TaxTMI 
TaxTMI 
2018 (6) TMI 1099
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....joys the registration u/s 12A and is a notified society u/s 80G of the Act. 4. The assessee entered into an agreement with Delhi Public School Society ['DPSS' for short] on 17.02.2012 by which the DPSS and the assessee jointly agreed to set up a school at Raj Nagar. One Nirbhay Realtors [P] Ltd ['NRPL' for short] acquired land at Raj Nagar Extension, Ghaziabad and leased out the said piece of land to the assessee for a period of 30 years extendable by another 30 years. The assessee entered into a Memorandum of Understanding on 03.09.2012 by which the assessee had to deposit with NRPL an amount equivalent to the cost of the land towards interest free refundable security deposit as a cost to NRPL and in lieu of this security deposit, NRPL agreed to lease the land to the assessee. The assessee constructed school building on the said piece of land and started running a school in the subsequent period. It was agreed that the assessee shall pay lease rent of Rs. 2000/- p.m. from the first academic year of operation of school at Raj Nagar Extension. 5. The bone of contention is the amount of Rs. 5.53 crores paid during the year by the assessee to NRPL as interest free deposit. The r....
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.... any benefit to NRPL. The ld. AR pointed out that NRPL purchased the said piece of land from the funds made available to it by Pacific Development Corporation Ltd and not by the assessee. The ld. AR strongly contended that NRPL has acquired the land from its own funds and, thereafter, leased out the said piece of land to the assessee-society. Therefore, no benefit has been passed on to NRPL by making interest free security deposit for the leasehold land. 10. Per contra, the ld. DR strongly supported the findings of the revenue authorities and once again relied on the decision of the Hon'ble High Court of Delhi in the case of Chiranjiv Charitable Trust [supra]. 11. We have given thoughtful consideration to the orders of the authorities below. There is no dispute in so far as the transaction with NRPL is concerned. Admittedly, NRPL is a specified person and the same has been accepted by the assessee during the course of assessment proceedings itself. Facts on record show that the assessee society has paid a total sum of Rs. 11,02,73,500/- to NRPL till 31.03.2014, break up of which is as under: Paid upto 31.03.2013 Rs. 5,48,75,500/- Paid during the year Rs. 5,53,....
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....69 Priyanka Arora - R 9/110 Rajnagar Gzb., Lata- R-6 Flat No. 4 33259677 2366100 35625777 05- 06-2012 06-08-2012 4 851 407 1.2569 12569 15032.52 Prashant, Manoj, Vimla, Pramod, Subodh, Nitin, Sushila, Vijay, 67648005 5045700 72693705 27 06-2012 16-11-2012 Total Acres 3.1931 7.8870 31931 38189.48 149248819 11895156 1611439 75 14. From the above chart, it can be seen that two purchases were made in F.Y. 2012-13 pertaining to A.Y 2013-14 and as mentioned elsewhere, no adverse inference has been drawn during that year. After taking the lease rights, the assessee constructed the school building and started running a school as per MOU entered into with DPSS. 15. On appreciation of facts on record, we are of the opinion that the assessee has not passed on any benefit directly or indirectly to the specified person NRPL. Firstly, by paying a meagre lease rent o....
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....n adequate; (f) if any share, security or other property is sold by or on behalf of the trust or institution to any person refer- red to in sub- section (3) during the previous year for consideration which is less than adequate; (g) 1 if any income or property of the trust or institution is diverted during the previous year in favour of any person referred to in sub- section (3): Provided that this clause shall not apply where the income, or the value of the property or, as the case may be, the aggregate of the income and the value of the property, so diverted does not exceed one thousand rupees;] (h) if any funds of the trust or institution are, or continue to remain, invested for any period during the previous year (not being a period before the 1st day of January, 1971 ) in any concern in which any person referred to in sub- section (3) has a substantial interest." 17. A perusal of the aforesaid relevant provision shows that even the legislature allows transactions with specified persons if the same are at arms length. 18. It is not the case of the Revenue that the assessee has not started operation of the school on the leasehold land. I....