TaxTMI 
TaxTMI 
2012 (6) TMI 714
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....ence without recording in writing the reasons and without allowing the Assessing Officer a reasonable opportunity to examine the said evidence, in gross violation of rule 46-A of the IT Rules, 1962. 2. The Ld. CIT(Appeals) erred in law and on facts in accepting the supplementary lease deed dated 04.01.2009 as such without examining one of the witness namely Sh. Mohan Pal Singh whose signatures appended as "M.P. Singh" appear to be doubtful, as the said witness did not sign on the original lease deed dated 24.12.2004, which puts a question mark on the legality of the original lease deed and the supplementary lease deed. 3. The Ld. CIT(Appeal) erred in law and on facts in not appreciating the facts that the original lease deed/supplementary lease deed had no statutory force as far as violation of section 13(3) of the IT Act is concerned, since the said deeds were in reality a part of family arrangement between Sh. Anil Saraswat, Secretary and his wife Smt. Sudha Saraswat, the lessor. 4. The Ld. CIT (Appeals) erroneously deleted the addition guided by an hypothetical....
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.... it is seen that after 30 years, if lease is not extended then whatever investment is made in the construction of building on leased land will become the property of the lessor, i.e., Smt. Sudha Saraswat without any right of compensation available to the lessee, i.e., the assessee. In that situation, the assessee would be in its disadvantage position. Therefore, according to the AO, there is violation of section 13 of the IT Act and as such, exemption u/s. 11 and 12 of the IT Act was denied to the assessee and addition was, accordingly, made. 5. The assessee reiterated the same submissions before the ld. CIT(A) and submitted that the order of the AO is purely based on future events, which or may not occur after a period of 30 years. No such event has occurred in the assessment year under consideration. It is just denial of ownership of capital expenditure in the hands of the assessee society, which is unjustified and illegal. It was also submitted that the AO allowed depreciation @ 10% on the investment in building, which could be lower if the assessee is owner of the building in question. Therefore, AO admitted the ownership of the assessee over the building in question. Theref....
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.... above provisions. Since the same AO accepted the claim of assessee later on, therefore, the department should follow the consistency in approach and the departmental appeal may be dismissed. 8. We have considered the rival submissions and the material on record and did not find any justification to interfere with the order of the ld. CIT(A) in allowing the appeal of the assessee. The whole case revolves upon the lease deed dated 24.12.2004 executed between the lessor, Smt. Sudha Saraswat and the assessee-society through which the land measuring 5150.48 sq. meter was let out to assessee society for 30 years. Copy of the lease deed is appended with the assessment order. The assessee paid Rs. 10,000/- as premium and agreed to pay Rs. 150/- per month as rent of the demised property, i.e., 1800/- per annum. The assessee was entitled to raise any construction from own funds and to use the land and building over the leased property. All expenses were to borne by the assessee and as per clause 5 of the deed, in case the lessee/assessee wanted the extension of lease after 30 years on expiry of lease deed, the extension of the lease shall be at the option of the lessee and the lessor/own....
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....ying exemption to the assessee u/s. 11 & 12 of the IT Act. Whether in such event, the order of the AO would stand as on today because the option can be exercised in the year 2034, which nobody knows as to what would happen in future. No event has happened in the assessment year under appeal. It is only a hypothetical and bald assertion of the AO in denying the benefit of section 11 to the assessee. According to section 13 of the IT Act, such income or property shall be used or applied for the benefit of such person as referred in sub-section (3) of section 13 during the previous year relevant to the assessment year under appeal for denying benefit of section 11 & 12 of the Act. However, in the previous year relevant to the assessment year under appeal, nothing has happened to provide any benefit to any such prohibited person out of the income or property of the assessee society. At present, the assessee is in advantageous position through lease deed of meager rent of Rs. 150/- per month for 30 years. The assessee as per lease deed is entitled for raising any construction, using the constructed building for its own purposes and as per other clauses, the assessee could have get the r....