TaxTMI 
TaxTMI 
2017 (11) TMI 638
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...., the order, dated 31.12.2010, having been passed by the Commissioner of Income Tax(Appeals) without affording adequate opportunity of being heard to the appellant, is violative of the principles of natural justice and is, therefore, illegal and bad in law. 2. That the Commissioner of Income Tax(Appeals) erred on facts and law in upholding the action of the assessing officer in denying the benefit of exemption uls. 11 and 12 of the Income Tax Act, 1961 ('the Act') on the ground that the appellant had made payment to specified persons within the meaning of Sec. 13(3) in violation of Sec. 13(1)(c) of the Act. 2.1 That the Commissioner of Income Tax(Appeals) erred on facts and law in upholding the finding of the assessing officer that payment of salary of Rs. 16,20,000/- to Mrs. Malvika RaiJa.J1tamounts to payment to specified persons within the meaning of Sec. 13(3) in violation of Sec. 13(1)(c) of the Act, despite the fact that the payment made to her was towards he services rendered. 2.2 That the Commissioner of Income Tax (Appeals) erred on facts and in law in observing that the appellant had failed to justify that the salary payment to Mrs. Malvika Rai was commen....
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....nce the appellant did not refund the same, suo moto, the appellant was running on commercial principles. 7. While computing income of the appellant as a business entity after denying exemption under sections 11/12 of the Act, the Commissioner of Income Tax (Appeals) erred on facts and in law in: (a) affirming the action of the assessing officer in making ad-hoc addition of repairs and car maintenance expenses amounting to Rs. 7,09,468/- on the round that no log book was maintained by the appellant. (b) failing to appreciate that simply because no log book was maintained by the appellant, could not lead to the conclusion that the cars were not used for charitable purposes. 8. While computing Income of the appellant as a business entity after denying exemption under sections 11/12 of the Act, the Commissioner of Income Tax (Appeals) erred on facts and in law in: (a) affirming the action of the assessing officer in disallowing scholarship expenses of Rs. 13,35,905/- paid to Ms. Aarti Rai. (b) affirming the action of the assessing officer in disallowing salary of paid to Mrs. Malvika Rai. 9. While computing Income of the appellant as a business entity after denying....
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....tated in the assessment order. No details of the remand report against the submission of the assessee has been stated in the order passed by the Ld. CIT(A). 4. The appellant craves to add, to alter or amend any ground of appeal raised above at the time of hearing." 5. The following are common and identical grounds raised in Revenue's Appeals for the assessment year 2009-10 & 2010-11:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing violation of provisions of section 2(15) and 13(1)(c) of the Income Tax Act, 1961 and thereby availing the benefits of exemptions u/s. 11 & 12 without considering the fact stated by the AO and giving reasons for the same. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made on account of salary paid to Ms. Malvika Rai, which is excessive in nature and not commensurate to her education, experience and duties and has been paid to the related party as she is chairperson of the trust. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the exemption u/s. 13(3) of the Income Ta....
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.... in cross appeals before the Tribunal on some of the issues mentioned in their respective appeals. 6. Ld. Counsel of the assessee has filed a copy of Synopsis in support of his arguments and relied upon the decisions mentioned in the Synopsis and also the decision of the Hon'ble Supreme Court of India in the case of Charanjiv Charitable Trust vs. DIT(E), New Delhi reported in [2014] 52 taxmann.com 243 (SC), and he decision of the Hon'ble High Court of Delhi in the case of CIT vs. Text Hundred India (P) Ltd. reported as (2011) 197 Taxman 128 (Delhi). For the sake of convenience, we are reproducing the Synopsis submitted by the Ld. Counsel of the Assessee as under with regard to ITA No. 1142/Del/2011 (AY 2007-08) (Assessee's appeal) :- "The appellant seek to place on record synopsis in supplement to the arguments addressed during the course of hearing before the Hon'ble Bench. Facts in brief are that the appellant is a charitable trust settled vide Trust Deed dated 1.02.2001 for the predominant charitable object of imparting education. The appellant-trust was initially declared/setup in the name of 'Ram Krishan Kulwant Rai Charitable Trust' and subsequently, the name of the....
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....iscussed infra). Since the impugned order(s) have been passed without affording adequate opportunity of being heard, the appellant filed application for admission of additional evidences) before the Hon'ble Bench on 2nd March, 2017. b) The assessing officer also alleged that the appellant violated the provisions of section 13(1)(c) of the Act on account of payment of remuneration and scholarship to Ms. Aarti Rai, without affording any opportunity of being heard to the appellant, in violation of principles of natural justice [Issue specifically raised vide grounds of appeal Nos.3 to 3.2]. c) The assessing officer, while making addition on account of refundable security deposit, proceeded to draw adverse inference on the basis of details available on record, without affording any opportunity of being heard to the appellant [Issue specifically raised vide ground of appeal No.6] It is submitted that on account of the aforesaid violation of principles of natural justice, the impugned orders passed by the AOI CIT(A) alleging violation of provisions of section 13(1)(c) of the Act and affirming the addition of refundable security deposit is illegal and bad in law. In the af....
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....ce, the Tribunal can pass an order to that effect." (emphasis supplied) * Your Honour's kind attention in this regard is also invited to the decision of the Hon'ble Delhi High Court in the case of CIT v. Virgin Securities & Credits (P) Ltd.: 332 ITR 396-(Del), wherein 'the High Court held that the CIT(A) may admit additional evidence, after obtaining a remand report from the assessing officer, if the evidence sought to be adduced by the appellant is crucial to the disposal of the appeal. The relevant observations of the Court are as under: "8. The, aforesaid contention appears to be devoid of any merit. It is a matter of record that before-admitting the additional evidence; the CIT (A) had obtained 'remand report from the AO. While submitting his report, the AO had not objected to the admission of the additional evidence, but had merely, reiterated the contentions in the assessment orders. It is only after considering the remand report, the CIT (A) had admitted the additional evidence. It cannot be disputed that this additional evidence was crucial to the disposal of the appeal and had a direct bearing on the quantum of claim made by the assessee. Plea of the ....
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....agement programs in collaboration with the University of Bradford, U.K. She is also chairperson of the academic council of IILM-UBS. Mrs. Malvika Rai is regularly involved in the interaction with various academicians, educationists, Vice Chancellors and faculties of several Universities and Management Institutes of USA , UK and other countries, with a view to upgrade the level of providing education in the various educations institutions of which she is a part. Furthermore, it is respectfully submitted that Mrs. Malvika Rai, after completing her Graduation from Jesus & Marry College, Delhi University, has been actively involved in the field of education for more than 2 decades. That apart, Mrs. Malvika Rai is amongst the few Indian women, who have pioneered the cause of education in the Country. Mrs. Malvika Rai has also launched a primary school and vocational training centers, namely, "Roshni", for the socially & economically backward section of the society in Lodhi Institutional area, New Delhi. Mrs. Malvika Rai was awarded the Indira Gandhi Priyadarshini award for the year 1996 as acknowledgment of her services to the nation and society." The CIT(A) however decided the is....
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....tted that the aforesaid senior faculty members of the appellant were getting almost equal salary/ remuneration. It was further submitted that the aforesaid persons were merely looking after a particular institution, whereas Mrs. Malvika Rai, being Chairperson of the appellant, was responsible for all the institutions run by the appellant. In view of the aforesaid profile/ roles and responsibilities and contributions/ services of Mrs. Malvika Rai, it was submitted that the aforesaid salary paid to her was very much justified and not at all unreasonable/ excessive and cannot, in any manner, be considered as giving of any undue benefit by the appellant. It may also be pertinent to mention here that the CIT(A) did not take into consideration the aforesaid details/ information filed by the appellant, during the appellate proceedings, to substantiate the fact that Mrs. Malvika Rai had actually rendered services to the appellant. The CIT(A) has, however, observed that the appellant was unable to show that the salary paid was commensurate with the educational qualification of Mrs. Malvika Rai. In this regard, it is respectfully submitted that the only requirement in law is that th....
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....s 1995-96 and 1996-97. The following question has been posed: "Whether, on the facts and in the circumstances of the case and in law the Tribunal was correct in allowing the benefit under section 11 of the Income Tax Act, 1961 without appreciating that the assessee had violated the provisions of section 13(I)(c) and 13(1)(d) of the Act?" 2. We find that the Commissioner (Appeals) decided in favour of the assessee on all aspects in the revenue's appeal for the assessment year 1995-96. The Tribunal affirmed conclusion of the Commissioner (Appeals) with the following observations: "We have considered the rival submissions and the materials on the file. We are of the view that on the facts and in the circumstances of the case and for the detailed reasons given in the impugned appellate order, the ld. CIT(A) was justified in holding that the assessee was entitled to exemption under section 11 of the Act for the assessment year 1995-96. As noted above, the) assessee is a registered society under section 12A(a) of the Act. It is providing services in the field of family planning, family welfare, birth control, etc. It was in existence since 1981 and it was allowed exemption u....
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.... - ITO vs. Virendra Singh Memorial Shiksha Samiti: (2009) 18 DTR (Luck) 502 (refer paras 17 and 18) - Dr. D.Y. Patil Pratisthan: (2014) 61 SOT 48 (Pune) (refer paras 35 - 37) - ITO v. Human Resource Development and Management Trust: (2011) 47 SOT 85 (Cuttack) (refer para 23) * On perusal of the aforesaid, it is respectfully submitted that merely because payment is made to persons specified in section 13(3), it cannot be alleged that there is violation of section 13(I)(c) of the Act. The onus is on the assessing officer to show how the remuneration! payment made is excessive and reasonable. * Pertinently, the CIT(A) in the appellant's own case for assessment years 2008-09 and 2009-10 held that there is no violation of section 13(1)(c) of the Act, after taking into consideration the entire material! evidences placed on record: - CIT(A) for AY 2008-09 - refer pgs. 1-31 of PB of Case Laws @ 17-22,31 CIT(A) for A Y 2009-10 - refer pgs. 32-37 of PB of Case Laws @ 36-37 * It is also pertinent to note that even the assessing officer, in the impugned order, disallowed added remuneration to the extent of Rs. 2,25,000 out of remuneration of Rs. 16,20,000. Further, the....
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.... institution, for a minimum period of 5 years after completion of their studies abroad, at reduced salary which would be decided by the Director of the Institute. B. Scholarships to Employees/Faculties for Higher Studies Scholarships are given to the employees of the appellant who intends to pursue higher studies from abroad, Such scholarships are provided subject to the condition that these employees would serve the institution, after completion of their studies abroad, under either of the following two alternatives: Alternative- I : : To serve the institution for a minimum period of 5 years at 50% salary as compared to the market norms Alternative -II To serve the institution at an Honorarium of Rs. 10,000 per month for at least 3 years. In the present case, Ms. Aarti Rai, it is respectfully submitted, was sent abroad for pursuing higher education under Alternative-II (supra). After completing her studies abroad, she worked Honorary for the appellant. On perusal of the aforesaid, it will be kindly appreciated that the aforesaid scholarship paid to Ms. Aarti Rai is very much justified and not at all unreasonable/ excessive and cannot, in any manner, be considered....
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....i Rai. Re: Grounds of Appeal Nos. 4 to 4.2 In the assessment order, the assessing officer observed that during the year under consideration the net profit as per income and expenditure account was Rs. 4,75,83,039/- and gross income of Rs. 9,82,41,290/- meaning thereby that net profit was 48.43% of the gross income. Similar observation has also been made with regard to the profitability of the immediately preceding assessment year 2006-07. In this regard, it is submitted that while coming to the aforesaid conclusion, the assessing officer failed to notice. that -the appellant, in fact, applied 92.83% of its income for charitable purposes during the year under consideration (refer page 52 of the paper book). Kind attention is further invited to the following table reproduced in the order of the CIT(A) for assessment year 2008-09 to demonstrate the position of actual surplus after taking into consideration various capital expenditure incurred by the appellant:- A.Y. Total income Application towards revenue purposes Application towards capital purposes Total application of income spent %of total amount actually 2006-07 86,043,803 39,240,739 58,856,879 98,097,61 11.....
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....ritable Trust (No.1): 186 ITR 728 (All.) * Hiralal Bhagwati vs. CIT: 246-ITR 188 (GJlj.) * Gaur Brahmin Vidya Pracharini Sabhavs .. CIT: 129 TTJ 627 (Del) [refer pg. 211-220 @219 of case law PB] * Indo American Society vs. ADIT: 96 ITD 61 (Mum.) [refer pg. 221- 225 @224 of case law PB] * St. Don Bosco' Educational Society V. CIT: 84 TTJ 805 (Luck) [refer pg. 233-239 @239 of case law PB] The CIT(A), while confirming the findings of the assessing officer, however, observed as under: "11.4 The submissions given by the appellant has been perused. It is to be seen that net profit rate has to be calculated according to common business parlance where application towards procurement of fixed assets are not to be considered. In the case of CIT vs. Queen Educational S?ciety [2009] 177 Taxman 326 (Uttarakhand), it was held that the society was not entitled to exemption under section 1O(23)(iiiad) as there was surplus in its account books after meeting all expenses incurred towards imparting education and it had invested said surplus in fixed assets like furniture and buildings with a view to expand institution and to earn more income. * On perusal of the aforesaid, it....
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....tted that the AO/ CIT(A) further failed to appreciate that even -assuming {without admitting) that there was violation of section 13, then too, there was no-warrant to deny complete exemption under sections 11/12 -and the exemption should have been denied only to the extent of expenditure/ income to the extent of alleged violation under section 13 of the Act, for the reasons elaborated hereunder.- * Section 13 of the ACJ spells out certain circumstances in which. the exemption provided under sections 11/12 will not be available. Further section 164(2) and 164(3) of the Act reads as under: "[(2) In the case of relevant income which is derived from property held under trust wholly for charitable or religious purposes, or which is of the nature referred to in, sub-clause (iia) of clause (24) of section 2. or which is of the nature referred to in sub-section 4A) of section 11, tax shall be charged on so much of the relevant income as is not exempt under section 11 or section 12, as if the relevant income not so exempt were the income of an association of persons: Provided that in a case where the whole or any part of the relevant income is not exempt under section 11 or sectio....
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...., shall be charged at maximum marginal rates of tax only on that part of income which has forfeited exemption. Thus, where the trust contravenes the provisions of section 13(1)(c) or (d) of the Act, the maximum marginal rate will apply only to that part of the income which has forfeited exemption. * Further, the language of section 13(1)(c) and (d) also supports this view which provides to exclude from the total income, 'any income thereof' which as a whole or in part has forfeited exemption. Thus, on a conjoint reading of section 13(1) and section 164 of the Act, it may be observed that taxability of the income of an organization forfeiting exemption under section 13(1)(c) or 13(1)(d), shall be charged at maximum marginal rates of tax only on that part of income which has forfeited exemption. Thus, where the trust contravenes the provisions of section 13(1)(c) or (d) of the Act, the maximum marginal rate will apply only to that part of the income which has forfeited exemption. Further, the language of section 13(1)(c) and (d) also supports this view which provides to exclude from the total income, 'any income thereof' which as a whole or in part has forfeited exem....
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....er section 11 would not be available only to the extent of application of income or property for the benefit of person referred to in section 13(3) of the Act. The same could not, however, the Tribunal further held, result in total denial of exemption under section 11 of the Act. The pertinent observations of the Tribunal read as under: "8. We have considered the rival submissions. Section 13 operates as an exception to section 11 of the Act. Section 13 treats only the difference between the adequate rent chargeable for the building and the actual rent charged by an assessee as attracting the provisions of section 13 of the Act. In other words, the benefit of section 11 could not be available only to the extent of application of the property or income of the trust directly or indirectly (or the benefit of persons referred in sub-section(3) of section 13 o[the Act. The benefit of section 11 could not be totally denied. The question that arises for consideration is as to whether the rent charged by the assessee from its sister concern was adequate rent "( emphasis supplied). Further appeal preferred by the Revenue against the aforesaid decision of the Tribunal has been dismisse....
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....nguishable on facts inasmuch as in that case the assessee advanced substantial amount for purchase of land which was subsequently cancelled and such cancellation was recorded in the books of the assessee after considerable time. In these facts the Hon'ble High Court held that the assessee violated the provisions of section 13(1)( c) of the Act; b) Secondly, it is pertinent to note that Hon'ble Supreme Court has been pleased to admit SLP filed by the assessee against the aforesaid decision of the Hon 'ble High Court, which is reported in 228 Taxman 58 (SC); c) Thirdly, the Hon'ble High Court has not taken into consideration its earlier decision in the case of Span Foundation (supra) wherein the Hon'ble Court affirmed the decision of the Tribunal holding that in case of violation of section 13, entire exemption under section 11 of the Act cannot be denied; d) Fourthly, the Hon'ble High Court has not considered CBDT Circular No. 387 dated 6.7.1994 {supra) wherein it is clearly noticed by the Board that if the Trust contravene the provision of section 13(1)(c) of the Act, marginal rate of tax shall apply only to that part of the income which is exempt. ....
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....l 35,60,524 Less: Miscellaneous income shown 1,18,537 Understatement of income 34,41,987 The assessing officer, failed to appreciate that debit in the student security account aggregating to Rs. 22,75,226, which has been treated as income, were, in fact, repayment! adjustment out of the student security amount. The assessing officer further failed to appreciate that the deposits for the batches 2001-04 and 1999-2002 represented refundable security deposit from various students and grossly erred in holding that the appellant failed to explain the source of such deposits. Since the entire amount is refundable by the appellant, in .view of the legal obligation upon the appellant, even security deposit relating to students who have left the school cannot be recognized- as income of the appellant as such students could claim the security deposit at any time after leaving the school. * The CIT(A) held that although the appellant's 'obligation to - refund-the above security deposits exist, but since the appellant did not refund the same, suo-motu, the appellant was running on commercial principles. * The aforesaid observations of the CIT(A) are contradictory and wi....
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.... submitted that there is no bar in the charitable trust owing cars for its officials, like Dean, Professors and other faculty. It needs to be appreciated that officials, like Dean, Professors and other faculty are highly qualified people, commanding huge respect and substantial demand in the education sector. To attract and retain good faculty, it is thus, necessary for the appellant to make available good resources for discharging official duties. * The CIT(A) apart from upholding the findings of the assessing officer also held that since no log book was maintained by the appellant, it is therefore inferred that the same has been used by the trustees of the appellant for their personal benefit. In this regard, it is submitted that the aforesaid expenses were incurred in respect of the cars owned by the appellant. The said cars were utilized by officials of the appellant in order to discharge various official duties. It is further submitted that the aforesaid cars are being used wholly & exclusively for the purpose of running the school and, therefore, no separate log book is being maintained by the appellant. In view of the aforesaid, the action of the AO in disallowing 5....
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....ly College at Lodhi Road. Apart from the aforesaid, the assessee was also contemplating setting up institute under the name and style of "IILM Academy of Higher Leaning" at New Town, Kolkata and also 'IILM Institute of Higher Education at Lodhi Road, New Delhi'. * For the purpose of setting up the institute at New Town, Kolkata, the assessee purchased land from West Bengal Housing Infrastructure Development Corporation Limited (WBHIDCO) admeasuring about 5 acres for total consideration of Rs. 1 0.89 crores and out of the same, the assessee paid Rs. 2.72 crores. * In the assessment order, the assessing officer mixed the aforesaid two separate and independent transactions of payment for purchase of land for its own purpose and payment of loan to RKSCT and incorrectly held that the assessee had made payment of Rs. 2.72 crores to WBHIDCO, Kolkata for acquisition of land in the name of IILM Academy of Higher Learning being run by RKSCT. * As stated above, the aforesaid, for thepurpose of setting up institute in the name of IILM Academy of Higher Learning" at New Town, Kolkata the assessee purchased land from WBHIDCO and paid Rs. 2.72 crores; the said amount was not at a....
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....ein it has been consistently held that giving of loan one charitable trust to another charitable trust amounts to application of income for charitable purposes- DIT(E) vs. Pariwar Sewa Sansthan: 254 ITR 268 (Del.) [refer pages 38 - 39 of Paper Book of case laws]. DIT (E) vs. Acme Educational Society: 326 ITR 146 (Del.) [refer pages 373 - 377 of Paper Book of case laws- II]. * It may also be pertinent to mention here that donations given by the assessee to RKSCT in the earlier years has been allowed as application of income in the assessee's own case in earlier assessment years, which has also been affirmed by the Hon'ble Delhi High Court [refer pages _ - _ of Paper Book of case laws- II]. * Reference may also be made to the following decisions wherein it has been consistently held that donation given by one charitable trust to another charitable trust tantamount to application of income for charitable purposes: - CIT vs. Thanthi Trust: 239 ITR 502 (SC), - CIT vs. Hindustan Charity Trust: 139 ITR.913 (Cal.) - CIT vs. Shri Ram Memorial Foundation : 269 ITR 35 (Dei.) '.' - DIT (E) vs. Bagri Foundation: 233 CTR 538 (Del.) - CIT vs. Nirmala Bakubh....
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.... deciding maximum and minimum no. of trustees. As per clause 8 of the trust deed, he also has the powers to appoint chairman of the Board of trustees and 7nted himself as the 'Chairman'. ii) Smt. Malvika Rai is wife of Shri Anil Rai s/o Shri Kulwant Rai. She is, therefore, falls under catgory of 'specified persons' u/s 13{3}. iii) Ms. Aarti Rai is daughter of Shri Anil Rai and Smt. Malvika Rai. She is, therefore, falls under category of 'specified persons' u/s 13{3}. iv) As per clause 30 of the trust deed, no expenditure outside India is allowed without prior approval of CBDT. v) No approval (prior or otherwise) has been taken for spending the trust money for payment of fee of Ms. Aarti Rai to London School of economics and stay charges at London(UK). 2. There was attempt to conceal the vital information regarding spending the trust money for payment of fee of Ms. Aarti Rai to London School of economics and stay charges at London(UK).It is evident from the following: i) As per P&L alc, these expenses are booked under heading as 'Other Expenses' (Schedule- N)(ref. page # 46 PB). The Schedule-N puts it under sub-head 'Scholarship ....
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....at Kolkata. 6. As regards to employment and remuneration to Smt. Malvika Rai and Ms. Aarti Rai and scholarship to Ms. Aarti Rai, it is submitted that even providing employment and selecting for any kind of scholarship, in today's scenario is a benefit. It is not the case of the assessee that these employment and scholarship were provo ed by open competition. 7. Regarding remuneration, there is no whisper of any specific service rendered by Smt. Malvika Rai or Ms. Aarti Rai. No Resolution or any other document is produced showing any requirement of the posts held by them and job profile and suitability of the incumbent. 8. In fact, the post occupied by Smt. Malvika Rai (Chairperson IILM-ref: page 3 4 of PB) not attached to any institution run by the trust. Therefore, it has to be held within the trust only. No justification, whatsoever or supporting documents in form of need of the post and resolution for creation and filing of the said post is produced. The trust has chairman and other trustees to look after the affairs of the trust. As per the trust deed their services or supposed to be without any remuneration. (ref: clause 28 of the trust deed- page #9 of PB). 9.....
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....ust has also been placed either before AO as well as Ld. CIT(A). It is futile exercise on the part of the assessee to justify the benefit given to the persons specified u/s. 13. If the conscience of the assessee was clear then why it had not disclosed this fact in the audit report. Hence, there is a clear cut violation of the provisions of section 13 and accordingly, AO as well as Ld. CIT(A) has rightly denied the benefit of section 11. We note that scholarship given to Ms. Aarti Rai has been incurred in foreign currency and has been paid in UK i.e. to say the application of money has taken place outside India. For claiming exemption u/s. 11 the application of funds has to take place within India. Otherwise the approval of the Board is required which can grant exemption on the facts of each case. Thus in any case this income has not been applied in India and therefore not exempt. Further the trust is also hit by the provision of Section 13(1)(c). In view of the above, we are of the considered view that action of the Ld. CIT(A) in upholding the action of the AO in treating the scholarship given to Ms. Aarti Rai, as being in violation of provisions of section 13(1)(c) of the Act is c....
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....t adjudicating the alternative ground raised by the assessee is concerned, as we have alreadyup the action of the Ld. CIT(A) in the preceding paragraphs that there is clear cut violation of section 13 and hence, the assessee was rightly denied the benefit of exemption u/s. 11& 12 of the Act. In view of the above, this ground is also decided against the assessee. 7.6 Apropos ground no. 6, relating to affirming of addition of Rs. 34,41,987/- out of refundable security deposit of the students is concerned, we find that AO observed that the assessee has not been refunding the security deposit taken from the students which in many cases go back to assessment years between 1999 to 2002. Since the assessee has not refunded the security deposit therefore he treated the amount which was still in possession of the assessee as its income under the head miscellaneous income. It is true that the liability to refund the money does not cease and it is obligatory on the part of the assessee to return the money which is lying with it in the form of security deposit, hence, the same cannot be regarded as income of the assessee. But the fact remains that this attitude of the assessee in not returnin....
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.... we uphold the same and reject the ground raised by the assessee. 7.10. The ground no. 10 relating to confirming imposition of interest u/s 234B and 234C of the Act is concerned, we find that this issue consequential in nature, hence need not be adjudicated. 7.11 In the result, the ITA No. 1142/Del/2011 (AY 2007-08) stands dismissed. ITA NO. 1214/DEL/2011 [2007-08] (REVENUE'S APPEAL) 8. With regard to issue relating to granting of relief to the assessee trust in r/o the payment of Rs. 2.72 crores for purchase of land for Ram Krishan & Sons Charitable Trust (RKSCT) and advancing of interest free loan of Rs. 2.19 crores to RKSCT while the fact is that the said fund has clearly been diverted to another family Trust & therefore is violation u/s. 13(3) of the I.T. Act is concerned, we note that AO observed that during the year the assess has advanced a sum of Rs. 2.72 crores for allotment of land at New Town Kolkatta allotted by West Bengal Housing Infrastructure Development Ltd. (WBHIDCO). However, the allotment letter was not in the name. of the appellant. It was further seen that IILM Academy of Higher Learning was the actual beneficiary of this loan advanced to WBHIDCO and that....