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04-09-2019, Sri Srinivasa Educational, Section 11(5), Tribunal Bangalore

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1 week 2 days ago #10701 by amit
Section - 11(5), 13(1)(c), 11(2)(b), 13, 264
Order Date - 04-09-2019
Favouring - Assessee
Court - Tribunal Bangalore
Appellant - Sri Srinivasa Educational & Charitable Trust
Respondent - ACIT
Justice - N. V. VASUDEVAN VP & B.R BASKARAN AM
Citation - 919Taxpundit31
Appeal No. - ITA No. 709/Bang/2018
Asstt. Year - 2010-11

Order

PER : N.V VASUDEVAN

The assessee has filed appeals for assessment years 2010-11 to 2013-14 and the revenue has filed appeals for assessment years 2008-09 to 2014-15. The assessee has filed Cross Objections for assessment years 2008-09, 2009-10 and 2014-15. All these appeals are directed against the common order dated 17-02-2016 passed by Ld CIT(A)-11, Bengaluru. The grounds urged in these appeals arise out of common set of facts. Hence all these appeals were heard together and are being disposed of by this common order, for the sake of convenience

2. At the time of hearing, the Ld A.R did not press the Cross objections and accordingly all the Cross objections filed by the assessee are dismissed as Not Pressed. In all the appeals filed by the assessee, the grounds numbered as 7 to 9(b) relate to certain legal issues. At the time of hearing, the Ld A.R did not press those grounds. Accordingly, those grounds are also dismissed as Not pressed. The Grounds numbered as 10 & 11 n all the appeals of the assessee relate to charging of interest, which are consequential in nature. The Ground Nos.1, 12 and 13 are General in nature. The remaining grounds urged by the assessee relate to the following additions sustained by Ld CIT(A):-

(a) Rejection of claim to exclude income offered by the assessee in the statement taken u/s 132(4) for

Asst year 2010-11 - Rs.4,00,00,000/-
Asst. year 2011-12 - Rs.6,00,00,000/-
Asst year 2012-13 - Rs.7,50,00,000/-
Ass . year 2013-14 - Rs.7,50,00,000/-

(b) Direction of the Ld CIT(A) to disallow depreciation @ 10% of the above said amounts.

3. In the appeals filed by the revenue, the common issue urged in all the years is - Whether the Ld CIT(A) was justified inholding that the assessee is entitled to exemption u/s 11 of the Act, thus reversing the decision of the assessing officer in rejecting the claim for said exemption. Following grounds have been urged in all the years in respect of above said issue:-

(i) Whether in the facts and circumstances of the case, the CIT(A) erred in granting benefit of exemption u/s 11 to the assessee even though the trust applied its income for purposes other than those admissible u/s 11(2)(b) read with section 11(5) by diverting to its trustees and other specified persons.

(ii) Whether in the facts and circumstances of the case, the CIT(A) erred in granting benefit of exemption u/s 11 to the assessee even though the trust utilized its income in contravention of the provisions of section 13(1)(c) for the benefit of the persons specified in section 13(3) in support of which there are clear documentary evidences available in the seized material as also referred to in the assessment order by the Assessing Officer.

(iii) Whether in the facts and circumstances of the case, the CIT(A) erred in ignoring the noting in the seized material and also the admission of Principal Person u/s 132(4) which clearly established the fact that there is no documentary evidences with the assessee trust to claim that the income generated in the name of collection of capitation/development fee has been applied for its object.

(iv) Whether in the facts and circumstances of the case, the CIT(A) is correct in granting exemption u/s 11 even though on one hand he sustained a total addition of Rs.25 crores for various years on the ground that the assessee has not been able to prove genuineness of the expenditure made in cash for which also no evidences produced by the assessee to prove that the same were incurred towards application of its income on objects of the trust.

(v) Whether in the facts and circumstances of the case, the CIT(A) failed to ignore the fact that the assessee trust, as evidenced from the seized documents relating to collection of capitation/development fees, paid commission @ Rs.1,75,000 to an agent for soliciting students which is surely not an object of the trust and by doing so, the assessee trust indulged into a commercial activity.

(vi) For these and such other grounds that may be urged at the time of hearing with the plea that the orders of Ld CIT(A) may be set aside and that of the assessing officer may be restored.”

4. The revenue has also raised specific issues in certain years as detailed below:-

Assessment Year: 2012-13:-

(a) Whether the Ld CIT(A) was justified in deleting the addition of Rs.703.00 lakhs and Rs.554.50 lakhs made for violation of provisions of sec.13(1)(c) of the Act.***

(b) Addition of Rs.993.00 lakhs relating to payment made for non-specified purposes in cash to contractor, other related concerns, promoters etc.

Assessment Year : 2013-14:-

(a) Whether the Ld CIT(A) was justified in deleting the addition of Rs.703 00 lakhs and Rs.554.50 lakhs made for violation of provisions of sec.13(1)(c) of the Act.

(b) Addition of Rs 4333.00 lakhs relating to payment made for non-specified purposes in cash to contractor, other related concerns, promoters etc.

Assessment year : 2014-15:-

(a) Whether the Ld CIT(A) was justified in deleting the addition of Rs.703.00 lakhs and Rs.554.50 lakhs made for violation of provisions of sec.13(1)(c) of the Act.***

(b) Addition of Rs.476.00 lakhs relating to payment made for non-specified purposes in cash to contractor, other related concerns, promoters etc.

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