ADIT (E), New Delhi V. M/s Helpage India, New Delhi

ITA 6056/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0285 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-03-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 30-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PURI
• Keywords: Benefit of exemption
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.6056/DEL/2010 ASSESSMENT YEAR : 2007-08 ADIT (E), TRUST CIRCLE-II, NEW DELHI. VS. HELPAGE INDIA, C-14, QUTUB INSTITUTIONAL AREA, NEW DELHI. PAN : AAATH0021N (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. SWEETY KOTHARI, CA REVENUE BY : SHRI SANJAY PURI, CIT, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER OF THE CIT (A) DATED 19 TH OCTOBER, 2010 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, TH E LD. CIT (A) ERRED IN ACCEPTING THE ASSESSEES CLAIM O F EXEMPTION U/S 11 & 12 OF THE IT ACT AS THE ASSESSEE IS HOLDING CERTAIN SHARES & SECURITIES WHICH ARE NOT SPEC IFIED SECURITIES WITHIN THE MEANING OF SEC.11(5) OF THE IT AC T, RESULTS IN INFRINGEMENT OF SECTION 13(1)(D)(III) OF THE IT ACT. 2. THE APPELLANT CRAVES TO ADD, TO ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 2. THE IMPUGNED ASSESSMENT IS FRAMED VIDE ORDER DATED 14 TH DECEMBER, 2009 PASSED U/S 143 (3) OF THE INCOME TAX AC T, 1961 (THE ACT). THE RETURN OF INCOME WAS FILED AT NIL CLAIMIN G THE EXEMPTION U/S 11 AND IT HAS BEEN ASSESSED AT AN INCOME OF ` 33,29,10,4 30/-. THE ITA NO.6056/DEL/2010 2 ASSESSING OFFICER, TAKING NOTE OF THE FACTS OF PREVIOUS A SSESSMENTS OF THE ASSESSEE I.E., FOR ASSESSMENT YEAR 2005-06, HAS OBSERVED THAT THE ASSESSEE WAS HOLDING CERTAIN SHARES AND SECURITIES WHICH WER E NOT SPECIFIED SECURITIES WITHIN THE MEANING OF SECTION 11 (5) OF THE ACT AND, THUS, THE INVESTMENT OF THE ASSESSEE WAS AN INFRINGEMENT O F SECTION 13(1)(D)(III) AND, IN THIS MANNER, THE CLAIM OF EXEM PTION U/S 11 AND 12 WAS DENIED TO THE ASSESSEE. AT THE OUTSET, IT WAS CLAIMED BY THE LEARNED AR THAT THE ISSUE IS COVERED BY THE DECISION OF ITAT IN RESPECT OF ASSESSMENT YEAR 2005-06 AND THE RELEVANT PORTION OF THE SAID DECISION HAS BEEN REPRODUCED BY THE CIT (A) IN HIS ORD ER IN PARA NO.3 AND, THUS, RELYING UPON THAT ORDER LEARNED CIT (A) H AS HELD THAT THE ASSESSEE IS ENTITLED TO HAVE THE BENEFIT OF EXEMPTION U/ S 11 SUBJECT TO THE CONDITION THAT INCOME DERIVED FROM THE SHARES, IF TAKEN INTO ACCOUNT IN THE BOOKS, MAY BE BROUGHT TO TAX. THERE CANNOT BE A COMPLETE DENIAL OF EXEMPTION U/S 11(1)(A). IT WAS FU RTHER SUBMITTED THAT THE ORDER PASSED BY THE TRIBUNAL HAS BEEN UPHELD BY THE HONBLE HIGH COURT VIDE THEIR ORDER DATED 13 TH JULY, 2010 IN ITA NO.828 OF 2009. A COPY OF THE SAID ORDER IS FILED AT PAGES 20-29 OF TH E PAPER BOOK WHEREBY THE APPEAL OF THE DEPARTMENT AGAINST THE ORD ER OF THE TRIBUNAL WAS DISMISSED. THUS, IT WAS CLAIMED THAT THE ISSU E IS SQUARELY COVERED BY THE AFOREMENTIONED DECISION OF THE TRIBUN AL AND HONBLE JURISDICTIONAL HIGH COURT AND, THEREFORE, THE ORDER OF THE CIT (A) SHOULD BE UPHELD. 3. HOWEVER, LEARNED DR, RELYING UPON THE ORDER OF T HE ASSESSING OFFICER, HAS SUBMITTED THAT THE CLAIM OF EXEMPTION U/ S 11 HAS RIGHTLY BEEN DENIED TO THE ASSESSEE. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE COPY OF THE TRIB UNAL ORDER FOR ASSESSMENT YEAR 2005-06 HAS BEEN PLACED BY THE ASSESSEE IN T HE ITA NO.6056/DEL/2010 3 PAPER BOOK AT PAGES 13-19, THE RELEVANT OBSERVATIONS R ELYING UPON WHICH THE REQUISITE RELIEF HAS BEEN GIVEN BY CIT (A) ARE FOUND IN PARA 6 WHICH READ AS UNDER:- 6. WE HAVE CONSIDERED THE FACTS OF THE CASE AND RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSEE RECEIVED CERTAI N SHARES AND BONDS OF SMALL VALUES, WHICH STATEDLY CAME INTO ITS POSSESSION ON ACCOUNT OF DEATH OF THE INMATES. SINCE TH ERE WAS NO MANIFEST TRANSFER OF THE SHARES AND BONDS TO THE ASSE SSEE, THE SAME WERE NOT TAKEN INTO ACCOUNT IN THE BOOKS OF ACCO UNT. THE SHARES WERE OF SMALL VALUE AND SOME WERE IN ODD LOTS WHICH COULD NOT BE DISPOSED OF IMMEDIATELY AND, THEREFORE, TH EY CONTINUED TO REMAIN IN POSSESSION OF THE ASSESSEE. SO ME OF THE SECURITIES WERE GOT TRANSFERRED IN THE NAME OF THE ASSES SEE. THAT, HOWEVER, DOES NOT MEAN THAT THE ASSESSEE MANIFESTL Y BECAME OWNER OF THE SHARES. THE SHARES AND BONDS BE LONGED TO THE DECEASED INTIMATES WHICH NORMALLY WOULD HAVE GONE TO THEIR LEGAL HEIRS WHO WERE NOT TRACEABLE. THIS WAS THE REAS ON FOR NON- ENTERING THE SHARES ETC. IN THE BOOKS. THE BONDS AND S HARES WERE ALSO NOT SALEABLE IMMEDIATELY. IN THESE CIRCUMSTA NCES, THE ASSESSEE COULD NOT BE TAKEN TO BE THE DE JURE OWNER OF THE SHARES. ALTHOUGH, THE WORD USED IS HELD, WE ARE OF THE VIEW THAT THESE WORDS IMPLY OWNERSHIP OF THE ASSESSEE TO THE EXCLUSION OF ALL OTHERS, WHICH IS NOT THE CASE HERE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TOTAL DENIAL OF EX EMPTION U/S 11(1)(A) ON THE GROUND THAT THE SHARES WERE HELD BY THE ASSESSEE WILL BE AGAINST EVEN THE LANGUAGE OF THE PROV ISION. THE LD. CIT(A) HAS REACHED MORE OR LESS ON THE SAME CONCLUSION BY MENTIONING THAT INFRINGEMENT, IF ANY, WAS TECHNICAL, WHICH SHOULD BE IGNORED BY APPLYING THE RULE OF PURPOSIVE CONSTRUCTION. WE TEND TO AGREE WITH HIM ON THE FACTS OF TH E CASE. IN SUCH CIRCUMSTANCES, WHAT CAN BE DONE IS TH AT INCOME DERIVED FROM THE SHARES, IF TAKEN INTO ACCOUNT IN THE BO OKS, MAY BE BROUGHT TO TAX. HOWEVER, WE AGREE WITH THE LD. CIT(A ) THAT THERE CANNOT BE A COMPLETE DENIAL OF THE EXEMPTION U/S 1 1(1)(A). THUS, GROUND NOS.1 & 2 ARE DISMISSED. 5. THE AFOREMENTIONED ORDER OF THE TRIBUNAL WAS MADE SUBJECT MATTER OF APPEAL FILED BEFORE THE HONBLE JURISDICTI ONAL HIGH COURT WHICH WAS DECIDED BY THE HONBLE HIGH COURT IN THE A FOREMENTIONED ORDER DATED 13 TH JULY, 2010 AND THE RELEVANT OBSERVATIONS OF THEIR LORDSHIPS ARE REPRODUCED BELOW FOR THE SAKE OF CONVENI ENCE:- 6. WE HAVE HEARD MRS. PREM LATA BANSAL, LEARNED COU NSEL FOR THE REVENUE. IT IS URGED BY HER THAT WHEN THE ASSESSEE H AD VIOLATED THE CONDITIONS ENGRAFTED UNDER SECTION 13 (1)( D)(III) OF THE ACT, IT WAS IMPROPER ON THE PART OF THE CIT (A) AS WE LL AS THE ITA NO.6056/DEL/2010 4 TRIBUNAL TO CONFER THE BENEFIT. TO APPRECIATE THE SAID SU BMISSION, WE HAVE BESTOWED OUR ANXIOUS CONSIDERATION AND PERUSE D THE IMPUGNED ORDERS. ON A STUDIED SCRUTINY OF THE SAME, IT IS PERCEPTIBLE THAT BOTH THE PARTIES HAVE TAKEN NOTE OF THE FAC T THAT THE SHARES AND BONDS BELONGED TO DECEASED INTIMATES WHI CH NORMALLY WOULD HAVE GONE TO THEIR LEGAL HEIRS WHO WER E NOT TRACEABLE AND THAT IS WHY THE ASSESSEE HAD NOT ENTERED THE SHARES IN THE BOOKS AND FURTHER THE BONDS AND SHARES W ERE NOT IMMEDIATELY SALEABLE. UNDER THESE CIRCUMSTANCES, THE TR IBUNAL HAS OPINED THAT THE ASSESSEE COULD NOT BE TREATED TO BE DE JURE OWNER OF THE SHARES. THE TRIBUNAL HAS ALSO HELD THAT THE TERM HELD COULD IMPLY OWNERSHIP OF THE ASSESSEE TO THE EX CLUSION OF ALL OTHERS BUT THE FACTUAL MATRIX DOES NOT INDICATE THE SAM E IN THE CASE AT HAND. BECAUSE OF THE SAID ANALYSIS, AS IS MANIFEST, THE TRIBUNAL HAS HELD THAT THE DENIAL OF EXEMPTION UNDER SECTION 11(1)(A) ON THE GROUND THAT THE SHARES WERE HELD BY THE ASSESSEE COULD GO AGAINST THE SPIRIT OF THE PROVISION. THE PRINCIPLE APPLIED BY THE TRIBUNAL IN THE FACTS OF THE CA SE, WE ARE DISPOSED TO THINK, CANNOT BE FOUND FAULT WITH AND, ACCOR DINGLY, WE CONCUR WITH THE SAME. 7. IN THE RESULT, THE APPEAL BEING SANS MERIT STANDS DISMISSED IN LIMINE. 6. THIS BEING THE POSITION, WITH RESPECT TO ASSESSMENT YEA R 2005- 06, RELYING UPON WHICH THE ASSESSING OFFICER HAS DENIED THE BENEFIT OF EXEMPTION TO THE ASSESSEE, WE FIND THAT THE SAID DECISION OF THE ASSESSING OFFICER HAS BEEN REVERSED AND THE MATTER IS NOW COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT. T HEREFORE, WE FIND NO MERIT IN THE DEPARTMENTAL APPEAL AND THE SAME IS DISMI SSED. 7. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 09.03.20 11. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 09.03.2011. DK ITA NO.6056/DEL/2010 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NO.6056/DEL/2010 6 DATE OF DICTATION 09.03.2011 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 10.03.2011 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH