BAHADURLAL AMRITLAL JAIN CHARITABLE TRUST, MUMBAI V. ITO (EXEMPTION) - 1(1), MUMBAI

ITA 5080/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5641 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: S M BANDI
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & AMARJIT SINGH (JM) I.T.A. NO. 5080 /MUM /20 1 6 (ASSESSMENT YEAR 20 12 - 13 ) BAHADURLAL AMRITLAL JAIN CHARITABLE TRUST A - 83, SILVER APARTMENTS SHANKAR GHANEKAR MARG DA DAR WEST MUMBAI - 400 028. PAN : AAAJB0006F VS. ITO(EXEMPTION) 1(1) MUMBAI ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI S.M. BANDI DEPARTMENT BY SHRI V. VIDHYADHAR DATE OF HEARING 28 . 6 . 201 8 DATE OF PRONOUNCEMENT 04 . 7 . 201 8 O R D E R PE R B.R. BASKARAN (A M) : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17.6.2016 PASSED BY THE LEARNED CIT(A) - 1, MUMBAI AND IT RELATES TO A.Y. 2012 - 13. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN HOLDING THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION TOWARDS ACCUMULATION OF INCOME MENTIONED IN 11(1)(A) OF THE ACT IN RESPECT OF CAPITAL GAINS ARISING ON SALE OF ASSET. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS A TRUST REGISTERED U/S. 12A O F THE ACT AND ACCORDINGLY CLAIMED EXEMPTION U/S. 11 OF THE ACT. THE MAIN OBJECT OF THE ASSESSEE IS TO PROVIDE EDUCATIONAL AND MEDICAL HELP FOR THE BENEFIT OF THE GENERAL PUBLIC. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE EARNED CAPITAL GAINS OF ` 51 .99 LAKHS ON SALE OF AN ASSET. THE ASSESSEE TREATED THE SAME AS INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. THE PROVISIONS OF SEC. 11(1)(A) PROVIDES FOR ACCUMULATION OF INCOME UPTO 15% OF INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. THE ASSESSEE CL AIMED BAHADURLAL AMARITLAL JAIN CHARITABLE TRUST 2 ACCUMULATION OF INCOME PROVIDED U/S. 11(1)(A) OF THE ACT ON THE ABOVE SAID AMOUNT OF CAPITAL GAINS OF ` 51.99 LAKHS ALSO . 3. THE ASSESSING OFFICER NOTICED THAT THE SEC.11(1A) OF THE ACT PROVIDES DEDUCTION FOR THE CAPITAL GAINS, IF THE CONDITIONS SPECIFIED THEREIN IS SATISFIED. THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF THE CAPITAL GAIN AS PER PROVISIONS OF SECTION 11(1A) OF THE ACT BY FULFILLING THE CONDITIONS SPECIFIED THEREIN. THE ASSESSING O FFICER ALSO NOTICED THAT THE ASSESSE E HAS AVAILED DEDUCTION OF ACCUMULATION OF INCOME U/S 11(1)(A) OF THE ACT ON THE AMOUNT OF CAPITAL GAIN, REFERRED ABOVE. HE TOOK THE VIEW THAT THE ASSESSEE WILL NOT BE ENTITLED TO CLAIM DEDUCTION FOR ACCUMULATION OF INCOME U/S. 11(1)(A) OF THE ACT ON THE CAPITAL GAINS , SINCE CAPITAL GAINS WAS CLAIMED AS DEDUCTION U/S. 11(1A) OF THE ACT. ACCORDINGLY, HE ALLOWED THE CLAIM FOR ACCUMULATION OF INCOME U/S. 11(1)(A) OF THE ACT ON OTHER INCOME OF THE ASSESSEE. THE LEARNED CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4 . THE LEARNED AR SUBMITTED THAT THE ASSESSEE WOULD BE ENTITLED FOR ACCUMULATION OF INCOME U/S. 11(1)(A) OF THE ACT IN RESPECT OF CAPITAL GAINS ALSO , SINCE THE PROVISIONS OF SECTION 11(1A) , ONLY, DEALS WITH THE APPLICATION OF INCOME DERIVED BY WAY OF CAPITAL GAINS. THE PROVISIONS OF SEC. 11(1)(A) DEALING WITH ACCUMULATION OF INCOME , DOES NOT PROHIBIT ACCUMULATION OF INCOME OUT OF CAPITAL GAINS . ACCORDINGLY HE CONTENDED THAT THE ASSESSEE IS ELIGIBLE FOR ACCU MULATION OF INCOME U/S 11(1)(A) OF THE ACT ON THE CAPITAL GAINS PORTION ALSO. 5 . ON THE CONTRARY, LEARNED DR SUBMITTED THAT THE LEARNED CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THE ITAT IN THE CASE OF DAWAT INSTITUTE OF DAWOODI BOHRA COMMUNITY (22 SOT 359) IN DECIDING THE ISSUE AGAINST THE ASSESSEE. 6 . IN THE REJOINDER, LEARNED AR SUBMITTED THAT THE DECISION RENDERED IN THE CASE OF DAWAT INSTITUTE OF DAWOODI BOHRA COMMUNITY (SUPRA) DOES NOT DEAL BAHADURLAL AMARITLAL JAIN CHARITABLE TRUST 3 WITH THE ACCUMULATION OF INCOME ARISING OUT OF SALE OF A SSETS (CAPITAL GAINS) AND HENCE THE LEARNED CIT(A) WAS NOT RIGHT IN LAW IN PLACING RELIANCE ON THE ABOVE SAID DECISION. 7 . WE NOTICED THAT THE LEARNED CIT(A) HAS PLACED RELIANCE ON THE DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF DAWAT INSTITUTE OF D AWOODI BOHRA COMMUNITY (SUPRA) . THE ISSUE BEFORE THE TRIBUNAL IN THE ABOVE SAID CASE WAS RELATING TO ELIGIBILITY OF THE ASSESSEE TO CLAIM ACCUMULATION OF INCOME U/S 11(1)(A) OF THE ACT, WHEN IT HAS APPLIED 100% OF ITS INCOME TOWARDS ITS OBJECTS. HOWEVER, I N THE INSTANT CASE, THE ISSUE IS WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION OF ACCUMULATION OF INCOME U/S. 11(1)(A) OF THE ACT IN RESPECT OF CAPITAL GAINS OR NOT , WHEN IT HAS AVAILED DEDUCTION U/S 11(1A) OF THE ACT . HENCE WE ARE OF THE VIEW THAT TH E ABOVE SAID DECISION MAY NOT BE RELEVANT TO THE ISSUE UNDER CONSIDERATION. IN THIS VIEW OF THE MATER, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE LEARNED CIT(A). ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LEARN ED CIT(A) AND RESTORE THE ABOVE SAID ISSUE TO THE FILE OF THE LEARNED CIT(A) FOR ADJUDICATING IT AFRESH, AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTI CAL PURPOSES. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 4 . 7 .201 8 . SD/ - SD/ - (AMARJIT SINGH ) ( B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 4 / 7 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) BAHADURLAL AMARITLAL JAIN CHARITABLE TRUST 4 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR PRIVATE SECRETARY ) PS ITAT, MUMBAI