCING INCOME AT SOURCE ITSELF. THE CASE LAWS REF ERRED BY LEARNED COUNSEL OF THE ASSESSEE WHERE ACCOUNTING ON RECEIPT BASIS FOLL OWED IN EARLIER YEAR WAS ALLOWED TO BE CONTINUED, WERE ON THE FACTS OF EACH CASE. ACCORDINGLY, WE ARE OF THE CONSIDERED OPINION THAT THE SYSTEM FOLLOWED BY THE ASSESSEE OF ONLY ACCOUNTING INTEREST INCOME ON RECEIPT BASIS IS NOT SUSTAINABLE. 13. IN THIS VIEW OF THE MATTER THE ASSESSING OFFICE R IS CORRECT PRINCIPALLY IN HOLDING THAT THE ASSESSEE IS REQUIRED TO ACCOUNT FO R THE INTEREST ON ACCRUAL BASIS. HOWEVER, WE NOTE THAT THE ASSESSEE IS ACCOUN TING FOR THE INTEREST ON RECEIPT BASIS. HENCE, ASSESSEE MUST HAVE ACCOUNTED FOR THE INTEREST OF EARLIER YEAR WHICH HAS BEEN RECEIVED DURING THE YEAR ON REC EIPT BASIS. HENCE, BY THIS ADITYA BIRLA FOUNDATION 7 CHANGE OF METHOD OF ACCOUNTING THE ASSESSEES INCOM E WOULD INCLUDE INTEREST INCOME OF EARLIER YEAR RECEIVED DURING THIS YEAR AS WELL AS INTEREST INCOME ACCRUED FOR THE YEAR. THIS WILL AMOUNT TO TAXING MO RE INTEREST INCOME THAN THAT WHAT IS LEGITIMATELY TAXABLE FOR THIS YEAR. HE NCE WE ARE OF THE OPINION THAT FROM THE INTEREST ACCRUED FOR THE YEAR THE INTEREST INCOME OF EARLIER YEAR WHICH HAD ACCRUED IN EARLIER YEAR BUT WERE ACCOUNTED FOR ON RECEIPT BASIS DURING THIS YEAR SHOULD BE REDUCED. THE RESULTANT FIGURE SHOULD BE ADDED TO THE INCOME OF THE ASSESSEE. APROPOS GROUND NO. 3 14. BRIEF FACTS THE ASSESSEE HAS LEASED OUT HOSPITA L BUILDING STANDING AT SURVEY NO. 31 OF VILLAGE THERAGAON TO ABHSL FOR 29 YEARS AT THE RENT OF RS. 4.10 PER SQ. FT. PER MONTH. THE ASSESSEE HAS ALSO L EASED OUT STAFF QUARTERS WHICH IS A PART OF THE HOSPITAL COMPLEX TO THE SAME ABHSL AT A RENT OF RS. 3 PER SQ. FT. PER MONTH. THE SAID RENT IS REVISABLE A T THE RATE OF 5% AFTER EVERY 5 YEARS. THE LEASE RENT INCOME WAS DISCLOSED UNDER 'I NCOME FROM HOUSE PROPERTY FOR THE PURPOSE OF RETURN OF INCOME. THE LD. AO HE LD THAT THE TRANSACTION OF LEASE IS A TRANSACTION AMONG RELATED CONCERN OF ADI TYA BIRLA GROUP. FURTHER, ADITYA BIRLA HEALTH SERVICE LTD. IS A PROFIT MAKING CONCERN. THEREFORE, ADITYA BIRLA HEALTH SERVICE LTD. HAS AN INCENTIVE TO INCRE ASE ITS PROFITS BY PAYING LOWER LEASE RENTAL VALUE TO THE ASSESSEE. THAT THRO UGH THIS, ASSESSEE FOUNDATION WILL HAVE LOWER INCOME AT ITS DISPOSAL F OR CHARITABLE ACTIVITIES AND THE LESSEE WOULD INCREASE ITS PROFIT THEREBY INCREA SE ITS NET WORTH. THAT THE RETURN ON INVESTMENT FOR ABHSL WILL BE MUCH QUICKER WITH LOWER LEASE RENTALS. THAT FURTHER, BY DONATING TO THE ASSESSEE, THE DONO RS WOULD GET DEDUCTION U/S.80G AND THE ASSESSEE HAS ALSO CLAIMED DEPRECIAT ION ON THE SAME. THAT THE LESSEE (ABHSL) ALSO CLAIMS DEPRECIATION ON THE ASSETS INVESTED AND IT HAS THE FACILITY OF UTILIZING THE HOSPITAL BUILDING AND THE RESIDENTIAL BUILDING AT A LOWER THAN MARKET VALUE. ADITYA BIRLA FOUNDATION 8 15. FURTHER, ON BASIS OF ANALYSIS OF THE SHAREHOLDI NG PATTERN OF ABHSL AND TRUSTEES OF THE ASSESSEE AS ON MARCH 31, 2011, THE LD. AO CONCLUDED THAT ABHSL IS A RELATED CONCERN OF THE ASSESSEE AND HELD THAT THE LEASE RENT CHARGED BY THE ASSESSEE WAS NOT AT ARM'S LENGTH. 16. THE LD. AO INVOKED SECTION 13(2)(B) R.W.S 13(2) AND MADE AN ADDITION OF RS. 8,78,94,440/- ON THE GROUND THAT THE LEASE RENT AL CHARGED BY THE ASSESSEE FROM ABHSL IS NOT AT FAIR VALUE. THE LD. AO OBSERVE D FROM THE BALANCE SHEET OF THE ABHSL THAT IT IS EARNING A GOOD AMOUNT OF PR OFIT AND THEREFORE, THE ASSESSEE OUGHT TO HAVE CHARGED A HIGHER RENT. THE L D. AO FURTHER CONTENDED THAT APPROVAL OF LEASE RENT BY HON'BLE CHARITY COMM ISSIONER U/S 36(1)(B) OF THE TRUST ACT DOES NOT VALIDATE THAT THE LEASE IS RENT IS CHARGED APPROPRIATELY AS PER THE PROVISIONS OF THE ACT. THE LD. AO FURTHER R EJECTED THAT THE GOVERNMENT VALUATION REPORT SUBMITTED BY THE ASSESSEE ON THE V IEW THAT IT SUFFERED FROM SAMPLING BIASES. THE LD. AO RELIED ON THIRD PARTY W EBSITES NAMELY MAGICBRICKS.COM AND INDIAPROPERTY.COM FOR OBTAINING LEASE RENTS QUOTED BY THIRD PARTY IN THE AREA WHERE THE HOSPITAL IS LOCAT ED. THE QUOTES WERE OBTAINED ON 23/3/2014 AND WERE DISCOUNTED AT RATE OF 10% TO ARRIVE AT THE VALUE AS ON 31/3/2011. THE FAIR RENTAL VALUE OF THE PROPERTY WA S COMPUTED AS BELOW: SR. NO. DESCRIPTION AREA RATE PER SQ.FT. PER MONTH RENTAL VALUE PER ANNUM 1 HOSPITAL BUILDING 4,48,454 19 10,22,47,512 2 STAFF HOUSING BUILDING 45,898 17 93,63,192 TOTAL 11,16,10,704 SUBSEQUENT TO RECEIVING DVO'S REPORT: 17. THE LD. DVO DETERMINED THE FAIR MARKET VALUE OF THE SAID PROPERTY TO RS. 2,61,17,501/- ONLY BEING VALUE OF LEASE RENTALS OF HOSPITAL BUILDING AT RS. 4.45/- PER MONTH PER SQ FT AND FOR STAFF QUARTERS A T RS. 3.94A PER MONTH PER SQ FT. WHICH ARE MARGINALLY HIGHER THAN THE RATE CHARG ED BY THE ASSESSEE TRUST I.E. 4.10/- PER MONTH PER SQ FT. FOR HOSPITAL BUILDING A ND RS. 3/- PER MONTH PER SQ ADITYA BIRLA FOUNDATION 9 FT. FOR STAFF QUARTERS. THEREAFTER, THE LD. AO PASS ED AN ORDER U/S 154 OF THE ACT DATED JUNE 19, 2014 RESTRICTING THE SAME TO RS. 2,6 1,17,501/- AS AGAINST EARLIER DETERMINED BY THE LD. AO AT RS. 11,16,10,70 4/-. 18. UPON ASSESSEES APPEAL LEARNED CIT(A) GRANTED R ELIEF TO THE ASSESSEE HOLDING AS UNDER : THE FACTS OF THE CASE ARE THAT THE APPELLANT HAD ACQUIR ED A LAND AT PUNE AND CONSTRUCTED HOSPITAL BUILDING AND STAFF QUARTERS. IN FURTHERANCE OF THIS, THE APPELLANT HAD LEASED THE SAME TO ABHSL FOR A PERIOD O F 29 YEARS AT THE RENT OF RS.4.10 PER SQ. FT. PER MONTH AND AT RS. 3/- PER SQ. FT. PER MONTH. THE LEASE DEED WAS EXECUTED ON 15/01/2007, WHICH WAS VA LID FOR A PERIOD OF 29 YEARS. ON PERUSAL OF THE SAID LEASE DEED, IT IS OBSERVED THA T THE RENT WAS REVISABLE AT THE RATE OF 5% AFTER EVERY 5 YEARS. THE APPELLANT TRU ST HAD INCLUDED THE RENT IN ITS RETURN OF INCOME. THE AO HAS HOWEVER, HELD THA T THE ENTIRE ARRANGEMENT OF ENTERING INTO THE LEASE WITH ABHSL WAS TO INCREASE THE PROFIT OF THE SAID ENTITY AND THEREBY REDUCE THE LEASE RENTA L INCOME OF THE APPELLANT. AT THE SAME POINT OF TIME, ACCORDING TO THE AO, THE DONO RS OF THE APPELLANT TRUST WOULD ENJOY EXEMPTION U/S. 80G OF THE ACT. THE AO HAS FURTHER HELD THAT BASED ON THE SHAREHOLDING PATTERN OF ABHSL THE SAID LESSEE IS A RELATED CONCERN OF THE APPELLANT AND ACCORDINGLY INVOKING SE CTION13(2)(B) READ WITH SECTION 13(3) THE AO HAS MADE AN ADDITION OF RS.8.78 CRORES ON THE GROUND THAT THE RENT CHARGED BY THE APPELLANT TRUST IS NOT A FAI R RENT. THE AO HAS ALSO NOTED THAT APPROVAL OF THE LEASE RENT BY CHARITY COMMISSIONER UNDER THE BOMBAY PUBLIC TRUST ACT IS NOT R ELEVANT FOR THE PURPOSE OF INCOME TAX ACT. THEREFORE, TO SUMMARISE, THE AO AFTER REFERRING TO CER TAIN WEBSITES COMPUTED THE RENT OF RS. 19/- PER SQ. FT. AND RS.17/- PER SQ. FT. FOR HOSPITAL BUILDING AND STAFF QUARTERS RESPECTIVELY AND MADE THE ABOVE ADD ITION. IT IS NOTED THAT SUBSEQUENT TO THE ASSESSMENT ORDER PASSED BY THE AO, ON RECEIPT OF THE REPORT OF DVO, THE AO HAS PASSED THE RECTIFICATION ORDER U/S.154 DATED JUNE 19, 2014 AND RESTRICTED THE ADDITION TO RS. 0.24 CRORES AS AGAINST THE EARLIER DETERMINATION OF ADDITION OF RS.8.78 CORES. DURING THE COURSE OF THE APPELLATE HEARING DETAILED S UBMISSIONS ON THESE POINTS WERE MADE BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT AS REPRODUCED ABOVE. THE CONTENTION RAISED BY THE APPELL ANT IS THAT THE AO HAS MERELY BASED ON CERTAIN DATA ASSUMED THAT ABHSL IS A RELATED PARTY U/S. 13(3). THE APPELLANT HAS IN THE COURSE OF THE SUBMISS ION DEMONSTRATED THAT HOW CLAUSE (A) TO (D) OF SECTION 13(3) ARE NOT APPLI CABLE TO THE PRESENT FACTS. INSOFAR AS CLAUSE 13(3)(E) IS CONCERNED, THE SAID CL AUSE APPLIES IN RESPECT OF A ADITYA BIRLA FOUNDATION 10 CONCERN IN WHICH ANY OF THE TRUSTEES/MANAGER ETC. HAV E A SUBSTANTIAL INTEREST. FURTHER, SUBSTANTIAL INTEREST HAS BEEN DEFINE D UNDER EXPLANATION 3 TO SECTION 13 TO HAVE ATLEAST 20% OF THE VOTING POWER OR 20% OF THE PROFITS. I HAVE EXAMINED THE SHAREHOLDING PATTERN OF ABHSL A ND ALSO COMPARED THE SAME WITH THE LIST OF TRUSTEES OF THE APPELLANT TRUST. I FIND THAT MRS. RAJSHREE BIRLA, MR. B.L. SHAH AND MR. ASHWIN KOTHAR I ARE THE THREE PEOPLE WHO ARE THE TRUSTEES OF THE APPELLANT TRUST AND SHAREHO LDERS OF ABHSL. HOWEVER, THE TOTAL SHARES HELD BY THESE THREE PERSONS COLLECTIVELY IS 30 SHARES AS COMPARED TO THE TOTAL SHARE CAPITAL OF 50,000 SHARES OF ABHSL. THUS, EVEN COLLECTIVELY, THE SHAREHOLDING OF THE TRUST EES IN ABHSL IS FAR BELOW THE THRESHOLD OF 20%. THUS, IN MY VIEW UNDER SPECIFIC PROVISIONS OF SECTIO N 13 WHICH ARE RELEVANT FOR CHARITABLE TRUST, I HOLD THAT ABHSL IS NOT A RELAT ED-PARTY U/S. 43(3) OF THE ACT AND THUS THE ADDITION MADE BY THE AO IS DELETED. THE APPELLANT HAS ALSO SUBMITTED THAT ASSUMING WITHOUT AD MITTING THAT ABHSL WAS A RELATED PARTY, EVEN THEN THE WORD BEING USED U/S.13(2)(B) IS 'ADEQUATE RENT' AND NOT 'FAIR RENT'. THUS THE APPELLANT HAS SUBMITTED-THAT WHENEVER THE L EGISLATURE HAS USED THE WORD ADEQUATE AND NOT FAIR, IT HAS BEEN SPECIFICALLY USED AND ACCORDINGLY THE ACT OF THE AO IN COMPARING THE RATES FROM THE WEBSITE IS NOT TENABLE. THEREFORE, IN MY VIEW, THE APPELLANT IS RIGHT IN ITS A BOVE CONTENTION THAT ADEQUATE CONNOTES SOMETHING MINIMUM BUT DEFINITELY DOE S NOT CONNOTE THE FAIR MARKET RATE. FURTHER, THE CHARITY COMMISSIONER HAS ALSO APPROVED THE LEASE DEED AND EVEN THE DVO HAS SUBSEQUENTLY DETERMI NED THE VALUE WHICH WAS NEARER TO THE VALUE ORIGINALLY FIXED BY THE APPELL ANT. I ALSO FIND DURING THE COURSE OF THE ARGUMENT THAT SI NCE LEASE DEED HAS BEEN EXECUTED FOR PERIOD OF 29 YEARS AND IT CONSIDERED CL AUSE FOR INCREMENT AFTER A STIPULATED PERIOD AND THE SAME HAS BEEN APPROVED BY TH E CHARITY COMMISSIONER, THE DEPARTMENT CANNOT DETERMINE THE FA IR RATE EVERY YEAR. IN FACT THE BOMBAY HIGH COURT IN THE CASE OF VIRENDRA VS. APPROPRIATE AUTHORITY (327 ITR 185) HAS CATEGORICALLY HELD THAT THE INCOME TAX AUTHORITY CANNOT DISREGARD THE ORDERS OF THE COMPETENT AUTHORITY UNDER THE TRUST ACT UNLESS THERE IS ANY CONTRARY MATERIAL. IN VIEW OF THE ABOVE DISCUSSION, I DELETE THE ABOVE ADDITION MADE BY THE AO AND ACCORDINGLY GROUND NO. IV IS ALLOWED. 19. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 20. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSING OFFICERS ORDER NEEDS TO BE UPHELD. HE SUBMITTED THAT THE ASSESSING OFFICERS FINDING OF THE ADITYA BIRLA FOUNDATION 11 PERSON SPECIFIED BEING BENEFICIAL OWNER IS CORRECT. IN THIS REGARD HE PLACED RELIANCE UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF NATIONAL TRAVEL SERVICES VS. CIT (300 CTR 582). HE FURTHER S UBMITTED THAT THE ASSESSING OFFICER HAS CORRECTLY COMPUTED THE INCOME FROM HOUSE PROPERTY. IN THIS REGARD HE PLACED RELIANCE UPON THE DECISION OF FOLLOWING CASE LAWS :- ACIT VS. CYRUS INVESTMENTS (P) LTD. (93 TAXMANN.COM 4 93)(MUM TRIB) CIT VS. TIP TOP TYPOGRAPHY (48 TAXMANN.COM 191) (BOM HIGH COURT) NEW JEHANGIR VAKIL MILLS CO. LTD. VS. CIT (49 ITR 1 37) 21. PER CONTRA LEARNED COUNSEL OF THE ASSESSEE SUPP ORTED THE ORDER OF LEARNED CIT(A). LEARNED COUNSEL OF THE ASSESSEE SUB MITTED THAT LEARNED CIT(A) HAS GIVEN CORRECT FINDING THAT THE PERSONS SPECIFIE D ARE NOT HAVING BENEFICIAL INTEREST AS PER THE PROVISIONS OF THE ACT. HE FURT HER REITERATED THAT THE RENTAL VALUE APPROVED BY CHARITY COMMISSIONER HAS CORRECTL Y BEEN ACCEPTED BY LEARNED CIT(A). IN THIS REGARD HE PLACED RELIANCE U PON THE FOLLOWING CASE LAWS : CIT VS. SHRIRAM PISTONS & RINGS LTD (181 ITR 230) VIRENDRA VS. APPROPRIATE AUTHORITY (327 ITR 185) SARGAM CINEMA VS. CIT (328 ITR 513) AMOL CHAND VARSHNEY SEWA SANSTHAN VS. ACIT (142 ITD 658) HDFC BANK LTD. VS. ACIT (WP NO. 462 OF 2017) JRD TATA TRUST VS. DCIT (122 TAXMANN.COM 275) COMMISSIONER OF GIFT TAX VS. NELSON & CO.(245 ITR 3 47) DIT VS. SPAN FOUNDATION (178 TAXMAN 436) 22. UPON CAREFUL CONSIDERATION WE NOTE THAT AFTER E XAMINING SHAREHOLDING PATTERN OF THE PERSON SPECIFIED, LEARNED CIT(A) HAS GIVEN A FINDING THAT CLAUSE (A) TO (D) OF SECTION 13(3) OF THE ACT ARE NOT APPL ICABLE. FURTHER LEARNED CIT(A) HAS GIVEN A FINDING WITH RESPECT TO SECTION 13(3)(E ) OF THE ACT THE SAID CLAUSE IS NOT APPLICABLE HERE. LEARNED CIT(A) HAS GIVEN A FINDING THAT HE HAS EXAMINED THE SHAREHOLDING PATTERN OF ABHSL AND ALSO COMPARED THE SAME WITH THE LIST OF THE TRUSTEES OF THE APPELLANT TRUS T. HE HAS FOUND THAT MRS. RAJSHREE BIRLA, MR. B.L. SHAH AND MR. ASHWIN KOTHAR I ARE THE THREE PEOPLE WHO ARE THE TRUSTEES OF THE APPELLANT TRUST AND SHA REHOLDERS OF ABHSL. THAT HOWEVER, THE TOTAL SHARES HELD BY THESE THREE PERSONS COLLECTIVELY ARE 30 SHARES AS COMPARED TO THE TOTAL SHARE CAPITAL OF 50 ,000 SHARES OF ABHSL. ADITYA BIRLA FOUNDATION 12 THAT THUS, EVEN COLLECTIVELY, THE SHAREHOLDING OF T HE TRUSTEES IN ABHSL IS FAR BELOW THE THRESHOLD OF 20%. HENCE LEARNED CIT(A) HE LD THAT IN VIEW OF SPECIFIC PROVISIONS OF SECTION 13 OF THE ACT HE HEL D THAT ABHSL IS NOT A RELATED PARTY UNDER SECTION 13(3) OF THE ACT AND TH US ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. 23. WE FIND THAT APPARENTLY THERE IS NO ERROR IN TH E FINDING OF LEARNED CIT(A). LEARNED CIT(A)-DR COULD NOT COGENTLY REBUT THE LEAR NED CIT(A)S FINDING BUT TRIED TO MAKE OUT OF THE CASE THAT THE SHAREHOLDER LIST OF ABHSL MAY BE OBTAINED AND THEREAFTER FURTHER EXAMINATION CAN BE DONE. IN THIS REGARD WE ARE OF THE OPINION THAT THERE IS NO SUCH CASE MADE OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. HE HAS SIMPLY MADE A PRESUMPT ION WITHOUT ACTUALLY ANALYZING THE FACTS. IT IS SETTLED LAW THAT MERE PR ESUMPTION IS NOT SUSTAINABLE. WHATEVER MATERIAL THE ASSESSING OFFICER HAS REFERRE D IN THE ASSESSMENT ORDER DOES NOT PROVE THAT THIS TRANSACTION IS TRANSACTION BETWEEN THE RELATED CONCERNS. IN ABSENCE OF ANY COGENT MATERIAL BROUGHT ON RECORD BY LEARNED DEPARTMENTAL REPRESENTATIVE, WE ARE NOT INCLINED TO DIRECT ANY FURTHER ROVING INQUIRY. IN THIS VIEW OF THE MATTER WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO INFIRMITY IN THE ORDER OF LEARNED CIT(A) IN T HIS REGARD. 24. AS REGARDS THE OTHER ASPECTS IN THIS REGARD I.E . QUANTIFICATION OF RENT WE FIND THAT ONCE THE ASSESSEE IS NOT FALLING THE AMBI T OF SECTION 13(1) OF THE ACT THIS ISSUE DOES NOT ARISE. IN ANY CASE, THE ACT OF THE ASSESSING OFFICER OF NOTIONAL ADDITION OR THROUGH DVO IS NOT SUSTAINABLE ON THE TOUCHSTONE OF HON'BLE BOMBAY HIGH COURT DECISION IN THE CASE OF V IRENDRA VS. APPROPRIATE AUTHORITY & ORS. (327 ITR 185). IN AS MUCH AS IN TH E SAID CASE IT WAS HELD THAT APPROVAL BY THE COMPETENT AUTHORITY IS FAIR ESTIMAT E. MOREOVER, THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF TIP TOP TY POGRAPHY (SUPRA) DOES NOT MANDATE THIS TYPE OF COMPUTATION OF RENTAL INCOME D ONE BY THE ASSESSING OFFICER. ACCORDINGLY, IN THE BACKGROUND OF THE AFOR ESAID DISCUSSION AND PRECEDENT, WE UPHOLD THE ORDER OF LEARNED CIT(A). S INCE THE TWO DECISIONS OF HON'BLE BOMBAY HIGH COURT ARE IN FAVOUR OF THE ASSE SSEE, OTHER DECISIONS OF ADITYA BIRLA FOUNDATION 13 THE TRIBUNAL IN THIS REGARD ARE NOT BEING DEALT WIT H. AS WE ARE NOT UPHOLDING THE ORDER OF LEARNED CIT(A) ON THE PRINCIPAL OF RES JUDICATA, THE DECISION OF HON'BLE APEX COURT IN NEW JEHANGIR VAKIL MILLS CO. LTD. (SUPRA) IS NOT APPLICABLE. APROPOS GROUND NO. 4 25. BRIEF FACTS ARE THAT THE ASSESSEE HAD FILED APP LICATION FOR ACCUMULATION OF INCOME IN FORM 10 FOR THE PREVIOUS YEAR ON SEPTEMBE R 30, 2011 ALONG WITH RETURN OF INCOME. HOWEVER, ASSESSING OFFICER HAS FA ILED TO GIVE EFFECT TO FORM 10. THE ASSESSEE MADE FOLLOWING SUBMISSION BEFORE LEARNED CIT(A) :- THE APPELLANT HUMBLY SUBMITS THAT WITHOUT PREJUDICE TO I TS MAIN CONTENTION THAT SET OFF OF THE DEFICIT OF EARLIER YEARS IS ALLOWAB LE AGAINST THE INCOME OF THE CURRENT YEAR, THE ASSESSED INCOME SHOULD BE CONSIDERE D AS DEEMED APPLICATION IN THE YEAR UNDER CONSIDERATION, SINCE S ECTION 11(2) OF THE ACT PROVIDES THAT IF THE APPLICATION OR DEEMED APPLICATION OF THE INCOME FALLS SHORT OF 85% OF THE INCOME, THE SHORT-FALL SHALL NO T BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME, PROVIDED CERTAIN CONDITIONS ARE FULFILLED. THE RELEVANT EXTRACT OF THE SECTION AS RELEVANT TO THE YEAR UNDER CONSIDERATION IS REPRODUCED BELOW FO R READY REFERENCE: '11. (2) WHERE EIGHTY-FIVE PER CENT OF THE INCOME REFERR ED TO IN CLAUSE (A) OR CLAUSE (B) OF SUB-SECTION (1) READ WITH THE EXPLANATION TO THA T SUBSECTION IS NOT APPLIED, OR IS NOT DEEMED TO HAVE BEEN APPLIED, TO CHARITABLE OR RELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEAR BUT IS ACCUMULATED OR SET APART, EITHER IN WHOLE OR IN PART, FOR APPLICATION TO SUCH PURPOSES IN INDIA, SU CH INCOME SO ACCUMULATED OR SET APART SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME, PROVIDED THE FOLLO WING CONDITIONS ARE COMPLIED WITH, NAMELY: [(A) SUCH PERSON FURNISHES A STATEMENT IN THE PRESC RIBED FORM AND IN THE PRESCRIBED 3 MANNER TO THE ASSESSING OFFICER, STATING THE PURPO SE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PE RIOD FOR WHICH THE INCOME IS TO BE ACCUMULATED OR SET APART, WHICH SHALL IN N O CASE EXCEED FIVE YEARS; (B) THE MONEY SO ACCUMULATED OR SET APART IS INVEST ED OR DEPOSITED IN THE FORMS OR MODES SPECIFIED IN SUB-SECTION (5); (C) THE STATEMENT REFERRED TO IN CLAUSE (A) IS FURN ISHED ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139 FOR FURNISHING THE RETURN OF INCOME FOR THE PREVIOUS YEAR:' ADITYA BIRLA FOUNDATION 14 THE SECTION PROVIDES THAT WHERE 85% OF THE INCOME IS NOT APPLIED OR IS HOT DEEMED TO HAVE BEEN APPLIED BUT THE SAME IS ACCUMULAT ED OR SET APART BY FURNISHING A STATEMENT IN THE PRESCRIBED FORM WHEREIN THE PURPOSE AND THE PERIOD OF ACCUMULATION IS SPECIFIED, THE SAME WILL N OT BE INCLUDED IN THE TOTAL INCOME PROVIDED THE STATEMENT OF ACCUMULATION HAS BEEN FURNISHED BEFORE THE DATE OF FILING THE RETURN OF INCOME AS PER SECTION 139(1) AND THE AMOUNT SO ACCUMULATED OR SET APART HAS BEEN INVESTED IN THE M ODES SPECIFIED IN SECTION 11 (5) OF THE ACT. THE APPELLANT SUBMITS THAT IT HAD SUBMITTED FORM 10 ON SEPTEMBER 30, 2011 WHICH IS WELL WITHIN THE TIME SPECIFIED FOR FIL ING THE RETURN OF INCOME AS PER SECTION 39(1) OF THE ACT. FURTHER, THE PURPOSE AS W ELL AS THE PERIOD OF ACCUMULATION WAS SPECIFIED IN FORM 10. FURTHERMORE, THE APPELLANT EVEN INVESTED THE ACCUMULATED AMOUNT IN THE MODES SPECIFIED IN SECTION 11(5) OF THE ACT. THUS, THE APPELLANT HUMBLY SUBMITS THAT ALL THE CONDITIONS OF SECTION 11 (2) OF THE ACT ARE SATISFIED. THE APPELLANT, THEREFORE, SUBMITS THAT THE FORM 10 FILE D BY THE APPELLANT BE GIVEN EFFECT TO AND THUS, THE INCOME COMPUTED BY THE A O BE TREATED AS ACCUMULATED OR SET APART UNDER SECTION 11(2) OF THE AC T. 26. CONSIDERING THE ABOVE LEARNED CIT(A) GRANTED RE LIEF AS UNDER :- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMI SSIONS MADE BY THE APPELLANT. IT IS NOT DISPUTED THAT THE APPELLANT HAD FILE D FORM NO. 10 ALONG WITH ITS RETURN OF INCOME. THUS, AFTER GIVING EFFEC T TO THE APPELLATE ORDER IF THERE IS ANY SURPLUS INCOME FOR THE CURRENT YEAR FOR SET OFF OF PAST DEFICIT, IF ANY, THEN THE AO IS DIRECTED TO CONSIDER FORM NO. 10 F ILED BY THE APPELLANT AND COMPUTE THE INCOME AS PER LAW. 27. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL. 28. BOTH THE COUNSEL FAIRLY AGREED THAT THIS IS CON SEQUENTIAL ISSUE AND LEARNED CIT(A) HAS PASSED A CORRECT ORDER. HENCE, W E UPHOLD THE ORDER OF LEARNED CIT(A). 29. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED. PRONOUNCED IN THE OPEN COURT ON 16.6.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 16/06/2021 COPY OF THE ORDER FORWARDED TO : ADITYA BIRLA FOUNDATION 15 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI