ITO (OSD), CHENNAI V. M/s. Sri S.Kuppusamy Memorial Education Trust, Tiruvannamalai

ITA 76/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4817 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 14-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: Charitable institution; Benefit of exemption
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 76/MDS/2011 ASSESSMENT YEAR : 2007-08 THE INCOME-TAX OFFICER (OSD), EXEMPTIONS-III, CHENNAI. V. M/S. SRI S.KUPPUSAMY MEMORIAL EDUCATIONTRUST, 190, CHENGAM ROAD, THIRUVANNAMALAI-606 601. (PAN :AALFS7502G) (APPELLANT) (RESPONDENT) A N D C.O. NO. 43/MDS/2011 (IN ITA NO. 76/MDS/2011) ASSESSMENT YEAR : 2007-08 M/S. SRI S.KUPPUSAMY MEMORIAL THE INCOME- TAX OFFICER (OSD), EDUCATIONTRUST,1 EXEMPTIONS-III, 90, CHENGAM ROAD, CHENNAI. THIRUVANNAMALAI-606 601. (CROSS OBJECTOR) (RESPONDEN6T) DEPARTMENT BY : SHRI SHAJI P. JACOB ASSESSEE BY : SHRI V. SRINIVASAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO. 76/MDS/2011 IS AN APPEAL FILED BY THE REVE NUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-XII, CHENNAI IN ITA NO. 24 8/09-10 DATED 15-10-2010 FOR I.T.A.76/MDS/2011 & CO 43/MDS/2011 2 THE ASSESSMENT YEAR 2007-08 AND CO NO. 43/MDS/2011 IS THE CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE REVENUES APPEAL IN ITA NO. 76/MDS/2011. 2. SHRI SHAJI P. JACOB, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI V. SRINIVASAN, CA REPRESENTED ON BEHALF OF THE ASSESSEE. 3. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE L EARNED AUTHORISED REPRESENTATIVE THAT THE CROSS OBJECTION FILED BY TH E ASSESSEE WAS TIME BARRED BY 29 DAYS. THE ASSESSEE HAS ALSO FILED AFFIDAVIT SPE CIFYING THAT THE MANAGING TRUSTEE WHO WAS LOOKING AFTER THE AFFAIRS OF THE TR UST WAS BED RIDDEN SUFFERING FROM VIRAL HEPATITIS WITH CHRONIC GASTRITIS. IT WA S PRAYED THAT THE DELAY MAY BE CONDONED. THE LEARNED DR HAS NOT SERIOUSLY OBJECTE D TO THE CONDONATION OF THE DELAY. THE DELAY IS FOUND TO BE EXPLAINED AND THE SAME IS CONDONED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS HEARD ON M ERITS. 4. THE ASSESSEE HAS ALSO FILED AN ADDITION GROUND W HICH IS AS FOLLOWS : CIT(A) ERRED IN SUSTAINING A PART OF THE ADDITION MADE BY THE ASSESSING OFFICER HOLDING IT AS NOT INVESTED IN GOVT. SECURITIES WHEN THE APPELLANT (CROSS-OBJECTOR) HAD APPLIED MORE THAN 100% OF THE INCOME EARNED DURING THE YEAR THE FOR CHARITABLE PURPOSES. HE OUGHT TO HAVE FOLLOWED THE DECISION OF THE APEX COURT IN S.RM.M.CT.M TIRUPPANI TRUST VS. CIT REPORTED IN 230 ITR 636. I.T.A.76/MDS/2011 & CO 43/MDS/2011 3 IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESEN TATIVE THAT THE ASSESSEE IS A TRUST WHICH IS RUNNING AN ENGINEERING COLLEGE AND TH E ASSESSEE HAS SPENT MORE THAN 100% OF ITS RECEIPTS DURING THE RELEVANT ASSES SMENT YEAR AND CONSEQUENTLY NO DISALLOWANCE WAS LIABLE TO BE MADE. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD TREATED THE DEPOSIT MADE BY THE ASSESSEE WITH M/S. SHRIRAM CHITS TAMILNADU PVT. LTD. TO EXTENT OF ` 5,73,828/- AS BEING IN VIOLATION OF THE PROVISIONS OF SECTIONS 11(5) AND 13(1)(D) OF THE IN COME-TAX ACT, 1961. IT WAS THE SUBMISSION THAT THE TOTAL RECEIPTS OF THE ASSESSEE TRUST WAS TO AN EXTENT OF ` 8,29,96,195/- AND THE APPLICATION OF THE INCOME WAS TO AN EXTENT OF ` 9,56,25,478/-. IT WAS THE SUBMISSION THAT AS THE A PPLICATION WAS MORE THAN THE RECEIPTS, THE ASSESSEE SHOULD NOT BE DENIED THE BEN EFITS OF SEC. 11. ONA SPECIFIC QUERY FROM THE BENCH AS TO THE SOURCE FOR THE DEPOS IT IN SHRIRAM CHITS TAMILNADU PVT. LTD. IT WAS EXPLAINED THAT THE ASSESSEE HAD AN OPENING BALANCE OF MORE THAN ` 10,44,000/- IN CASH AND MORE THAN ` 30 LAKHS IN THE STATE BANK OF INDIA TRUST ACCOUNT-ESCROW. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEES CASE WAS SQUARELY COVERED BY THE DECISION OF THE HON'BLE SUP REME COURT IN THE CASE OF S. RM. M. CT. M. TIRUPPANI ATRUST V. CIT, REPORTED IN 230 ITR 636 AS ALSO THE DECISION OF THE LUCKNOW BENCH OF THIS TRIBUNAL IN T HE CASE OF KRISHI UTPADAN MANDI SAMITY , JALAUN & ORS. V. ITO, REPORTED IN 20 11) 51 DTR (LUCKNOW) (TRIB) 337. IT WAS THE SUBMISSION THAT THE REVENUE WAS CH ALLENGING THE ORDER OF THE I.T.A.76/MDS/2011 & CO 43/MDS/2011 4 LEARNED CIT(A) IN HOLDING THAT THE ASSESSEES INCOM E OTHER THAN THE INVESTMENT IN SHRIRAM CHITS TAMILNADU PVT. LTD. WAS ELIGIBLE FOR EXEMPTION U/S.11 OF THE ACT. 5. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE FACTS IN THE PRESENT CASE SHOWS THAT THE ASSESSING OFFICER HAD D ENIED THE ASSESSEE THE BENEFIT OF EXEMPTION U/S 11 ON THE GROUND THAT THE ASSESSEE HAD INVESTED ` 5,73,828/- IN SHRIRAM CHITS TAMILNADU PVT. LTD. IT WAS ALSO NOTI CED THAT THE ASSESSEES APPLICATION FOR THE CHARITABLE PURPOSE IS MORE THAN THE TOTAL RECEIPTS. ONCE THE APPLICATION IS MORE THAN THE TOTAL RECEIPTS, THE AS SESSEE WOULD BE ENTITLED TO THE BENEFITS OF EXEMPTION U/S 11 OF THE ACT. THIS VIEW OF OURS FINDS SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F S.RM. M. CT. M. TIRUPPANI TRUST, REFERRED TO ABOVE AS ALSO THE DECISION OF TH E LUCKNOW BENCH OF THIS TRIBUNAL IN THE CASE OF KRISHI UTPADAN MANDI SAMITI , JALAUN & ORS., REFERRED TO SUPRA. IN THE CIRCUMSTANCES, THE FINDING OF THE LE ARNED CIT(A) IN HOLDING THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF SECTION 11 I S UPHELD AND THE FINDING OF THE LEARNED CIT(A) IN HOLDING THAT THE INVESTMENT IN M/ S. SHRIRAM CHITS TAMILNADU PVT. LTD. IS IN VIOLATION OF THE PROVISIONS OF SECT ION 13 OF THE ACT STANDS CANCELLED. IN THE CIRCUMSTANCES, THE ASSESSING OFFICER IS DIRE CTED TO GRANT THE ASSESSEE THE BENEFIT OF EXEMPTION UNDER SECTION 11 IN RESPECT OF THE TOTAL INCOME OF THE I.T.A.76/MDS/2011 & CO 43/MDS/2011 5 ASSESSEE. IN THE CIRCUMSTANCES, THE APPEAL OF THE REVENUE IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE STANDS ALLOWED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 24/06/2 011. SD/- SD/- (AABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 24 TH JUNE , 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE