TaxTMI 
TaxTMI 
2014 (9) TMI 957
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..... Aggrieved by the assessment order dated February 15, 2013 the assessee filed an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) vide impugned order allowed the appeal of the assessee in full. Now, the Revenue has come in appeal before the Tribunal impugning the findings of the Commissioner of Income-tax (Appeals). 3. In appeal, the Revenue has raised as many as six grounds. Ground Nos. 1 and 6 are general in nature. In ground No. 2, the Revenue has assailed the findings of the Commissioner of Income-tax (Appeals) in allowing depreciation on assets purchased by the assessee-trust. The stand of the Revenue is that the assessee is not entitled for depreciation on assets purchased, as the cost of assets was considered as application of income. Allowing depreciation will tantamount to grant of double benefit to the assessee. In ground No. 3, the Revenue has challenged the findings of the Commissioner of Income-tax (Appeals) in allowing the payment made for contract work to a firm owned by one of the managing trustees of the assessee. The assessee had allotted certain civil work to M/s. Vekkaliamman Builders and Promoters. Payment of R....
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....the order of the Tribunal dated September 27, 2013. In reply to ground No. 4 with respect to advance payments made to M/s. SAMS Pvt. Ltd., the learned authorised representative contended that the assessee-trust is using infrastructure facilities of M/s. SAMS P. Ltd., without payment for the services rendered by the company. Therefore, there is no violation of the provisions of section 13(1)(c) as alleged by the Revenue. On the last ground, with respect to investment in gold bullion, the learned authorised representative submitted that the assessee had purchased gold coins of various denominations for distributing them as awards and prizes to meritorious students. The assessee had purchased 1500 gms. of gold out of which 500 gms., of gold was utilised for distribution of prizes. Thereafter, the scheme was withdrawn and in the next year, the entire balance amount of gold i.e., 1,000 gms., was sold. The purchase of gold coins was made not for investment purposes but only for distribution of prizes and awards to the students. Purchase of gold was application of funds and not investment of funds. 5. We have heard the submissions made by representatives of both sides. We have also perus....
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....ed the orders of the authorities below. It is an admitted fact that the firm of the managing trustee, M/s. Sri Vekkaliamman Builders had carried out the construction of building of the trust. It is also an admitted fact that the aforesaid firm had earned a benefit of Rs. 17.30 lakhs from the aforesaid contract. Aperusal of section 13(1)(c) would show that the Act puts restriction on the use of income or any property of the trust directly or indirectly for the benefit of any person referred to in sub-section (3) of section 13. The relevant extract of section 13(3) is reproduced hereinbelow : '13 (3) The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following, namely :- (a) the author of the trust or the founder of the institution ; (b) any person who has made a substantial contribution to the trust or institution, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds fifty thousand rupees ; (c) where such author, founder or person is a Hindu undivided family, a member of the family ; (cc) any trustee of the trust or manager (by whatever....
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....earned by the firm is 4.28 per cent. which is quite reasonable. For the reasons stated in the order of the Tribunal reproduced hereinabove, the present issue in appeal of the Revenue is dismissed. 7. The third issue raised by the Revenue is with regard to advances made by the assessee to M/s. SAMS Pvt. Ltd. The Departmental representative has pointed that the assessee has advanced huge sums to M/s. SAMS Pvt. Ltd., as fee for the services. The said advances were not adjusted and were still outstanding in the books of M/s. SAMS Pvt. Ltd., as on March 31, 2011. The stand of the assessee is, it is using infrastructure facilities of M/s. SAMS Pvt. Ltd., for providing maritime courses to its students. The assessee is using infrastructure facilities without payment of any charges. The advance paid is to be adjusted against the charges for using facilities. The assessee has not given any reason as to why the amount advanced to M/s. SAMS Pvt. Ltd., has not been so for appropriated towards charges for using infrastructure facilities. As per the contentions of the Revenue, Rs. 1.94 crores are outstanding as on March 31, 2011 towards fee for services. The findings of the Commissioner of Inco....