The ITO, Ward-1(1), JUNAGADH V. Saurashtra Education Trust, JUNAGADH

ITA 889/RJT/2010

• Counselvise Citation: 88924914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-07-2011
• Assessment Year: misc
• Appeal Filed On: 28-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: MAHESH J RANPURA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.889/RJT/2010 (ASSESSMENT YEAR 2006-07) ITO, WD.1(1) VS SAURASHTRA EDUCATION TRUST JUNAGADH NEAR BILNATH TEMPLE VANTHALI ROAD, JUNAGADH PAN : AAATS9331A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AVINASH KUMAR RESPONDENT BY: SHRI MAHESH J RANPURA O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-IV, RAJKOT DATED 12-02-2010 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. SHRI AVINASH KUMAR, THE LD.DR SUBMITTED THAT THE ASSESSEE TRUST CLAIMED EXEMPTION IN RESPECT OF THE ACCUMULATION SAID TO BE MADE U/S 11(2) OF THE INCOME-TAX ACT. HOWEVER, IN FORM NO.10 THE ASSESSE E HAS NOT SPECIFICALLY STATED THE PURPOSE FOR WHICH THE ACCUMULATION WAS MADE. R EFERRING TO THE ASSESSMENT ORDER, THE LD.DR POINTED OUT THAT THE ASSESSEE HAS SIMPLY STATED THAT THE FUNDS WERE ACCUMULATED FOR THE PURPOSE OF THE TRUST, AS P ER THE TRUST DEED. REFERRING TO THE JUDGMENT OF THE MADRAS HIGH COURT IN CIT VS M. CT.MUTHIAH CHETTIAR FAMILY TRUST (2000) 245 ITR 400 (MAD) THE LD.DR POINTED OU T THAT THE ASSESSEE HAS TO SPECIFICALLY POINT OUT THE PARTICULAR PURPOSE FOR W HICH THE INCOME IS ACCUMULATED. A GENERALISED STATEMENT MADE IN FORM NO.10 IS NOT S UFFICIENT FOR THE PURPOSE OF CLAIMING EXEMPTION. THE LD.DR THEREFORE SUBMITTED THAT THE LOWER AUTHORITY HAS RIGHTLY REJECTED THE CLAIM OF THE ASSESSEE. ITA NO.889/RJT/2010 2 3. ON THE CONTRARY, SHRI M.J. RANPURA, THE LD.REPRE SENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLEARLY STATED IN FORM NO.10 THAT FOR THE PURPOSE OF OBJECT OF THE TRUST, THE FUNDS WERE ACCUMULATED. R EFERRING TO THE JUDGMENT OF THE DELHI HIGH COURT IN DIT VS MITSUI & CO. ENVIRONMENT AL (2008) 167 TAXMAN 43 THE LD.REPRESENTATIVE SUBMITTED THAT UNDER AN IDENTICAL CIRCUMSTANCE THE DELHI HIGH COURT FOUND THAT THE PURPOSE TO BE SPECIFIED CANNOT BE BEYOND THE OBJECT OF THE TRUST. THE DELHI HIGH COURT FURTHER FOUND THAT IT NEED NOT NECESSARILY BE SPECIFICALLY STATED FOR WHICH PURPOSE THE ACCUMULAT ION IS SOUGHT. IN VIEW OF THE JUDGMENT OF THE DELHI HIGH COURT, ACCORDING TO THE LD.REPRESENTATIVE, THE CIT(A) HAS RIGHTLY GRANTED EXEMPTION. 4. WE HAVE CONSIDERED THE SUBMISSIONS ON EITHER SID E AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US. THE ASSESSI NG OFFICER REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE SPECIFIC PUR POSE FOR WHICH THE FUND WAS ACCUMULATED WAS NOT MENTIONED IN FORM NO.10. FOR T HE PURPOSE OF CLAIMING EXEMPTION THE ASSESSEE HAS TO NECESSARILY FILE FORM NO.10 WITH REGARD TO ACCUMULATED INCOME. IN FORM NO.10, THE ASSESSEE HA S MENTIONED THAT FOR THE PURPOSES OF THE TRUST AS PER THE TRUST DEED, THE AM OUNT IS ACCUMULATED. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENT OF THE MAD RAS HIGH COURT IN THE CASE OF CIT VS M. CT. MUTHIAH CHETTIAR FAMILY TRUST (SUPRA) . THE MADRAS HIGH COURT HAS FOUND THAT THE ASSESSEE HAS TO NECESSARILY SPECIFY THE PARTICULAR PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED. UNLESS THE SPECIFIC PURPOSE IS MENTIONED IN FORM NO.10, IT MAY NOT BE POSSIBLE FOR THE ASSESSING OFFICER TO MONITOR THE SITUATION WHETHER THE TRUST HAS APPLIED THE ACCUMULATED FUND FOR THE PURPOSE MENTIONED IN FORM NO.10 OR NOT 5. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF D ELHI HIGH COURT IN DIT VS MITSUI & CO. ENVIRONMENTAL (SUPRA). THE DELHI H IGH COURT FOUND THAT THE PURPOSE TO BE SPECIFIED IN FORM NO.10 CANNOT BE BEY OND THE OBJECT OF THE TRUST. THE DELHI HIGH COURT FURTHER OBSERVED THAT PLURALIT Y OF THE PURPOSE FOR THE ACCUMULATED FUND IS NOT PRECLUDED. THEREFORE, WHE N THE AMOUNT IS ACCUMULATED ITA NO.889/RJT/2010 3 FOR THE OBJECT OF THE TRUST, THE EXEMPTION CANNOT B E DENIED. THE DELHI HIGH COURT PLACED ITS RELIANCE ON ITS EARLIER JUDGMENT IN CIT VS HOTEL & RESTAURANT ASSOCIATION [2003] 261 ITR 190. IN VIEW OF THIS JU DGMENT OF THE DELHI HIGH COURT, IT MAY NOT BE NECESSARY TO SPECIFY THE PURPOSE FOR WHICH THE FUND WAS ACCUMULATED. IN OTHER WORDS, IT IS SUFFICIENT TO M ENTION THAT THE AMOUNT IS ACCUMULATED FOR THE OBJECT OF THE TRUST. 6. THE MADRAS HIGH COURT IN CIT VS M. CT. MUTHIAH C HETTIAR FAMILY TRUST (SUPRA) HAS TAKEN A CONTRARY VIEW. NO JUDGMENT OF THE JURISDICTIONAL HIGH COURT WAS BROUGHT TO THE NOTICE OF THIS TRIBUNAL. THEREF ORE, WHEN TWO CONTRADICTORY JUDGMENTS ARE AVAILABLE ON THIS SUBJECT, THE VIEW W HICH FAVOURS THE ASSESSEE IS TO BE TAKEN, IN VIEW OF THE JUDGMENT OF THE APEX CO URT IN THE CASE OF CIT VS VEGETABLE PRODUCTS (1973) 88 ITR 1972 (SC). BY RES PECTFULLY FOLLOWING THE APEX COURT JUDGMENT IN THE CASE OF CIT VS VEGETABLE PROD UCTS (SUPRA), THE VIEW EXPRESSED BY THE DELHI HIGH COURT IN THE CASE OF DI T VS MITSUI & CO. ENVIRONMENTAL (SUPRA) IS TO BE FOLLOWED. ACCORDING LY WE UPHOLD THE ORDER OF THE LOWER AUTHORITY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-07-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 15 TH JULY, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-IV, RAJKOT 4. THE CIT-III, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT