TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 527
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....eciation and recording of facts in this regard. The appellant is also at liberty to place reliance on such additional material having regard to the circumstances. The appeal is partly allowed in the above terms. There shall be no order as to costs." 2. Accordingly, the issues which are required to be examined are whether the assessee has claimed depreciation in any of the previous years and whether the loan money was shown to have been utilized for acquisition of the assets. 3. The facts in brief of the case as culled out from the order of the lower authorities and statement of facts submitted by the assessee are that the assessee is a society registered under the Societies Registration Act vide registration dated 05/10/1940. The assessee was engaged in carrying out the scientific and industrial research in applied sciences. The return of income was filed declaring nil income on 30/09/2008. The Assessing Officer noted that assessee has shown income derived of Rs. 34,29,70,551/- and application of income thereof and thus claimed the taxable income as nil. 4. The statement of computation of total income filed by the assessee alongwith the return of income is reproduced as under: ....
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.... characterization of various solvents and cleaning agents to be used by the electronic industry under Technology Services Revolving Fund (TSRF) constituted by the International Bank for Reconstruction and Development (World Bank), International Development Association (IDA) and the Government of India and final disbursement received by the assessee in March 1996. The final amount disbursed was Rs. 125 millions due to increase in exchange rate of dollar. The repayment made during the year under consideration of Rs. 170 lakhs was toward this loan. The said loan was interest-free in nature and amount was paid towards the principal amount. It was observed by the Assessing Officer that: (i) the assets purchased out of the loan amount were already treated as application of income (ii) that the repayment of loan, which is interest free is again being claimed by the assessee showing the same as application of income (iii) that the said loan has not been considered as income and accordingly not included in the total income of the previous year in which the loan was received. 6. The assessee relied on the circular No. 100(F.No. 195/1/72-IT (A-I) dated 24.01.1973 of the Central Board o....
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....ion of Hon'ble Supreme Court in the case of Escorts Ltd. vs. Union of India, 199 ITR 43 and in the case of Laxmilpat Singhania vs. CIT [1969] 71 ITR 291, wherein, double deduction has not been allowed in the consideration of justice and equity. So, AO has relied on the ratio of the above mentioned two judgments of the Hon'ble Supreme Court so as to make an addition of Rs. 1,70,00,000/-. In this regard before me Id. AR of the appellant relied on the judgment of the Hon'ble Delhi High Court in the case of D1T (Exemption) vs. Span Foundation reported at 178 Taxman 436 (Mad.). I have gone through the facts of the case and in my considered opinion reliance on the case of Span Foundation is distinguishable on facts due to following reasons:- 1) In case of the appellant, loan has been found to be interest free whereas there is no mention about the interest in the case of Span Foundation. 2) The case of appellant is that appellant has taken loan from World Bank for strengthening activities of Material Science and Analytical Chemistry, Environmental Protection etc., whereas, case of Span Foundation pertains to repayment of borrowed fund for construction of building. 3) In the case ....
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....rom the lease of the property for charitable purposes. The Tribunal noted that as and when the loans are discharged and the assessee becomes free to utilize the rental income, it would apply the same for charitable purposes set out in the trust deed and that it is at that juncture that the Assessing Officer could insist that the application of the income be for the purposes mentioned in the trust deed. The Tribunal concluded that the repayment of the funds borrowed for construction of the building was to be treated as application of income for charitable purposes and held ITA Nos.767/08 & 789/08 Page No.4 of 5 that the assessee was entitled to the benefits under Section 11 and 12 of the said Act. 4. As regards the benefit being derived by interested persons, the only question that was of relevance was whether the rents paid by the so-called interested persons were adequate or not? In this regard, the Tribunal remanded the matter to the Assessing Officer to decide the question of adequacy in accordance with law, after affording the assessee an opportunity of being heard. However, while doing so, the Tribunal noted its earlier decision in the case of Rabhubir Saran Charitable Trust....
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....iance to the direction of the Hon'ble Court, which is necessary for disposal of this appeal and, therefore, we admit these additional evidences under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963. We also find that the learned Departmental Representative was allowed sufficient time to go through those evidences, however, she did not raise any objections in respect of reliability of those evidences. 14. From the facts of the case, we find that loan under reference was sanctioned in the year 1990 and final amount of disbursement of the loan was received by the assessee company in March, 1996. On perusal of the statement of income filed for the assessment years 1992-93 to 1999-2000 during which the loan was received by the assessee, we find that apparently the loan under reference received from World Bank has not been shown as income in any of the year concerned. Further, we find from the statement of total income that the cost of fixed assets acquired during the relevant years has been claimed as application of income. In the note appended to depreciation chart for the assessment year 1992-93 enclosed along with the balance sheet and profit and loss account, it is menti....