DCIT, Chandigarh V. M/s Chitkara Educational Trust, Chandigarh

ITA 62/CHANDI/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0109 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 03-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINOD KRISHAN
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 62/CHD/2016 ASSESSMENT YEAR: 2012-13 THE DCIT, VS M/S CHITKARA EDUCATIONAL TRUST , CIRCLE-I(EXEMPTION), # 1907, SECTOR 18-C, CHANDIGARH. CHANDIGARH. PAN: AAATC6244M (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI SUSHIL KUMAR RESPONDENT BY : SHRI VINOD KRISHAN DATE OF HEARING : 11.04.2016 DATE OF PRONOUNCEMENT : 13.04.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-II, CHANDIGARH DATED 16.11.2015 FOR ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS ; 1. THAT THE ORDER OF LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE . 2. THE LD. CIT(A) HAS ERRED IN ALLOWING THE EXEMPTION U/S 11 OF THE ACT WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE HAS VIOLATED THE CONDITION U/S 13. 3. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O R RS. 18,72,000/- U/S 37 ON ACCOUNT OF INTEREST ON INTEREST FREE ADVA NCES WITHOUT CONSIDERING THE FACTS THAT EXEMPTION U/S 11 COULD N OT BE ALLOWED TO THE ASSESSEE IN VIEW OF THE CONDITIONS LAID DOWN IN SECTION 13 OF THE ACT. 2 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE IS AN EDUCATIONAL TRUST AND WAS GRANTED REGISTRATION UNDE R SECTION 12AA OF THE INCOME TAX ACT. THE ASSESSEE I N THE RETURN OF INCOME CLAIMED EXEMPTION UNDER SECTION 11 (1) OF THE ACT AND DECLARED NIL INCOME. THE ASSESSEE HAD TAKEN GROUND FLOOR AND BASEMENT OF BUILDING AT SCO 160-161 AND BASEMENT OF BUILDING AT SCO 160-161, SECTOR 9-C, CHANDIGARH ON RENT FROM SHRI MOHIT CHITKARA W.E.F. 01.04.2008 ON MONTHLY RENT OF RS. 6 LACS PER MONTH. 3. THE ASSESSING OFFICER NOTED THAT ASSESSEE TRUST HAD GIVEN RENT SECURITY OF RS.1.74 CRORES TO SHRI M OHIT CHITKARA WHO HAPPENS TO BE ONE OF THE TRUSTEES ALSO . THE ASSESSING OFFICER COMPARED THE RENT AND SECURIT Y WITH OTHERS AND CONVEYED TO THE ASSESSEE THAT INTER EST FREE RENTS SECURITY GIVEN TO SHRI MOHIT CHITKARA W AS MUCH MORE THAN WHAT WAS GIVEN TO OTHER LANDLORDS AROUND THE SAME TIME. ACCORDING TO THE ASSESSING OFFICER, THERE WAS DIVERSION OF FUNDS TO THIS EXTEN T BY THE ASSESSEE TRUST AND AS PER SECTION 13(1)(C) OF T HE INCOME TAX ACT, SUCH INCOME WAS NOT TO BE EXCLUDED FROM THE TOTAL INCOME AND PROVISIONS OF SECTION 11 WERE NOT APPLICABLE TO THE ASSESSEE. 4. IT WAS SUBMITTED BEFORE THE LD. CIT(APPEALS) THA T ITAT CHANDIGARH BENCH IN THE CASE OF THE ASSESSEE F OR ASSESSMENT YEAR 2011-12 CONSIDERED THE SAME ISSUE I N WHICH THE SIMILAR ADDITIONS HAVE BEEN DELETED BY L D. 3 CIT(APPEALS) AND ORDER OF THE LD. CIT(APPEALS) HAS BEEN CONFIRMED BY THE TRIBUNAL VIDE ORDER DATED 09.10.20 15 IN ITA 960/CHD/2014. THE LD. CIT(APPEALS) FOLLOWIN G THE ORDER OF THE TRIBUNAL, ALLOWED THE APPEAL OF TH E ASSESSEE. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THE ISSUES ARE COVERED BY ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF THE SAME ASSESSEE. FOR PRECEDING ASSESSMENT YEAR 2011-12, IN WHICH VIDE OR DER DATED 09.10.2015, ON IDENTICAL ISSUES, DEPARTMENTAL APPEAL HAVE BEEN DISMISSED IN ITA 960/2014, COPY OF THE ORDER IS PLACED ON RECORD. THE LD. CIT(APPEALS ), THEREFORE, RIGHTLY FOLLOWED THE ORDER OF THE TRIBUN AL FOR THE PURPOSE OF DELETING THE ADDITIONS. WE, THEREFO RE, DO NOT FIND ANY MERIT IN THESE GROUNDS OF APPEAL OF TH E REVENUE. THE SAME ARE, ACCORDINGLY, DISMISSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH S AINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH APRIL 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD