TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 648
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....came into existence being constituted on 28/08/1948. Partners of the business in HLI are also known as "Hamdard Dawakhana (Wakf)". They dedicated the said business to charity. Hamdard National foundation (India) ("HNF") ("the assessee") was setup as a charitable trust in 1964 with the main objects of running educational and medical institutions/providing medical relief, namely, as a special purpose vehicle to effectuate the charitable activities of HLI in the areas of relief to the poor, education and medical relief. Hamdard Dawakhana (Wakf) as a charitable institution has been enjoying the benefits of section 11 and 12 of the Income-tax Act, 1961 ("the Act") and also exemption under section 10(23C)(iv) of the Act. The assessee enjoyed the benefit of sections 11 and 12 of the Act all the while till the assessment year 2007-08, but in the year assessment year 2007-08 the learned Assessing Officer rejected the claim for exemption under section 11 and 12 of the Act to the assessee for the years 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13 and 2013-14 on the ground that there had been a violation of the provisions of section 13(2)(b) of the Income Tax Act, 1961 (for short "the....
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....ct from one HSN Reality Services and CB Richard Ellis South Asia private limited. 7. Ld. CIT(A), on consideration of the material available on record and in the light of the submissions made on either side, observed that the onus to prove the basis for the addition was on the learned Assessing Officer; that the examination of the facts reveal that such a onus was not discharged by the Revenue because the learned Assessing Officer was completely misdirected by placing the onus on the assessee; that the assessing officer had acted entirely on the basis of information on the Internet without confronting the assessee with any evidence and that also under legal notion that something which was in the public domain need not be confronted to the affected party; that the learned Assessing Officer having accepted that there was no mechanism with the Department to undertake "valuation of rent" should not have applied the provisions under section 13 of the Act entirely on surmises and conjectures without the existence of evidence including the so-called collaborative evidence; that the property at Asaf Ali road was tenanted to HLI as far back as in the year 1981 with a periodical increase in ....
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....is available on Internet and can also be accessed from the Internet which is a public domain and the Department has no method to have valuation of rent done independently by any government agency. 10. As a matter of fact, in the order for the assessment year 2008-09, Ld. CIT(A) dealt with this aspect in detail and recorded a finding that the learned Assessing Officer cannot say that the information collected by him has already been in the public domain and not obtained behind the back of the assessee, inasmuch as the Assessing Officer is duty bound to confront the assessee with such information if it is to be used against the assessee in any proceedings. CIT(A) further found that it is an admitted fact that the property of the assessee at Asaf Ali Road was tenanted to Hamdard Wakf as far back as in the year 1981 with a periodical increase in the rent and in numerous assessments framed under section 143(3) of the Act, the Assessing Officer accepted the agreement between the parties finding no ground to invoke the provisions of section 13(2)(b) of the Act/13(3) of the Act; whereas the property at Chanakya Puri was not even prepared during the assessment year 2008-09 and was lying va....
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....8,11,619/- which was increased every three years, namely, by 2009-10, it was Rs. 20.64 Lacs as against the valuation of MCD Rs. 18,11,619, by 2011-12 it was Rs. 63.13 lakhs and by 2014-15 it was Rs. 90.96 Lacs as against Rs. 21.47 lakhs and Rs. 25.37 lakhs respectively in respect of the Asaf Ali road property. Likewise, the rent received by the assessee in respect of Chanakya Puri property was Rs. 18 Lacs, Rs. 19.8 lakhs, Rs. 37.61 Lacs, and Rs. 54.24 Lacs by 2006-07, 2010-11, 2011-12 and 2014-15 respectively as against the corresponding MCD value of Rs. 1.80 Lacs, Rs. 1.80 Lacs, Rs. 8.74 Lacs and 10.48 lakhs respectively for such years. 14. Moreover, the lease agreement in question was executed on 16/7/1982 in respect of Asaf Ali road property and also for this period this agreement was accepted in the same set of facts and circumstances without raising any objection. It is submitted on behalf of the assessee that, the assessee gave property on rent to another charitable trust which perhaps has given the same to its directors so should there be anything to be charged to tax that has to be charged to tax in the hands of such other charitable trust or the director, but in any case ....
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....s of the assessee without first clinching the issue with corroborative piece of evidence. We therefore, hold that there is no justification for addition made by the learned Assessing Officer by invoking the provisions under section 13(2)(b) of the Act read with section 13(3) of the Act and we direct him to delete the same. 17. Ground No. 6 relates to the alternative ground taken by the assessee before the Ld. CIT(A) stating that in the event that exemption is not allowed, a sum of Rs. 9,43,81,000/- has to be excluded from the taxable income. 18. Ld. CIT(A), on this aspect, observed that as per the definition of 'income' as contained in section 2(24)(iia) of the Act, income includes voluntary contributions received, and further the said voluntary contributions are not included in total income by virtue of the provisions of section 12(1) of the Act which deems such contributions to the income derived from property held under the trust. According to him, once the provisions of section 11 are not applicable, such contributions have to be charged to tax in terms of section 164(2) of the Act and on this premise, Ld. CIT(A) rejected the contention of the assessee for exclusion of Rs. 9,....
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....n on ground No. 1 that the exemption under section 11 cannot be denied to the assessee by invoking the provisions of section 13(2)(b) of the Act read with section 13(3) of the Act and also in the light of the order of the Hon'ble High Court, would not find any merits and the contentions of the Revenue. We, accordingly, dismiss ground No. 2 of the appeal. 25. Coming to the Cross objection preferred by the assessee in Cross Objection No 464/Del/2012, it is submitted by the Ld. AR that depending upon the answer to the grounds of Revenue's appeal, the answering of the grounds in C.O. would be academic. Since we dismiss the Revenue's appeal in ITA 4789/Del/2012, we find that the discussion in this Cross Objection would only be academic in nature. Recording the same, we dismiss the Cross Objection. 26. Accordingly revenue's appeal in ITA No.4789/Del/2012 and Cross Objection No.464/Del/2012 of the assessee are dismissed. ITA No. 5411/Del/2012 (2009-10). 27. Only issue involved in this appeal is relating to the denial of the exemption under section 11 of the Act to the assessee by invoking the provisions under section 13(2)(b) of the Act read with section 13(3) of the Act and such an i....
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....ssion, a reference is made by the Ld. AR to paragraph numbers 62 and 63 of the order dated 18/9/2015 in the case of HLI vs. ACIT in WP (C) 3599/2012 and batch of cases. 31. In the above case, the Hon'ble jurisdictional High Court dealt with the aspect of the objects of the assessee and vide paragraph numbers 62 and 63 observed, thus,- "62. Turning now, to examine the nature of HNF's objects, this Court finds that they are identical to those of Hamdard, and the Revenue's contention to the contrary is without any merit. Textually, HNF's objects and "functions‟ would indicate that HNF only has the additional objective of receiving, controlling and supervising the income received from Hamdard and any other body and applying it for the purposes enumerated thereafter, which are identical to clauses 44 to 47 of Hamdard's Trust Deed. The fact that they have been classified under two different heads, viz. "objects‟ and "functions‟ is immaterial, as it is only a matter of form and does not alter the manner of application of donations received by HNF. 63. The DGIT(E) in the impugned order dated 21.08.2013 as well as in the affidavit on record admits that HNF‟s....
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....tion 13(3) of the Act and such an issue has been dealt with in extenso in ITA 1640/Del/2019 and it was held in favour of the assessee. Following the same, we uphold the findings of the Ld. CIT(A) and dismiss this ground of appeal. 33. The third ground of this appeal relates to the addition of Rs. 24 crores being the "corpus donations" received by the assessee from HLI by subjecting the same to tax. Ld. CIT(A) deleted the same as consequent to the grant of exemption under section 11 of the Act. While placing reliance on the decision of a coordinate Bench of this Tribunal in the case of Patanjali Yogpeeth (Nyas) vs. ADIT (2017) 185 TTJ 1, it is argued by the Ld. AR that the donations received by the assessee towards corpus fund are not liable to tax. 34. We have gone through the record in the light of the submissions made on either side. Facts of this case are quite similar to the facts involved in the case of Patanjali Yogpeeth (Nyas) (supra) wherein it is held that in the absence of any allegation or proof as to the assessee undertaking any activities in the nature of trade, commerce or business, donations received by the assessee forms part of the corpus of trust and thus capita....
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....- 12 before the Ld. CIT(A), Ld. CIT(A) observed that the facts are identical to the Assessment Year 2010-11 in which a factual finding was given to the effect that the scholarships were not restricted to a particular religious community and there is no violation of the provisions of section 13(1)(b) of the Act in this year also. 39. When a factual finding of Ld. CIT(A) was accepted for the Assessment Year 2010-11, and such a finding was confirmed by the Ld. CIT(A) on similar set of facts and circumstances for the Assessment year 2011-12, we find every force in the argument of the Ld. AR that it is not open for the Assessing Officer to raise such an issue selectively for few years and accept the findings of the first appellate authority for some years. Further, Revenue failed to establish before us as to how the findings of the Ld. CIT(A) on this factual aspect are incorrect for this Assessment Year 2011-12 by placing the material that was available before the Assessing Officer to reach a conclusion that the provisions under section 13(1)(b) of the Act are applicable to the facts of the case. In the absence of any such collaborative piece of material, we find it difficult to distur....