M/S SHREE RAM EDUCATION SOCIETY, ALWAR V. INCOME TAX OFFICER, WARD-EXEMPTION, ALWAR

ITA 605/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3945 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 02-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12AA; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 605/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 M/S SHREE RAM EDUCATION SOCIETY, NEAR AMBEDKAR CIRCLE, ALWAR CUKE VS. INCOME TAX OFFICER, WARD EXEMPTION, ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACAS2090P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJENDRA JHA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 08/08/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 09/08/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)- 22, ALWAR DATED 13.03.2018 FOR ASSESSMENT YEAR 2013 -14 WHEREIN THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 5,58,02 7/- MADE BY THE ASSESSING OFFICER 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE TRUST IS HAVING REGISTRATION U/S 12AA OF THE IT ACT, 1961 AS WELL A S APPROVAL GRANTED U/S 10(23C)(VI) OF THE ACT. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE AO OBSERVED THAT IN THE LEDGER ACCOUNT, A TRANSACTION HAS BEEN MENTIONED AS RAJ FABRICATION LOAN SHOWING PAYMENT OF RS 5 LACS AS MADE ON 18.04.2012. THE AO FURTHER STATED THAT THE PAYMENT HAS NOT BEEN MADE AGAINST ANY MATERIAL RECEIVED/SERVICES RENDERED BUT TO ACCOMMOD ATE THE RELATED PARTY AT ITA NO. 605/JP/2018 M/S SHREE RAM EDUCATION SOCIETY, ALWAR VS ITO, ALWAR 2 THE COST OF TRUST MONEY. THE ASSESSING OFFICER HA S STATED THAT THE SAID PAYMENT HAS BEEN MADE IN VIOLATION OF PROVISIONS OF SECTION 11(5) R/W SECTION 13(1)(D) OF THE ACT. HENCE, THE SAME WAS ADDED TO T HE TOTAL INCOME OF THE ASSESSEE. 3. ON APPEAL, THE SAID ADDITION HAS BEEN CONFIRMED BY THE LD. CIT(A) STATING THAT THE APPELLANT HAS NOT FILED ANY EVIDEN CE ABOUT THE NATURE OF MONEY AND REQUIRED SERVICES TO BE RENDERED BY M/S R AJ FABRICATORS. NO CONFIRMATION HAS BEEN FILED FROM M/S RAJ FABRICATOR S NOR ANY COPY OF AGREEMENT FOR SERVICES TO BE RENDERED BY IT. HE ACC ORDINGLY CONFIRMED THE ACTION OF THE AO IN TREATING THE MONEY ADVANCED AS LOAN/DEPOSITS AND ADDED IT UNDER SECTION 11(5) READ WITH SECTION 13(1)(D) O F THE ACT. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 4. DURING THE COURSE OF HEARING, THE LD AR SUBMITT ED THAT ADVANCE TO M/S RAJ FABRICATORS AGAINST SUPPLY OF GOODS CANNOT BE T ERMED AS INVESTING OR DEPOSITING THE MONEY BY THE ASSESSEE TRUST. IT IS A TRANSACTION WHERE THE ASSESSEE TRUST HAS SOUGHT THE SERVICES OF M/S RAJ F ABRICATORS AND FOR THE PURPOSES, AN ADVANCE OF RS. 5,00,000/- WAS PAID TO IT. IT WAS SUBMITTED THAT THE INTENTION OF MAKING THE PAYMENT IS NOT EARNING OF ANY INCOME BY WAY OF INTEREST RATHER THE INTENTION WAS TO AVAIL CERTAIN SERVICES. MERELY BECAUSE THE RECIPIENT OF PAYMENT HAS NOT DISCHARGED HIS OBLIGAT ION AND HAS NOT RETURNED THE MONEY SO ADVANCED EARLIER, THE NATURE OF THE PA YMENT CANNOT BE ALTERED. FURTHER, THE LD. AR HAS CONTENDED THAT THOUGH THE P AYMENT HAS BEEN MADE DURING THE YEAR UNDER CONSIDERATION, HOWEVER, THE S AME HAS NOT BEEN CLAIMED AS AN APPLICATION OF INCOME AND THEREFORE WITHOUT C LAIMING THE PAYMENT AS AN APPLICATION OF INCOME, THERE IS NO BASIS FOR DISALL OWING THE SAID PAYMENT. 5. THE LD DR IS HEARD WHO HAS RELIED ON THE FINDING S OF THE LOWER AUTHORITIES. ITA NO. 605/JP/2018 M/S SHREE RAM EDUCATION SOCIETY, ALWAR VS ITO, ALWAR 3 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR HAS CONTENDED THAT THE ASSESS EE TRUST HAS SOUGHT THE SERVICES OF M/S RAJ FABRICATORS AND FOR THE PURPOSE S, AN ADVANCE OF RS. 5,00,000/- WAS PAID TO IT. IT WAS SUBMITTED THAT TH E INTENTION OF MAKING THE PAYMENT IS NOT EARNING OF ANY INCOME BY WAY OF INTE REST RATHER THE INTENTION WAS TO AVAIL CERTAIN SERVICES. MERELY BECAUSE THE R ECIPIENT OF PAYMENT HAS NOT DISCHARGED HIS OBLIGATION AND HAS NOT RETURNED THE MONEY SO ADVANCED EARLIER, THE NATURE OF THE PAYMENT CANNOT BE ALTERE D TO LOAN/DEPOSIT. IN ORDER TO DETERMINE THE TRUE NATURE OF THE TRANSACTION AND THE PAYMENT SO MADE BY THE ASSESSEE TRUST, WHAT IS RELEVANT IS THE TRANSAC TION DOCUMENT/AGREEMENT/UNDERSTANDING UNDER WHICH THE SA ID PAYMENT HAS BEEN MADE. NOTHING HAS BEEN BROUGHT ON RECORD IN THIS R EGARD EITHER BEFORE THE LOWER AUTHORITIES OR EVEN DURING THE CURRENT PROCEE DINGS. MERE CONTENTION HOWSOEVER STRONG IT MAY BE BUT IF THE SAME IS NOT S UPPORTED BY VERIFIABLE DOCUMENTARY EVIDENCE, IT IS DIFFICULT TO ACCEPT THE SAME. FURTHER, THE TREATMENT OF THE TRANSACTION IN THE ASSESSEES BOOK S OF ACCOUNTS ALSO SHOWS THE SAID TRANSACTION AS IN THE NATURE OF LOAN WHICH SUPPORTS THE CASE OF THE REVENUE RATHER THAN THE ASSESSEE TRUST. THEREFORE, THE PAYMENT OF RS 5 LACS HAS BEEN RIGHTLY HELD AS AMOUNT INVESTED/ DEPOSITED WITH M/S RAJ FABRICATION MADE IN VIOLATION OF SECTION 11 (5) OF THE ACT. 7. REGARDING THE OTHER CONTENTION OF THE LD AR THAT THOUGH THE PAYMENT HAS BEEN MADE DURING THE YEAR UNDER CONSIDERATION, HOWEVER, THE SAME HAS NOT BEEN CLAIMED AS AN APPLICATION OF INCOME AND TH EREFORE WITHOUT CLAIMING THE PAYMENT AS AN APPLICATION OF INCOME, THERE IS N O BASIS FOR DISALLOWING THE SAID PAYMENT. IN OUR VIEW, EVEN WHERE THE PAYMENT H AS NOT BEEN CLAIMED AS AN APPLICATION OF INCOME FOR THE YEAR UNDER CONSIDE RATION, GIVEN THAT THE PAYMENT IS MADE IN VIOLATION OF SECTION 11(5) OF TH E ACT, IT WOULD STILL NOT BE COUNTED AS PART OF APPLICATION OF INCOME IN THE SUB SEQUENT YEARS. HOWEVER, FOR THE YEAR UNDER CONSIDERATION WHERE THE PAYMENT HAS NOT BEEN CLAIMED AS ITA NO. 605/JP/2018 M/S SHREE RAM EDUCATION SOCIETY, ALWAR VS ITO, ALWAR 4 AN APPLICATION OF INCOME, THERE SEEMS TO BE NO BASI S FOR DISALLOWING THE SAME. THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE AO FOR THE LIMITED PURPOSES OF EXAMINING WHETHER THE PAYMENT OF RS 5 L ACS MADE TO M/S RAJ FABRICATORS HAS BEEN CLAIMED AS AN APPLICATION OF I NCOME OR NOT. WHERE IT IS SO DETERMINED BY THE AO THAT THE PAYMENT HAS NOT BE EN CLAIMED AS AN APPLICATION OF INCOME, THE AO IS DIRECTED TO DELETE THE ADDITION SO MADE BY HIM. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPOS ED OFF WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 09/08/2018 *GANESH KR VKNS'K DH IZFRFYFI VXZSF'KR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - M/S SHREE RAM EDUCATION SOCIETY, ALWAR 2. IZR;FKHZ@ THE RESPONDENT - ITO, WARD EXEMPTION, ALWAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 605/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.