ITO (E) -II(1), MUMBAI V. LILAVATI KIRTILAL MEHTA MEDICAL TRUST, MUMBAI

ITA 4495/MUM/2010

• Counselvise Citation: 449519914 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 01-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS USHA NAIR
• Section: 143(3); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, A, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND R.K.PANDA (A.M ) ITA NO.4495/MUM/2010 (ASSESSMENT YEAR:2002-03) INCOME TAX OFFICER, (E)-II(1), ROOM NO.509, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 LILAVATI KIRTILAL MEHTA MEDICAL TRUST, A/791, BANDRA RECLAMATION, BANDRA (WEST), MUMBAI-400050 PAN: AAATL1398Q APPELLANT V/S RESPONDENT DATE OF HEARING : 25.7.2011 DATE OF PRONOUNCEMENT : 25.7.2011 APPELLANT BY : MRS.USHA N AIR RESPONDENT BY : SHRI A.R.SHA H O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 25.1.2010 PASSED BY THE LEA RNED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2002-03 TAKING FOLLOWING GROUNDS OF APPEAL : . 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A), MUMBAI HAS ER RED IN HOLDING THAT THE ADVANCE OF RS.2,30,00,000/- GI VEN BY THE ASSESSEE TO M/S BEAUTIFUL REALTORS PVT. LTD. AG AINST THE PURCHASE OF PROPERTY OR FOR DEFINITE PURPOSE W HEN THERE IS NO EVIDENCE TO SUPPORT SUCH FINDING AND SPECIFICALLY IN THE ABSENCE OF ANY AGREEMENT TO SU CH EFFECT AND CONSEQUENTLY HOLDING THAT THERE IS NO VIOLATION OF PROVISIONS OF SECTION 13(2)(A) OF THE IT ACT, 1961. ITA NO.4495/MUM/2010 (ASSESSMENT YEAR:2002-03) 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A), MUMBAI ERRED IN REL YING ON THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2001-02 WITHOUT APPRECIATING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE ITATS DECISION A ND FILED AN APPEAL BEFORE HIGH COURT WHICH IS PENDING FOR ADJUDICATION AND THE ISSUE THEREFORE NOT ATTAINED F INALITY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A), MUMBAI ERRED IN IGN ORING THE FACT THAT THE SUM ADVANCED TO M/S BEAUTIFUL RE ALTORS PVT. LTD. A COMPANY IN WHICH THE RELATIVES OF SOME OF THE TRUSTEES ARE INTERESTED, THEREBY VIOLATING THE PROVISIONS OF SECTION 13. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, MUMBAI BE S ET ASIDE AND THAT OF THE AO BE RESTORED 2. AT THE TIME OF HEARING, THE LEARNED D.R. SUPPORT S THE ORDER OF THE AO. 3. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITS THAT THE ABOVE ISS UE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN LILAVATI KIRTILA L MEHTA MEDICAL TRUST V/S ITO IN ITA NO.5970/MUM/2004 FOR THE ASSESSMENT YEAR 2001-02, ORDER DATED 24.3.2008, THE REFORE, FOLLOWING THE SAME, THE ISSUE MAY BE DECIDED ACCOR DINGLY. 4. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD WE FIND THAT THE ASSESSEE IS A TRUST FILED RETURN DECLARIN G TOTAL INCOME AT RS.NIL. DURING THE COURSE OF ASSESSMENT ITA NO.4495/MUM/2010 (ASSESSMENT YEAR:2002-03) 3 PROCEEDINGS, ON EXAMINATION OF DETAILS FILED BY THE ASSESSEE, THE AO OBSERVED THAT THE ASSESSEE TRUST HAS ADVANC ED AN AGGREGATE SUM OF RS.2,30,00,000/- TO M/S BEAUTIFUL REALTORS PVT.LTD., A COMPANY IN WHICH RELATIVES OF THE SOME OF THE TRUSTEES ARE INTERESTED. HE FURTHER OBSERVED THAT THESE FACTS ARE SIMILAR OF THOSE MENTIONED IN ASSESSMENT YEAR 2001-02, WHEREIN IT WAS HELD THAT THE ASSESSEE HAS VIOLATED PROVISIONS OF SECTION 13 AND HENCE EXEMPTION UNDER SECTION 11 WAS DENIED IN THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE AO FOLLOWING THE FINDINGS RECORDED IN THE ASSESSMENT ORDER FOR T HE ASSESSMENT YEAR 2001-02 HELD THAT THE ASSESSEE HAS FAILED TO PROVE THAT THE ADVANCE OF RS.2,30,00,000/- GIV EN BY THE ASSESSEE TO M/S BEAUTIFUL REALTORS PVT. LTD., AGA INST THE PURCHASE OF PROPERTY COULD NOT BE ESTABLISHED, THE REFORE, THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 13 OF THE ACT AND HENCE THE BENEFIT OF SECTION 11 OF THE ACT IS NOT ALLOWABLE TO THE ASSESSEE. WE FURTHER FIND THAT T HE LEARNED COMMISSIONER OF INCOME TAX (A) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 DIRECTED THE AO TO ALLOW EXEMPTION UNDER S ECTION 11 OF THE ACT. WE FURTHER FIND THAT THE ABOVE FAC TS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE T HAT THE ITA NO.4495/MUM/2010 (ASSESSMENT YEAR:2002-03) 4 TRIBUNAL IN THE ASSESSEES OWN CASE (SUPRA) VIDE PA RAGRAPH 12 OF ITS ORDER HAS HELD AS UNDER : 12. THE ASSESSEE COULD NOT FURNISH THE ABOVE DETAI LS AS THE SAME WERE NOT AVAILABLE WITH HIM. THE ASSES SING OFFICER DID NOT POINT OUT HOW IN THE ABSENCE OF TH ESE DOCUMENTS A TRANSACTION PERTAINING TO ACQUIRING ASS ET WAS CONVERTED INTO LENDING MONEY WITHOUT ADEQUATE SECURITY OR ADEQUATE INTEREST. AFTER CONSIDERING TH E TOTALITY OF THE FACTS OF THE CASE WE NOTICED THAT T HE AMOUNT OF RS.5,46,00,000/- WAS GIVEN BY THE TRUST TO M/S BEAUTIFUL REALTORS PVT.LTD TO ACQUIRE AN ASS ET. THUS, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE IT CANNOT BE HELD THAT THE TRUST HAS LENT THIS PART OF INCOME OR PROPERTY WITHOUT ADEQUATE SECURITY OR ADEQUATE INTEREST OR BOTH. IN FACT THERE IS NO LENDING OF M ONEY. THE TRANSACTION IS IN RESPECT OF ACQUIRING ASSETS FOR THE PURPOSE OF THE TRUST. WE, ACCORDINGLY FIND THAT THERE IS NO VIOLATION OF PROVISION OF SECTION 13(2)(A) OF TH E IT ACT. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUG HT ON RECORD BY THE REVENUE, WE RESPECTFULLY FOLLOWING TH E ORDER OF THE TRIBUNAL (SUPRA) HOLD THAT THERE IS NO VIOLATI ON OF PROVISIONS OF SECTION 13(2)(A) OF THE ACT AND ACCO RDINGLY, THE GROUNDS TAKEN BY THE REVENUE ARE REJECTED. 5. IN THE RESULT, THE REVENUES APPEAL STANDS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2011. SD SD (R.K.PANDA) (D.K.AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEM BER MUMBAI, DATED 25 TH JULY, 2011 ITA NO.4495/MUM/2010 (ASSESSMENT YEAR:2002-03) 5 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI