KAMALNAYAN JAMNALAL BAJAJ FOUNDATION, NEW DELHI V. ITO, EXEMPTION CIRCLE- 1(1), NEW DELHI

ITA 7415/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8847 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOHAIL MALIK
• Assessee Lawyers: KUMAR S R KRISHNA
• Keywords: Charitable institution; Cost of acquisition; Revised return; Capital Gains
• Section: 234B; 12A; 143(1); 139(1); 12; 10; 154; 11

Judgement Text

1 ITA NO. 7415/DEL/2017 IN THE INCOME TAX APPELLAT E TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT M EMBER AND MS SUCHITRA KAMBLE, JUDIC IAL MEMBER ITA NO. 7415/DEL/2017 ( A.Y 2014-15) (THROUGH VIDEO CONFEREN CING) KAMALNAYAN JAMNALAL BAJAJ FOUNDATION, 33 2 ND FLOOR, PRATAP NAGAR, MAYUR VIHAR, PHASE-1, NEW DELHI AAATK6973E (APPELLANT) VS ITO EXEMPTION CIRCLE-1(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. KUMAR S. R. KRISHNA, ADV RESPONDENT BY SH. SOHAIL MALIK, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 05/09/2017 PASSED BY CIT(A)-40 DELHI FOR ASSESSMENT YEAR 2014 -15. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE ASSESSEE CONTENDS THAT THE CAPITAL GAIN OF R S. 99,125/- ONLY SHOULD BE CONSIDERED AS PART OF TOTAL INCOME INSTEAD OF GR OSS RECEIPT OF RS. 2,06,00,000/- AS DONE BY THE CPC. THE RECTIFICATIO N BEING MISTAKE APPARENT FROM RECORD, THEREFORE, THE CLAIM MADE IN THE RETUR N SHOULD BE ALLOWED. 2. THE TOTAL INCOME COMPUTED AND DEMAND RAISED IS W RONG AND BAD IN LAW AND SHOULD BE CANCELLED. DATE OF HEARING 16.03.2021 DATE OF PRONOUNCEMENT 23.03.2021 2 ITA NO. 7415/DEL/2017 3. THE INTERESTS CHARGED U/S 234B AND U/S 234C IS W RONG AND BAD IN LAW AND NOT AT ALL LEVIABLE. 3. THE ASSESSEE IS A TRUST FORMED VIA TRUST DEED AND R EGISTERED U/S 12A (A) OF THE INCOME TAX ACT, 1961. FOR THE A.Y. 2014-15 THE RETURN OF INCOME IN FORM ITR-7 WAS FILED ON 24.09.2014 DECLARING INCOME OF RS. 48,020/- AFTER CLAIMING EXEMPTION U/S 11 OF INCOME TAX ACT AND 'NI L' TAX PAYABLE AS THE ASSESSEE HAD COMPLIED WITH THE PROVISIONS OF SECTIO N 11 & 12 OF THE INCOME TAX ACT, 1961 BEING A CHARITABLE TRUST. THE ASSESSEE AL SO FILED FORM 10 FOR ACCUMULATION U/S 11(2) OF THE INCOME TAX ACT, 1961. THE RETURN WAS PROCESSED U/S 143(1) VIDE ORDER DATED 28.03.2016 DENYING THE CLAIM OF DEDUCTION U/S 11(2) OF INCOME TAX ACT, 1961 AND CONSIDERING THE G ROSS RECEIPT INSTEAD OF CAPITAL GAIN ON SALE OF BIRLA SUN LIFE AS INCOME AN D ASSESSING THE APPELLANT AS AN AOP. AGGRIEVED BY THE ABOVE THE ASSESSEE HAS FIL ED THE RECTIFICATION REQUEST U/S 154 OF THE INCOME TAX ACT ON 08/06/2016 AND REC EIVED AN ORDER U/S 154 FROM CPC DT. 20/06/2016 RECEIVED ON 24/10/2016 STAT ING THAT THE FRESH CLAIM/REMOVED THE INCOME CANNOT BE MADE IN RECTIFIC ATION REQUEST. 4. BEING AGGRIEVED BY THE ORDER U/S 143(1) DATED 28 /3/2016 PASSED BY DCIT (CPC) (BANGALORE). THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR CONTENDED THAT THE CAPITAL GAIN OF RS .99,125/- ONLY SHOULD BE CONSIDERED AS PART OF TOTAL INCOME INSTEAD OF GROSS RECEIPT OF RS. 2,06,00,000/- AS DONE BY THE CPC. THE LD. AR FURTHER SUBMITTED THAT RECTIFICATION BEING MISTAKE APPARENT FROM RECORD. THEREFORE, THE CLAIM MADE IN THE RETURN SHOULD BE ALLOWED. THE LD. AR SUBMITTED THAT ORDER U/S 14 3(3) WAS PASSED ON 28/3/2016 THEREBY TAKING TOTAL GROSS RECEIPT OF RS. 2,06,00,000/- INSTEAD OF TAKING NET CAPITAL GAIN OF RS. 99,125/-. THE LD. A R SUBMITTED THAT THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THIS ASSESSMENT YEAR HAS REFLECTED IN COMPUTATION OF INCOME CAPITAL GAINS OF RS.99,125/- AS PART OF THE 3 ITA NO. 7415/DEL/2017 TOTAL INCOME AND HAS SUBJECTED THE SAME FOR THE PRO VISIONS OF SECTION 11(1) OF THE INCOME TAX ACT, 1961. AS AGAINST THE SAID TOT AL INCOME THE CPC IN THE INTIMATION U/S 143(1) HAS TREATED SUM OF RS. 2,06,0 0,000/- BEING THE GROSS CONSIDERATION RECEIVED AS THE CAPITAL GAINS. THE LD . AR SUBMITTED THAT THE ACCOUNT STATEMENT OF BIRLA SUN LIFE MUTUAL FUND IN THE NAME OF THE ASSESSEE WHEREIN REDEMPTION OF 1,03,206.023 UNITS HAS BEEN M ADE RESULTING IN RECEIVING OF GROSS SALE PROCEEDS OF RS. 2,06,00,000/-. AS AG AINST THIS, THE PURCHASE COST IS RS. 2,05,00,875/- RESULTING IN NET GAIN OF RS.99 ,125/-. THE ACQUISITION OF INVESTMENTS HAS NOT BEEN CONSIDERED AS APPLICATION OF FUNDS AT ANY POINT OF TIME. THE CONSIDERATION MINUS THE COST IS THE GAIN OF RS.99,125/- WHICH IS DULY REFLECTED AS INCOME OF THE ASSESSEE. THE LD. AR SUBMITTED THAT THE CIT(A) HAS DISMISSED THE CLAIM OF THE ASSESSEE ALONG WITH THE SUBMISSIONS THEREBY STATING THAT THERE WAS CHANGE HEAD OF INCOME AS THE ASSESSEE HAS FILED RECTIFICATION APPLICATION AND REVISED THE INCOME F ROM CAPITAL GAIN TO INCOME FROM OTHER SOURCES AND THE SAME IS NOT JUST AND PRO PER. THE LD. AR SUBMITTED THAT THE ORIGINAL RETURN HAS CLEARLY REFLECTED THE NET GAIN AND THE TAX IS ONLY APPLICABLE ON NET GAIN AND NOT ON THE GROSS CONSIDE RATION. 6. THE LD. DR RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT IN THE PRESEN T CASE, THE CPC HAS TAKEN GROSS CONSIDERATION OF RS.2,06,00000/- FOR WHICH TH E ORIGINAL PURCHASE COST IS RS. 2,05,00,875/- WHICH WAS PAID BY THE ASSESSEE D URING THE RELEVANT ASSESSMENT YEAR. THIS FACT WAS NOT DISPUTED BY THE REVENUE AUTHORITIES. THE ORIGINAL RETURN HAS CLEARLY REFLECTED THIS AMOUNT A T PAGE 7 COLUMN (II) (C) UNDER THE HEAD CAPITAL GAINS. BUT THE ASSESSING OFFICER INSTEAD OF TAKING ACTUAL NET GAIN OF RS. 99,125/- HAS TAKEN SALE PROCEEDS AT GRO SS LEVEL WITHOUT ANY SUBSTANTIVE REASON. IT IS A FACT ON RECORD THAT TH E ASSESSEE HAS APPLIED FOR RECTIFICATION AND FILED REVISED RETURN THEREBY CHAN GING THE HEAD OF THIS PARTICULAR TRANSACTION FROM CAPITAL GAIN TO INCOME FROM OTHER SOURCES BUT THE 4 ITA NO. 7415/DEL/2017 AMOUNT AND THE ACTUAL NET GAIN REMAINS THE SAME. T HE RECTIFICATION MIGHT NOT BE CORRECT UNDER THE STATUTE AS THERE IS A CHANGE O F HEAD BUT WHEN WE GO BY THE ORIGINAL RETURN IT CLEARLY SET OUTS THAT THE NE T GAIN OF RS.99,125/- HAS TO BE TAKEN INTO ACCOUNT BY THE CPC. IN THE PRESENT CASE , THE ASSESSEE TRUST HAS ACCUMULATED AND SET APART AN AMOUNT OF RS. 5,96,00, 000/- FOR FINANCIAL YEAR ENDED ON 31/03/2016 AND FURNISHED THE SAID INFORMAT ION TO ASSESSING OFFICER BY FILING FORM 10 ON 29/09/2014 I.E. BEFORE THE TIM E SPECIFIED U/S 139(1) OF THE INCOME TAX ACT AND INVESTED THE SAID AMOUNT INTO FI XED DEPOSITS. THE ASSESSEE HAS ALSO CLAIMED ACCUMULATION U/S 11(2) OF RS. 5,96 ,00,000/-/IN THE RETURN OF INCOME. THUS, THE ASSESSEE SATISFIED ALL THE CONDIT IONS AS SPECIFIED IN SECTION 11(2) AND THE ACCUMULATION SHOULD BE ALLOWED. FURTH ER, THE ASSESSEE REPORTED THE GAIN ON SALE OF BIRLA SUN LIFE MUTUAL FUND OF R S. 99,125 AS INCOME IN RETURN OF INCOME WHICH SHOULD BE CONSIDERED AS DECLARED BY THE ASSESSEE INSTEAD OF RS. 2,06,00,000/. THEREFORE, THE DEMAND RAISED OF R S. 2,58,88,130/- AND INTEREST U/S 234B AND 234C ARE HEREBY REJECTED AND THE BENEFIT U/S 11 SHOULD BE ALLOWED TO THE ASSESSEE. THEREFORE, WE ARE ALLOW ING THE APPEAL OF THE ASSESSEE TO THIS EXTENT AND THE CLAIM MADE IN THE R ETURN WHICH WAS ORIGINALLY FILED SHOULD BE TAKEN INTO ACCOUNT. HENCE, THE APP EAL OF THE ASSESSEE IS ALLOWED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF MARCH, 2021 SD/- SD/- (ANIL CHATURVEDI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 23/03/2021 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 5 ITA NO. 7415/DEL/2017 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI