Maheshwari Charitable Trust, Ahmedabad V. The ADIT, (Exemp.), Ahmedabad

ITA 456/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94644 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR
• Assessee Lawyers: A L THAKKAR
• Keywords: Charitable institution
• Section: 143(3); 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA NO: 456/AHD/2014 (ASSESSMENT YEAR: 2009-10) MAHESHWARI CHARITABLE TRUST F.F. 2, ANKINI HOUSE, NR. USMANPURA GARDEN, USMANPURA, AHMEDABAD V/S THE ASSTT. DIRECOTOR OF INCOME TAX, (EXEMPTION), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAATM3261F APPELLANT BY : SHRI A.L. THAKKAR, AR RESPONDENT BY : SHRI PRADIPKUMAR MAJUMDAR SR. D.R . ( )/ ORDER DATE OF HEARING : 14-10-2015 DATE OF PRONOUNCEMENT : 26 -10-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-XXI, AHMEDABAD DATED 29.11.2013 FOR A.Y. 2009-10. ITA NO 456/A HD/2014 . A.Y. 2009-10 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. THE ASSESSEE IS A TRUST REGISTERED U/S 12AA OF THE ACT. IT FILED ITS RETURN OF INCOME FOR AY 09-10 ON 4.8.2009 DECLARING TOTAL INC OME OF RS. 1,52,140/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER A SSESSMENT WAS FRAMED U/S 143(3) R.W.S. 144 OF THE ACT VIDE ORDER DATED 26.12 .2011 AND THE TOTAL INCOME WAS DETERMINED AT RS. 2,18,270/- AND THE A.O ALSO TREATED THE ASSESSEE TO BE AN ASSOCIATION OF PERSON (AOP). AGGR IEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 29.11.2013 UPHELD THE ORDER OF A.O. AGGRIEVED BY TH E ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF THE ADIT (EXEMPTION), AHME DABAD IN TREATING THE STATUS OF THE APPELLANT AS AOP AND DISALLOWING THE DEDUCTION CLAIMED U/S. L1 OF THE ACT, 1961. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN HOLDING THAT THE APPELLANT IS NOT ELIGIBLE FOR THE BENEFIT OF SECTION 11 OR 12 OF THE I. T. ACT, 1961. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENSES OF RS.66,13 0/- MADE BY THE ADIT (EXEMPTION), AHMEDABAD GROUND NO. 1 & 2 ARE WITH RESPECT TO TREATING THE ASSESSEE AS AOP. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TED THAT ASSESSEE HAD ADVANCED LOAN TO M/S. GAGGAR ENTERPRISES PVT. LTD., WHO WAS A PERSON ITA NO 456/A HD/2014 . A.Y. 2009-10 3 COVERED U/S. 13(3) OF THE ACT AND THEREFORE ASSESSE ES CASE FALLS U/S. 13(2) OF THE ACT. HE ACCORDINGLY HELD THAT ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S. 11 OF THE ACT AND THUS DENIED THE DEDUCTION U/ S. 11 OF THE ACT AND HELD THE ASSESSEE TO BE AOP. LD. CIT(A) UPHELD THE ORDER OF A.O AND THEREFORE ASSESSEE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, ID AR REITERATED THE SUBMISSIONS MADE BE FORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT THE LOAN ADVANCED TO GAG GAR ENTERPRISES PVT. LTD WAS INTEREST BEARING LOAN AND DURING THE YEAR ASSES SEE HAD RECEIVED THE INTEREST AT THE RATE OF 10 % AND THAT THE RATE OF I NTEREST CHARGED WAS HIGHER THAT THE RATE OF INTEREST ON DEPOSITS PLACED WITH B ANK AND THAT FURTHER DURING THE MONTH OF MARCH 2013 ITSELF THE LOAN HAS BEEN RE PAID BY GAGGAR ENTERPRISES PVT. LTD. AND RETURNED BACK TO THE ASSE SSEE AND IN SUPPORT OF WHICH HE ALSO PLACED ON RECORD THE COPY OF THE LEDG ER ACCOUNT OF GAGGAR ENTERPRISES AS APPEARING IN ITS BOOKS OF ACCOUNTS. HE THEREFORE SUBMITTED THAT ASSESSEES CASE CANNOT BE CONSIDERED TO BE FAL LING U/S. 13(A) OF THE ACT AND THEREFORE SUBMITTED THAT A.O BE DIRECTED TO NOT TO TREAT THE ASSESSEE AS AN AOP. HE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS SHRI BALDEOJI MAHARAJ TRUST (2006) 154 TAXMAN 241 (ALL) AND CIT VS SARLADEVI SARABHAI TRUST NO 2 (1988) 172 ITR 698 (GUJ) AND PL ACED A COPY OF THE SAME ON RECORD. LD. DR ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE ADVANCING OF LOAN TO A PARTY WHICH IS COVERED U/S 13 OF THE ACT IS NOT IN DISPUTE. IT IS ALSO A FACT THAT O N THE AMOUNT THAT HAS BEEN ADVANCED BY THE ASSESSEE TO GAGGAR ENTERPRISES PVT. LTD., ASSESSEE HAS ITA NO 456/A HD/2014 . A.Y. 2009-10 4 RECEIVED INTEREST AT THE RATE OF 10 % WHICH IS MORE THAN THE RATE OF INTEREST RECEIVED BY THE ASSESSEE ON THE DEPOSITS PLACED WIT H THE BANKS. IT IS ALSO NOT IN DISPUTE THAT THE AMOUNT THAT HAS BEEN ADVANCED B Y THE ASSESSEE TO GAGGAR ENTERPRISES PVT. LTD. HAS BEEN RETURNED BACK TO THE ASSESSEE DURING THE YEAR ITSELF AND THUS IN THE PRESENT CASE CONSIDERING THE FACTS AND RELYING ON THE DECISION IN THE CASE OF CIT VS SHRI BALDEOJI MAHARA J TRUST (SUPRA) WE ARE OF THE VIEW THAT THE ORDER OF LD. CIT(A) CANNOT BE UPH ELD. WE THUS DIRECT THE SETTING ASIDE OF THE ORDER OF A.O. THUS THE GROUND OF ASSESSEE IS ALLOWED. 7. GROUND NO. 2 WITH RESPECT TO DISALLOWANCE OF EXPENS ES OF RS. 66,130/- WAS NOT SERIOUSLY ARGUED BY LD. A.R. AND THEREFORE THE SAME IS DISMISSED. 8. IN THE RESULT THE APPEAL OF ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 26 - 10 - 2015. (S.S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD