TaxTMI 
TaxTMI 
2013 (12) TMI 250
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....ue by order dated 06-01-1993 for the opinion of this Court on the following questions: 1. Whether, on the facts and in the circumstances of the case, the ITAT is justified in setting aside the orders passed by the CIT, AP-I, under Section 263 of the said Act, consequently restoring the original assessment orders, thereby rejecting the stand of the department to assess the capital gains chargeable to tax arising out of the compensation amount of Rs.30,19,257/- awarded by the State Government on 04-02-1983 for the compulsory acquisition of the property known as Kothi Asafia on 23-09-1981? 2. Whether, on the facts and in the circumstances of the case, the ITAT should not have interpreted that the settler of the Trust also being the accou....
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....d therefore, it was eligible for exemption under Section 11 of the said Act. The Inspecting Assistant Commissioner, under the provisions of Section 144A of the said Act, held that the Trust had not violated the provisions of Section 13(1)(c) read with Section 13(3) of the said Act and can be treated as a Charitable Trust provided that no other conditions requisite were violated. The Assessing Officer, accordingly, extended the benefit of Section 11 of the said Act to the Trust. 4. Thereafter, the Commissioner of Income Tax, in exercise of his power under Section 263 of the said Act, formed opinion that both the Inspecting Assistant Commissioner and the Assessing Officer were in error and the assessments were prejudicial to the interests ....
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.... different question which had to be answered considering whether the assessee-Trust was the absolute owner. At the time of transfer, the property was subjected to charge and the assessee-Trust did not acquire any title overcoming Section 74 of the Estate Duty Act. The Tribunal held that the Inspecting Assistant Commissioner has taken decision after duly examining all the facts and legal position and the points involved. 5. Mr. S.R. Ashok, learned counsel for the Revenue, relying on the decision of the Division Bench of this Court in the case of COMMISSIONER OF INCOME-TAX v. BILQUIS JAHAN BEGUM [1984] 150 ITR 508, submits that the recovery of estate duty from the compensation amount cannot be said to be costs and expenses of acquisition o....
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....aid Nizam Osman Ali Khan, but not in relation to the settler. Next he contends, citing a decision of Madhya Pradesh High Court in the case of COMMISSIONER OF INCOME TAX v. GOVINDRAM SEKSARIYA CHARITY TRUST [1987] 166 ITR 580, that if the income tax officials below, after considering the factual and legal position, passed an order, the same cannot be revised under Section 263 of the said Act by the Commissioner of Income Tax, and this is not within the purview of the aforesaid Section. In support of his contention, he has also relied on a decision of Madras High Court in the case of VENKATAKRISHNA RICE COMPANY v. COMMISSIONER OF INCOME TAX [1987] 163 ITR 129. 7. We have heard both the learned counsel and considered the factual aspect. ....
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....Thus this property was transferred by way of a gift for the charitable purposes along with the aforesaid liability of making payment of estate duty. It appears, on careful reading of the factual and legal position, that the assessee-Trust did not get any income on account of compensation paid and almost entire compensation amount was eaten up on account of payment of estate duty. 10. Charitable Trust is disentitled to get benefit under Section 11 of the said Act if any part of any income or any property of the Trust or institution is, during the prevision year, used or applied directly or indirectly for the benefit of any persons amongst others of the author of the Trust or the founder of the institution or any person who has made substa....
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....1)(c)(ii) read with Section 13(3) and consequently, the Assessing Officer should not have extended the benefit of Section 11 of the said Act. 11. It has been rightly contended by Mr. Ravi, learned Senior counsel for the assessee-Trust, and we find support from the decision of Madhya Pradesh High Court in the case of Govindram Seksariya Charity Trust (supra), that when the Income Tax officer, after considering the relevant facts and provisions of law, has passed an order, it was not within the purview of Section 263 of the said Act to reopen the issue in the name of alleged prejudicial to the interests of the Revenue. In the said judgment of the Madhya Pradesh High Court, it was held on the proposition of law that since the income tax off....