DDIT (E) 1(1), MUMBAI V. MAYA KUKREJA FOUNDATION TRUST, MUMBAI

ITA 6263/MUM/2011

• Counselvise Citation: 626319914 RSA 2011
• Duration Of Justice: 3 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH KAMAT SR
• Keywords: Additional evidence
• Section: 143(3); 2; 11

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI B BENCH , , , BEFORE S/SH. JOGINDER SINGH ,JUDICIA L MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 6263 /MUM/201 1 , / ASSESSMENT YEAR - 200 8 - 0 9 ADIT(E) - I(1) ROOM NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL MUMBAI - 12 VS M/S. MAYA KUKREJA FOUNDATION TRUST, 355 LINKING ROAD, KHAR (W) MUMBAI - 400 052. PAN: AAATM 3753 C ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY : SHRI PRAKASH JOTWANI / REVENUE BY :SHRI YOGESH KAMAT - SR.AR / DATE OF HEARING : 23 - 0 6 - 2015 / DATE OF PRONOUNCEMENT : 23 - 0 6 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 15.6.2011 OF THE CIT(A) - I, MUMBAI ,THE ASSESSING OFFICER(AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) JUSTIFIED IN DECIDING THE APPEAL OF THE ASSESSEE BASED ON THE ADDITIONAL EVIDENCE IN CONTRAVENTION TO RULE 46A OF THE I.T. RULES 1961. 2. THE APPELLANE PRAYS THAT THE ORD ER OF THE LD. CIT(A) - 1, MUMBAI BE SET ASIDE AND THAT OF THE AO BE RESTORED. ASSESSEE - TRUST FILED ITS RETURN OF INCOME ON 26.12.2008 DECLARING TOTAL INCOME AT 52.26 LACS AFTER CLAIMING EXEMPTION U/S. 11 OF THE ACT. AO COMPLETED THE ASSESSMENT ON 29.12.201 2 U/S. 143(3) OF THE ACT DETERMINING THE INCOME OF THE ASSESSEE AT RS. 68.51 LACS . W HILE COMPLETING THE ASSESSMENT DENIED THE CLAIM OF EXEMPTION MADE BY THE ASSESSEE U/S. 11 OF THE ACT . 2. THE EFFECTIVE GROUND OF APPEAL IS ABOUT ADMITTING ADDITIONAL EVIDENCE BY THE FIRST APPELLATE AUTHORITY (FAA) I N CONTRAVENTION OF THE R ULE 46A OF INCOME TAX RULES, 1962(RULES) . DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAD CLAIMED THAT A LOAN OF RS.1.20 CR . WAS ADVANCED TO M/S. TIKAMDAS FINANCE AND INVE STMENTS (TFI) . AS PER THE AO THE ASSESSEE HAD NOT FURNISHED ANY FUND FLOW STATEMENT TO SUBSTANTIATE THE SOURCE OF THE LOAN , THAT THE AMOUNT ACCUMULATED BY THE ASSESSEE EVERY YEAR REMAINED UNSPENT, THAT IT HAD OFFERED FOR TAXATION THE SAID AMOUNT DURING THE YEAR UNDER APPEAL AS PER THE PROVISIONS OF S.11(3) OF THE ACT, THAT ONLY THE SURPLUS ARRIVED DURING THE YEAR HAD BEEN OFFERED FOR TAXATION, THAT THE ASSESSEE HAD SPENT SMALL AMOUNT TOWARDS THE OBJECT OF THE TRUST, THAT BALANCE SURPLUS WAS TRANSFERRED TO BA LANCE SHEET, THAT THE APPLICATION OF INCOME ON CHARITABLE ACTIVITIES STOOD AT 13.60% OF THE GROSS RECEIPTS, THAT THE ITA/ 6263 /MUM/201 1 ,AY. 0 8 - 09 - MAYA 2 ASSESSEE HAD DEVISED A COLORFUL MECHANISM TO PROVIDE BENEFIT TO THE PARTY COVERED U/S.13(3) OF THE ACT BY NOT APPLYING THE FUNDS TO THE OBJ ECTS OF THE TRUST , THAT IT TRANSFERRED THE SAME TO BALANCE SHEET AND HAD ADVANCED THE LOAN TO A PARTY COVERED BY THE PROVISIONS OF S.13(3) OF THE ACT , THAT THE ENTIRE ACTIVITIES OF THE TRUST WAS CARRIED OUT FOR PROVIDING INDIVIDUAL BENEFIT TO THE PARTY COV ERED U/S. 13(3), THAT MERE CHARGING OF INTEREST AND TAKING SECURITY AGAINST THE LOANS WAS NOT A PROPER JUSTIFICATION TO CLAIM BENEFITS OF S.11, THAT THE ENTIRE ACTIVITY WAS NOTHING BUT AN ACT TO PROVIDE INDIVIDUAL BENEFIT TO THE AUTHOR OF THE TRUST BY ADVA NCING LOAN TO TFI . 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA). BEFORE HIM IT WAS CONTENDED THAT THE AO WAS NOT JUSTIFIED IN DENYING THE EXEMPTION U/S.11 TO THE ASSESSEE, THAT THE OTHER BAN KS WERE CHARGING INTEREST OF LESS THAN 9% , THAT THE ASSESSEE CHARGED INTEREST @ 12% FOR THE LOANS ADVANCED BY IT, THAT OUT OF RS.1.20 CRORES THE ASSESSEE HAD RECEIVED BACK RS.6.50 LACS FROM TFI BY THE YEAR END, THAT ASSESSEE HAD ADVANCED LOAN AGAINST ADEQ UATE SECURITY. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESSMNERT ORDER THE FAA HELD THAT THE ASSESSEE HAD ADVANCED LOAN TO TFI , THAT THE LOAN WAS SECURED BY EQUITABLE MORTGAGE OF PROPERTY, THAT THE LOAN WAS NOT INTEREST FREE, THAT THE A SSESSEE WAS CHARGING INTEREST @ 12% ON THE LOAN GIVEN, THAT THE MARKET RATE AT THAT POINT OF TIME WAS ABOUT 9%, THAT THE ASSESSEE WAS COVERED BY EXEMPTION AS STIPULATED U/S. 13(3) OF THE ACT. HE DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE. HE FURTHE R HELD THAT IT WAS NOT CORRECT TO SAY THAT THE ASSESSEE HAD NOT SUBMITTED THE FUND FLOW STATEMENT, THAT IT HAD FILED INCOME AND EXPENDITURE ACCOUNT AND BALANCE SHEET ALONGWITH THE LEDGER ACCOUNT OF THE PARTY CONCERNED, THAT THE AO HAD ACKNOWLEDGED THE RECE IPT OF ABOVE STATEMENTS THAT IT COULD NOT BE SAID THAT THE ASSESSEE HAD NOT FURNISHED THE INFORMATION CALLED FOR BY THE AO OR HAD NOT PLACED THE DOCUMENTARY EVIDENCE ON RECORD TO SUBSTANTIATE ITS CLAIM ABOUT FURNISHING SECURITY FOR GIVING LOAN , THAT A SUM OF RS.6.50 LACS WAS RETURNED BACK BY THE OTHER PARTY, THAT THE LOAN AMOUNT WAS SHOWN AT RS.1,13,50,000/ - AGAINST THE OUTSTANDING AMOUNT OF RS.1.20 CRORES. FINALLY, THE FAA DELETED THE ADDITION MADE BY THE AO. 4. B EFORE US, DEPARTMENTAL REPRESENTATIVE(DR) SUP PORTED THE ORDER OF THE AO. ON A SPECIFI C QUERY BY THE BENCH ABOUT THE ADDITIONAL EVIDENCE ADMITTED BY THE FAA HE FAIRLY CONCEDED THAT THE FAA HAD NOT CONSIDERED ANY NEW EVIDENCE. WE FIND THAT THE FAA HAD TAKEN INTO CONSIDERATION THE RELEVANT FACTS AND DEC IDED THE ISSUE ON MERITS. THE AUTHORISED REPRESENTATIVE ( AR ) S UPPORTED THE ORDER OF THE FAA AND REFERRED TO PAGE NO.16 OF THE PAPER BOOK. 5. WE HAVE PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO HAD DENIED THE CLAIM OF EXEMPTION MADE BY THE ASSESSEE U /S. 11 OF THE ACT, HE HELD THAT THE ASSESSEE HAD ADVANCED LOAN IN CONTRAVENTION OF THE PROVISION OF S.13(3) OF THE ACT, THAT TFI HAD SENT CONFIRMATION OF ACCOUNTS WITH REGARD TO THE ASSESSEE TRUST, THAT THE CONFIRMATION WAS MADE AVAILABLE TO THE AO, THAT I N THE CONFIRMATION THE ADVANCING OF LOAN IS PROVED WITHOUT ANY DOUBT. IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT THE FAA HAD NOT ADMITTED ANY ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A OF THE RULES. THE FAA HAD CONSIDERED THE ISSUE FROM ALL PO SSIBLE ANGLES AND HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WE DO NOT FIND ANY LEGAL INFIRMITY IN HIS ORDER. THEREFORE, CONFIRMING THE ORDER OF FAA, WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPE AL FILED BY THE AO STANDS DISMISSED. . ITA/ 6263 /MUM/201 1 ,AY. 0 8 - 09 - MAYA 3 ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 RD , JUNE ,2015. 23 , 2015 SD/ - SD/ - ( / JOGINDER SINGH ) ( / RAJENDRA) / JUDICIAL MEMBER / ACC OUNTANT MEMBER / MUMBAI, /DATE: 23. 6. 2015 . . . JV . SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ ASST. REGISTRAR , / ITAT, MUMBAI.