TaxTMI 
TaxTMI 
2017 (3) TMI 205
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....le purpose under section 11 of the I.T. Act and the same was a clear violation of section 13(1)(c) of the I.T.Act, without coming to a positive conclusion that such repayment of loan is a "benefit" within the meaning of sec. 13(1)(c) read with section 13(2) of the I.T.Act? ii) Whether on the facts and in the circumstances of the case and in law the Tribunal has acted perversely in arriving at its finding that there is no material on record to substantiate the claim of the assessee trust that a sum of Rs. 8,54,26,519/- was the accumulated deficit of earlier years?" The undisputed facts are that the assessee is a trust duly registered under the Income Tax Act, 1961 whose objects are charitable in nature. For the assessment year under consideration the assessee filed return of income showing total income at nil. The trust did not file any return up to the assessment year 2002-03 since in June, 1980 search and seizure were conducted by the income tax authorities. In the month of June, 2003 they returned all the documents and bank account to the assessee. The first question relates to the claim of the assessee on account of repayments of loan. Mr. Banerjee, learned advoca....
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....as already been filed during the course of assessment. 2........... 3. Loans & Advances : During the course of assessment we have already filed the detailed list of advances amounting to Rs. 8,69,47,275.97 along with the confirmation from each of the loan creditor whom the trust had procured. Late Mrs. Anita Banerjee was one of the main loan creditors in the period between 1956 and 1993. It is worthwhile to mention here that after search & seizure conducted by the Income Tax Department in 1980 practically the entire activities of the trust became loan dependant only." The Assessing Officer in considering the information given, regarding the repayments of loan, held that the assessee had failed to submit the details relating to receipts of the loans since it was simply said that the loans were received during the period from 1956 to 1993 which was vague and without any basis. No return was filed before 2002- 03 on account of showing the utilization, nor books of accounts could be produced for the current financial year or earlier years. According to him this was nothing but transfer of trust funds to the trustees or their relatives in the pretext of repayments o....
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....e. The Assessing Officer had not undertaken any such exercise. In this case the appreciation of facts is based only on the evidence furnished by the assessee. It is not a case where the assessee did not disclose the identities of the persons who had given the loan and had received the repayments as claimed. The fact that the books and bank account of the assessee stood seized in the relevant period cannot be lost sight of in adjudicating whether the assessee had prima facie proved its claims. The Assessing Officer, however, had come to a finding that this was really transfer of trust funds to the trustees or their relatives, for their benefit, and hit by the mischief of section 13(1)(c). This was an adverse finding against the assessee. The Assessing Officer being an investigator and adjudicator, when coming to an adverse finding against the assessee, was required to record such finding adequately as duly supported by material and evidence taking into account that principles of preponderance of probabilities applies. He did not discharge his role of investigator by relying upon any material or evidence to support his adverse finding. We, therefore, answer the first question in t....
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....er year and the said expenses are adjusted against the income of a subsequent year, the income of that year can be said to have been applied for charitable and religious purposes in the year in which the expenses incurred for charitable and religious purposes had been adjusted. Similar view was taken in CIT vs. Shri Plot Swetamber Murti Pujak Jain Mandal. Following the above facts and circumstances of the case as elaborately discussed, I am of the considered opinion that the action of the A.O. is not justified. Hence the disallowance of Rs. 4,78,81,978/- is therefore deleted. The appellant succeed on this ground." The Tribunal while reiterating there was no material on record to substantiate the claim of the assessee that a sum of Rs. 8,54,26,519/- was accumulated deficit also said that admittedly such claim for accumulated deficit had not been determined in any assessment proceeding and therefore the claim was wrongly allowed by the CIT(A). Mr. Banerjee submitted that deficit incurred by a trust could not be treated in the same way as that of a loss sustained by an assessee under the head 'profits and gains of business or profession' for such deficit to be furnished in a ret....