Dr. (Mrs) Anwar Basith, Bangalore V. Asst. Commissioner of Income Tax, Bangalore

ITA 495/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5339 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 1993-1994
• Appeal Filed On: 01-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS JT BENGALURU
• Assessee Lawyers: K Y NINGOJI RAO
• Keywords: Source of fund
• Section: 234B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.495 & 496/BANG/2017 ASSESSMENT YEARS : 1993-94 & 1994-95 DR. (MRS.) ANWAR BASITH, NO.16, DR. OMAR SHARIFF ROAD, BASAVANGUDI, BENGALURU 560 004. PAN: ABXPB 1914E VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5(2)(1) [FORMERLY 3(1)], BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI K.Y. NINGOJI RAO, CA RESPONDENT BY : SMT. SWAPNA DAS, JT.CIT(DR)(ITAT)-2, BENGALURU DATE OF HEARING : 17.05.2017 DATE OF PRONOUNCEMENT : 26.05.2017 O R D E R THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAIN ST THE ORDER OF CIT(APPEALS) INTER ALIA ON COMMON GROUNDS AND THEREFORE THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROU GH THIS CONSOLIDATED ORDER. THOUGH GROUNDS OF APPEAL ARE COMMON IN THES E APPEALS, I EXTRACT THE GROUNDS OF APPEAL RAISED IN THE APPEAL ITA NO.4 95/BANG/2017 HEREUNDER:- ~. THAT THE IMPUGNED ORDER OF ASSESSMENT MADE BY THE RESPONDENT IS LIABLE TO SET ASIDE IN SO FAR AS THE IMPUGNED ORDER ITA NOS.495 & 496/BANG/2017 PAGE 2 OF 11 MADE BY THE RESPONDENT OFFICER IS IRREGULAR, INCORR ECT, IMPROPER, UNLAWFUL AND IS OPPOSED TO FACTS OF THE CASE AND LA W. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN UPHOLDING THE VALIDITY OF THE IMPUGNED PRO CEEDINGS BY THE RESPONDENT ASSESSING OFFICER U/S 147 OF THE ACT BY ISSUE OF THE NOTICE U/S 148 DISREGARDING THE FACT THAT THE A PPELLANT HAD VOLUNTARILY FILED THE RETURN OF INCOME ON 18.9.1995 . 3. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE DR. NAYEEMA KHAN TRUST HAD INCOME ASSESSABLE IN THE A.Y .1993-94 AS PER THE FINDINGS MADE PURSUANT TO THE DIRECTION OF THE HON'BLE HIGH COURT OF KARNATAKA AND THAT SUCH INCOME IS LIA BLE TO BE ADDED TO THE TOTAL INCOME OF THE APPELLANT U/S 64(1 )(A) OF THE INCOME TAX ACT, 1961. 4. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE DR. NAYEEMA KHAN TRUST HAD INCOME OF RS.5,47,561/- WHIC H IS ASSESSABLE IN THE A.Y.1993-94 DISREGARDING THE PROV ISIONS OF SECTION 5 R.W.S. 145 (1) OF THE INCOME TAX ACT, 19 61. 5. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING TH E ADDITION OF RS.3,65,040/- MADE BY THE RESPONDENT OF FICER TO THE TOTAL INCOME OF THE APPELLANT U/S 64 (L)(A) OF THE INCOME TAX ACT, 1961 WHEN IN FACT THE PROVISIONS OF SECTION 64 HAS NO APPLICATION IN THE INSTANT CASE. 6. THE LEARNED CIT (APPEALS) ERRED IN MAKING A FIN DING THAT CLAIM OF THE APPELLANT THAT DR. NAYEEMA KHANUM TRUS T DID NOT RECEIVE THE INTEREST FROM THE CO-OWNERS SEEKS TO NU LLIFY THE DIRECTIONS GIVEN BY THE HON'BLE HIGH COURT BY MISS CONSTRUING THE PROVISIONS OF SECTIONS 5, 145, 64, 160 (L)(IV), 161(1) AND OTHER RELATED PROVISIONS OF THE INCOME TAX ACT, 1961. 7. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE INCOME, IF ANY, OF DR. NAYEEMA KHAN TRUST WHICH IS ASSESSABLE IN THE A.Y.1993-94 IPSO FACTO BECOMES THE INCOME TA XABLE IN THE HANDS OF THE BENEFICIARIES WHICH IN TURN IS LIABLE TO ADDITION TO THE TOTAL INCOME OF THE PARENTS OF MINOR BENEFICIARIES U/S 64(1)(A) OF THE ACT WITH COMPLETE DISREGARD TO THE PROVISIONS S ECTION 160(1)(IV) RWS 161(1) OF THE INCOME TAX ACT,1961. 8. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING TH E INTEREST OF RS.1,19,230/- LEVIED BY THE RESPONDENT U/S 234A OF THE ACT. ITA NOS.495 & 496/BANG/2017 PAGE 3 OF 11 9. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING TH E INTEREST OF RS.1,58,973/- LEVIED BY THE RESPONDENT U/S 234B OF THE ACT. 10. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING T HE INTEREST OF RS.1,804/- LEVIED BY THE RESPONDENT U/S 234C OF THE ACT. 2. THE FACTS IN BRIEF RELATING TO THE IMPUGNED ISSU ES ARE THAT ASSESSEE HAS FILED A RETURN OF INCOME DECLARING INCOME OF RS .1,84,950. DURING THE COURSE OF SCRUTINY, THE AO HAS NOTED THAT ASSESSEE HAS CONSTRUCTED A BUILDING IN 1989 FOR WHICH FUND HAD BEEN RECEIVED F ROM A FIRM CALLED M/S. INJ ENTERPRISES IN WHICH THE ASSESSEE IS A PARTNER ALONG WITH HER HUSBAND, MR. MAQSOOD AHMED. THE CHILDREN OF THE PARTNERS VI Z., MASTER MOHAMED IQBAL, MS. NADIA AHMED AND MASTER MOHAMED JESIM HAV E BEEN ADMITTED TO THE BENEFITS OF PARTNERSHIP. IT WAS ALSO PROVID ED IN THE PARTNERSHIP DEED THAT BENEFITS OF PARTNERSHIP SHALL BE DISTRIBUTED A MONG THE PARTNERS AND 3 BENEFICIARIES IN EQUAL SHARES OF 1/5 TH OF THE PROFIT OF THE FIRM. THE PARTNERSHIP FIRM WAS DISSOLVED ON 11.07.1989 AND IT WAS PROVIDED THAT ALL THE 5 PARTNERS WOULD POSSESS THE ASSET AND THE LIAB ILITY OF THE FIRM AS CO- OWNERS AND TENANTS IN COMMON AND HAVE EQUAL SHARES IN LAND & BUILDING. ONE OF THE SOURCE OF FUNDS USED BY M/S. INJ ENTERPR ISES FOR CONSTRUCTION AND DEVELOPMENT OF THE AFORESAID PROPERTY WAS A LOA N OF RS.14,28,280 RECEIVED FROM DR. NAYEEMA KHAN TRUST FORMED BY ASSE SSEE AND HER HUSBAND, MR. MAQSOOD AHMED AS A TRUSTEE AND THEIR C HILDREN AS BENEFICIARIES OF THE TRUST. ITA NOS.495 & 496/BANG/2017 PAGE 4 OF 11 3. THE AO HAS NOTED THAT ASSESSEE HAS DEDUCTED INTE REST PAID TO DR. NAYEEMA KHAN TRUST FOR COMPUTING THE INCOME FROM PR OPERTY AT 29, CUNNINGHAM ROAD. THE INCOME WAS REDUCED ON ACCOUNT OF INTEREST ON PRINCIPAL AND COMPOUNDED AT THE ACCUMULATED FIGURE OF LOAN AMOUNT FROM DR. NAYEEMA KHAN TRUST. THE AO FURTHER NOTED THAT DR. NAYEEMA KHAN TRUST HAD FILED RETURN OF INCOME FOR THE AYS 1990-9 1 & 1991-92 ON ACCOUNT OF INTEREST RECEIVED FROM INJ ENTERPRISES, BUT RETU RN WAS NOT FILED FOR SUBSEQUENT YEARS AS NO INTEREST INCOME WAS RECEIVED BY THE TRUST. 4. THE AO FURTHER NOTED THAT THE INTEREST AMOUNT SP ECIFICALLY PERTAINED TO DIFFERENT BENEFICIARIES AS DEFINED IN THE TRUST DEED WAS TO BE APPORTIONED EQUALLY 1/3 RD AMONG THE 3 BENEFICIARIES. THEREFORE, INCOME RELA TING TO MINOR BENEFICIARIES WAS TO BE ADDED TO THE INCOME O F APPELLANT U/S. 64(1)(A) OF THE ACT. ACCORDINGLY, OUT OF INTEREST INCOME OF RS.5,47,561 DEDUCTED FROM THE PROPERTY INCOME, ADDITION OF RS.3 ,65,040 WAS MADE TOWARDS SHARE OF MINOR CHILDREN OF APPELLANT AS TWO BENEFICIARIES OUT OF 3 WERE MINORS DURING THE RELEVANT PREVIOUS YEAR. 5. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( APPEALS) AGAINST THE ASSESSMENT ORDER, BUT DID NOT FIND FAVOUR WITH HIM AND AGAIN APPEAL WAS FILED BEFORE THE TRIBUNAL AND THE TRIBUNAL HAS HELD THAT THE ARRANGEMENT AMOUNTED TO PAYMENT AND RECEIPT OF AMOUNT BY THE SA ME PERSON IN DIFFERENT CAPACITIES. IT WAS FURTHER HELD THAT INT EREST EXPENSES IN THE HANDS OF APPELLANT WAS TO BE TREATED AS PAID TO THE TRUST EE OR TO HERSELF AND ITA NOS.495 & 496/BANG/2017 PAGE 5 OF 11 INCOME ACCRUED TO THE MINOR CHILDREN WAS TO BE CLUB BED U/S. 64(1)(A) OF THE ACT. 6. AGGRIEVED, AN APPEAL WAS PREFERRED TO THE HONBL E HIGH COURT OF KARNATAKA AND THE HONBLE HIGH COURT VIDE ORDER DAT ED 17.03.2010 HAVE RESTORED THE MATTER TO THE ASSESSING OFFICER FOR FU RTHER VERIFICATION. THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT ARE EXTRACTED HEREUNDER:- HAVING HEARD THE LEARNED COUNSEL FOR THE PARTIES, WE ARE ALSO OF THE OPINION THAT IF THE TRUST IS MAINTAININ G THE CASH SYSTEM OF ACCOUNTING, AND IF THE ASSESSEE HAD MADE PROVISIONS FOR PAYMENT OF INTEREST IN THE RETURN FILED BY HER, AND IF THE INTEREST PAID BY THE ASSESSEE IS TAKEN INTO ACCOUNT OF THE TRUST, IN THE NEXT ASSESSMENT YEAR OR IN SUBSEQUENT YEARS, IT IS FOR THE REVENUE TO COMPARE BOTH THE ACCOUNTS AND PASS APPRO PRIATE ORDER, IN ORDER TO FIND OUT WHETHER THE INTEREST SH OWN IN THE RETURN OF INCOME IS REFLECTED IN THE ACCOUNTS OF THE TRUST . 7. ACCORDINGLY, THE MATTER WAS REMANDED BACK TO THE AO AND HE HAS CALLED FOR THE DETAILS OF INTEREST CLAIMED IN THE C ASE OF CO-OWNERS OF THE PROPERTY AND THE INTEREST REFLECTED IN THE ACCOUNT OF DR. NAYEEMA KHAN TRUST. THE AO HAVING EXAMINED THE DETAILS HAS CONC LUDED THAT INTEREST CLAIMED BY THE CO-OWNERS OF THE PROPERTY AND DEDUCT ION ON ACCOUNT OF INTEREST PAYABLE TO DR. NAYEEMA KHAN TRUST HAD NOT BEEN ADMITTED IN THE HANDS OF DR. NAYEEMA KHAN TRUST IN AYS 1993-94 & 19 94-95. ACCORDINGLY, ADDITION OF RS.3,65,040 BEING THE INTEREST INCOME R ELATING TO MINOR BENEFICIARIES OF DR. NAYEEMA KHAN TRUST WAS ADDED T O APPELLANTS INCOME. ITA NOS.495 & 496/BANG/2017 PAGE 6 OF 11 8. THEREAFTER, THE APPELLANT HAS FILED APPEALS BEFO RE THE CIT(APPEALS) DISPUTING THE ADDITIONS AND THE CIT(APPEALS) FURTHE R RE-EXAMINED THE CLAIM OF ASSESSEE IN THE LIGHT OF DIRECTIONS OF THE HONB LE HIGH COURT AND CONFIRMED THE ADDITIONS. THE RELEVANT OBSERVATIONS OF THE CIT(APPEALS) IS EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- THE UNDISPUTED FACTS ARE THAT TWO BENEFICIARIES OUT OF THE THREE IN DR. NAYEEMA KHAN TRUST WERE MINORS. ALL TH E THREE BENEFICIARIES OF THE TRUST WERE THE CHILDREN OF THE APPELLANT. THE INCOME IN THE HANDS OF THE DR. NAYEEMA KHAN TRUST W AS ASSESSABLE IN THE ASSESSMENT YEAR 1993-94 AS PER TH E FINDINGS MADE PURSUANT TO THE DIRECTION OF THE HON'BLE HIGH COURT OF KARNATAKA. THEREFORE, THERE IS NO BASIS FOR THE CON TENTION THAT INCOME OF MINOR CHILDREN SHOULD NOT HAVE BEEN ADDED TO THE INCOME OF THE APPELLANT. IN THE WRITTEN SUBMISSION, THE APPELLANT HAS RELI ED IN THIS REGARD ON SEVERAL JUDICIAL DECISIONS INCLUDING THE FOLLOWING: (A) MANILAL DHANJI V. CIT[1962] 44 ITR 876 (SC) (B) YOGINDRAPRASAD N. MAFATLAL V CIT [1977] 109 ITR 602 (BOM) (C) CIT V D.V. NARASIMHAN [1992]196 ITR 499 (KAR) IN THE CASE OF CIT V MANILAL DHANJI(SUPRA), THE A SSESSEE HAD SET UP A TRUST IN RESPECT OF RS. 25,000/- OF WH ICH THE TRUSTEES INCLUDED HIS WIFE, HIS BROTHER AND HIMSELF. THE S CHEME OF THE TRUST DEED PROVIDED THAT INTEREST ON THE SUM OF RS. 25,000/- SHOULD BE ACCUMULATED AND ADDED TO THE CORPUS. ON A TTAINING THE AGE OF 18 YEARS BY THE ASSESSEE'S DAUGHTER, THE COR PUS AS INCREASED BY THE ADDITION OF INTEREST WAS TO BE HAN DED OVER TO HER. IN THIS CASE, INTERPRETATION OF CLAUSE (B) OF SECTI ON 16(3) OF THE INCOME-TAX ACT OF 1922 WAS INVOLVED. THE HON'BLE AP EX COURT HELD THAT SECTION 64 OF THE INCOME TAX ACT OF 1961 COULD NOT BE TAKEN AS DECLARATORY OF THE PREVIOUS LAW AND CORRES PONDING SECTION 64(V) OF THE INCOME TAX ACT OF 1961 COULD N OT BE TAKEN AS DETERMINATIVE OF THE SCOPE AND EFFECT OF CLAUSE (B) OF SECTION 16(3) OF THE INCOME-TAX ACT OF 1922. THEREFORE, IT WOULD NOT BE CORRECT TO APPLY THE RATIO OF THIS CASE TO A TAXING ISSUE COVERED UNDER THE INCOME TAX ACT OF 1961. ITA NOS.495 & 496/BANG/2017 PAGE 7 OF 11 IN YOGINDRAPRASAD N. MAFATLAL V CIT(SUPRA), THE A SSESSEE, AN INDIVIDUAL, CREATED THREE SEPARATE TRUSTS BY THR EE DEEDS EXECUTED BY HIM ON THE SAME DAY IN FAVOUR OF HIS TH REE MINOR DAUGHTERS. IN THE RELEVANT ACCOUNTING YEAR, ALL THE THREE DAUGHTERS WERE MINORS AND UNMARRIED. THE TRUSTEES TO WHOM THE SHARES CONSTITUTING THE TRUST FUND WERE TRANSFERRED UNDER THE THREE TRUSTS WERE THREE DIFFERENT PERSONS. IT WAS CLEAR THAT UND ER THE SCHEME OF THREE TRUST DEEDS, THE TRUSTEES WERE ENJOINED UPON TO HOLD THE TRUST FUND UNDER EACH OF THE DEEDS SO AS TO ACCUMULATE TH E ACCRUING INCOME AND ADD THE SAME TO THE CORPUS OF THE TRUST FUND TILL THE ELDEST DAUGHTER ATTAINED MAJORITY; IN OTHER WORDS, NONE OF THE DAUGHTERS, NOT EVEN ELDEST DAUGHTER WOULD HAVE ANY BENEFICIAL INTEREST IN THE INCOME OF THE TRUST FUND RIGHT UP T O THE TIME SHE ATTAINED MAJORITY AND DURING THAT PERIOD THE ACCRUI NG INCOME HAD TO THE ACCUMULATED AND ADDED ON TO THE CORPUS OF TH E TRUST FUND. THE SCHEME OF THE TRUST DEEDS, THEREFORE, APPEARED TO BE THAT SO LONG AS ALL THE THREE DAUGHTERS WERE MINORS, THE IN COME UNDER EACH OF THE DEEDS WAS ACCUMULATED FOR THE BENEFIT O F THE PRINCIPAL OF BENEFICIARY CONCERNED WHEN SHE ATTAINED MAJORITY . THE COURT HELD THAT THE INSTANT CASE WAS A CASE OF A SINGLE T RANSFER OF INTEREST TO MINOR DAUGHTERS UPON CONDITION OF THEIR ATTAININ G THE AGE OF MAJORITY AND THE CASE DID NOT COME WITHIN THE EXCEP TION TO SECTION 21 OF THE TRANSFER OF PROPERTY ACT, WITH TH E RESULT THAT INTEREST CREATED BY THE SETTLOR UNDER THE THREE TRU ST DEEDS IN THE INSTANT CASE WOULD HAVE TO BE REGARDED AS CONTINGEN T DEPENDING UPON HAPPENING OF PARTICULAR EVENT, VIZ., ATTAINING THE AGE OF MAJORITY BY THE THREE DAUGHTERS. IF THAT BE SO, THE ITEM OF INCOME WHICH AROSE DURING THE YEAR OF ACCOUNT IN INSTANT C ASE COULD NOT BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE AS SECTION 64(V) WOULD BE CLEARLY INAPPLICABLE. THIS CASE IS DISTING UISHABLE FROM THE PRESENT CASE AS IN THE PRESENT CASE THERE WAS N O SUCH PROVISION FOR OBLIGATORY ACCUMULATION TILL MAJORITY OF THE BENEFICIARIES. IT WAS LEFT TO THE DISCRETION OF THE TRUSTEES WHETHER TO ADD ENTIRE INCOME OF A YEAR TO THE CORPUS OR TO SPEND ANY PART OF THE INCOME FOR THE WELFARE OF THE BENEFICIARIES SUCH AS EDUCATION AND GENERAL WELFARE OF THE BENEFICIARIES IN THE RATIO SPECIFIED UNDER THE TRUST. IN CIT V D.V. NARASIMHAN [1992] 196 ITR 499 (KAR) , THE ISSUE OF DEFERRED BENEFIT OF A BENEFICIARY OF A TRU ST WAS INVOLVED. THE HON'BLE COURT HELD THAT IT WAS NOT A CASE OF A DEFERRED BENEFIT FOR A MINOR CHILD BUT A CASE OF A DEFERRED BENEFIT FOR A PERSON WHO BECAME A MAJOR SUBSEQUENTLY. UNDER THESE CIRCUMSTAN CES, IT WAS ITA NOS.495 & 496/BANG/2017 PAGE 8 OF 11 HELD THAT SECTION 64(1) WAS NOT ATTRACTED. AS NOTED ABOVE, THE PRESENT CASE DID NOT INVOLVE COMPULSORY ACCUMULATIO N OF THE INCOME OF A YEAR TILL THE AGE OF MAJORITY OF THE BE NEFICIARIES, THE RATIO DOES NOT APPLY TO THE PRESENT CASE. 10. THE APPELLANT HAS IN WRITTEN SUBMISSIONS DATED 06.12.2016, IT HAS BEEN SUBMITTED THAT SHE WAS AGRE EABLE TO AN ADDITION OF RS, 1,99,360/- IN ASSESSMENT YEARS 1993 -94 AND 1994-95 OR BUYING PEACE AND IN CONSONANCE WITH THE ASSESSMENT FOR ASSESSMENT YEARS 1995-96 TO 2004-05 WHEREIN ASS ESSMENTS WERE MADE IN THE CASE OF DR. NAYEEMA KHAN TRUST IN RESPECT OF THE INCOME OF BENEFICIARIES, EACH OF WHOM WAS ASSES SED AT RS. 99,980/- THE ASSESSMENTS HAVE BECOME FINAL AS THESE HAVE NOT BEEN CHALLENGED BY THE TRUSTEES IN APPEAL. IT HAS B EEN STATED THAT THE SIMPLE INTEREST OF RS. 2,99,940/- WAS INCOME CO MPUTED AT THE RATE OF 21% ON RS. 14,28,280/- RECEIVED FROM DR. NA YEEMA KHAN TRUST. ACCORDINGLY, THE INCOME RELATING TO TWO MINO R BENEFICIARIES AMOUNTED TO RS. 1,99,360/-. AS PER THE FACTS ON RECORD, INTEREST EXPENDITURE OF RS. 5,47,561/- HAD BEEN CLAIMED IN THE CASE OF RETURN O F INCOME OF THE CO-OWNERS OF THE PROPERTY DURING THE RELEVANT PREVI OUS YEAR. THE SAME AMOUNT HAS BEEN TAKEN AS BASIS FOR COMPUTING I NCOME IN THE HANDS OF THE BENEFICIARIES HAVING 1/3RD SHARE EACH. OUT OF IT, THE TWO BENEFICIARIES WERE MINORS AND THEREFORE THE ASS ESSING OFFICER HAS ARRIVED AT AN INCOME OF RS. 3,65,040/- AS INCOM E INCLUDABLE UNDER SECTION 64(1A) OF THE ACT. AS THE INCOME OF T HE TRUST DEPENDS ON THE CLAIM OF EXPENDITURE MADE BY THE CO- OWNERS, THE WORKING OF ASSESSING OFFICER IN THE ASSESSMENT ORDE R IS FAIR AND REASONABLE. IN VIEW OF THE FORGOING DISCUSSION, IT IS HELD TH AT THE ACTION OF ASSESSING OFFICER IN CLUBBING THE INCOME OF RS. 3,65,040/- BEING THE INTEREST PAYABLE TO DR. NAYEEMA KHAN TRUS T AND RELATING TO THE MINOR BENEFICIARIES WAS CORRECT IN ACCORDANCE WITH SECTION 64(1A) OF THE ACT. 11. IN GROUND NO.4, IT HAS BEEN CONTENDED THAT THE TRUST HAS NOT RECEIVED ANY INCOME WHICH ACCRUED FOR THE BENEF IT OF THE MINORS AND WHICH IN TURN COULD HAVE ATTRACTED SECTI ON 64(LA) OF THE ACT. ITA NOS.495 & 496/BANG/2017 PAGE 9 OF 11 12. THE ISSUE HAS ALREADY BEEN CONSIDERED BY VARIO US AUTHORITIES UP TO THE HIGH COURT IN THE PREVIOUS RO UND OF PROCEEDINGS. IT WAS IN THIS CONTEXT, THE HON'BLE HI GH COURT OF KARNATAKA IN ORDER DATED 17.03.2010 HAD DIRECTED TH E ASSESSING OFFICER TO COMPARE THE INTEREST PAID BY THE APPELLA NT WITH THE INTEREST INCOME REFLECTED IN THE ACCOUNTS OF DR. NA YEEMA KHAN TRUST AND COMPLETE THE ASSESSMENT ACCORDINGLY. THE PRESENT ASSESSMENT ORDER HAS BEEN FRAMED IN ACCORDANCE WITH THE DIRECTIONS OF THE HON'BLE COURT AS DISCUSSED ABOVE. THE ISSUE RAISED IN THE PRESENT GROUND THAT INTEREST HAD NOT BEEN RECEIVED BY THE TRUST SEEKS TO NULLIFY THE DIRECTIONS GIVEN BY THE HON'BLE HIGH COURT. IT IS HELD THAT THERE IS NO SUBSTANCE I N THE GROUND NO.4 OF APPEAL RAISED BY THE APPELLANT AND THE SAME IS N OT ALLOWED. 9. AGGRIEVED, THE ASSESSEE HAS PREFERRED APPEALS BE FORE THE TRIBUNAL AND DURING THE COURSE OF HEARING, HE COULD NOT ESTA BLISH THAT THE RECIPIENT I.E., TRUST HAS EVER OFFERED THE RECEIPT OF INTERES T TO TAX. THIS ISSUE WAS THOROUGHLY EXAMINED BY THE TRIBUNAL AND THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT HAS REMANDED THE MATTER BACK TO THE AO WITH A DIRECTION THAT IF THE ASSESSEE HAS MADE PROVISION F OR PAYMENT OF INTEREST IN THE RETURN FILED BY HER AND IF THE INTEREST PAID BY THE ASSESSEE IS TAKEN INTO ACCOUNT OF THE TRUST IN THE NEXT ASSESSMENT YEAR OR IN SUBSEQUENT YEARS, IT IS FOR THE REVENUE TO COMPARE BOTH THE ACCOUNTS AND PASS APPROPRIATE ORDER IN ORDER TO FIND OUT WHETHER THE INTEREST SHO WN IN THE RETURN OF INCOME IS REFLECTED IN THE ACCOUNTS OF THE TRUST. 10. DESPITE CLEAR DIRECTIONS OF THE HONBLE HIGH CO URT, THE ASSESSEE COULD NOT PLACE THE RELEVANT EVIDENCE IN THIS REGAR D. THE SCOPE OF ENQUIRY WAS LIMITED AS IT HAS TO BE DONE AS PER THE DIRECTI ONS OF THE HONBLE HIGH ITA NOS.495 & 496/BANG/2017 PAGE 10 OF 11 COURT. SINCE THE ASSESSEE COULD NOT PLACE ANY RELE VANT EVIDENCE WITH REGARD TO TAKING INTO ACCOUNT THE INTEREST RECEIVED BY THE TRUST FROM THE ASSESSEE WHILE COMPUTING ITS INCOME, THE AO HAS RIG HTLY DISALLOWED THE CLAIM OF THE ASSESSEE AND THE CIT(APPEALS) CONFIRME D THE SAME. SINCE I DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(APPEA LS), I CONFIRM THE ADDITIONS. 11. THE ISSUE WITH REGARD TO REOPENING OF ASSESSMEN T WAS ALREADY EXAMINED IN THE FIRST ROUND OF APPEAL AND IN THE SE COND ROUND OF APPEAL ONLY ON ACCOUNT OF DIRECTIONS OF THE HONBLE HIGH C OURT. AS NO SUCH DIRECTION WAS ISSUED IN THIS REGARD, THE LOWER AUTH ORITIES HAVE NOT ADJUDICATED THE ISSUE OF REASSESSMENT AFRESH. I T HEREFORE FIND NO MERIT IN THIS GROUND AND REJECT THE SAME. 12. IN THE RESULT, THE APPEALS OF ASSESSEE ARE DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF MAY, 2017. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 26 TH MAY, 2017. / D ESAI S MURTHY / ITA NOS.495 & 496/BANG/2017 PAGE 11 OF 11 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.