TaxTMI 
TaxTMI 
2020 (3) TMI 543
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....ing long term capital gains. Brief facts of the case are that the assessee is a Hindu religious charitable institution, for the relevant assessment year 2010-11, the assessee sold the immovable properties situated in Nellore and has not filed any return of income. Therefore, the Assessing Officer (AO) issued notice u/s 148 on 28.03.2017 and in response to which, the assessee filed a letter stating that there was no taxable income by way of long term capital gains. Subsequently, the assessee filed the 'Nil' return of income on 23.08.2017 and the AO issued notice u/s 143(2) dated 04.10.2017, taking up the case for scrutiny. 3.1. As discussed earlier, the assessee sold the immovable property consisting of 3 plots for a consideration of Rs. 40,99,200/- and the market value of which as per the SRO was Rs. 67,41,740/-. During the assessment proceedings, the assessee submitted that the assessee had received the property by gift from previous owner and the cost of land received by way of gift was unascertainable, hence, there was no incidence of long term capital gains. The assessee has taken support from the decision of Hon'ble Supreme Court in the case of B.C.Srinivasa Setty (1981) 128....
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.... the registration. In the instant case, the AO was of the view that the assessee's Trust has no specific activity before the Trust's objects are reduced in writing in 2016 vide Trust Deed dated 28.04.2016. Thus viewed that even if it is considered that the proviso to section 12A(2) of the Act is applicable retrospectively, in the absence of specific objectives before 2016, the benefits of proviso to section 12A(2) cannot be extended to the assessee. 4.2. The third ground on which the assessee's request for exemption was denied under section 11(1A). The AO observed that the consideration received was deposited in subsequent assessment year, therefore the assessee is not entitled for exemption u/s 11(1A) of the Act, as per CBDT Circular No.883 dated 24.09.1975. 4.3. With regard to assessment of capital gains and the adoption of fair market value as per section 50C, the AO held that since, the decision of B.C.Srinivasa Setty (supra) has no application, capital gains required to be computed adopting the SRO value of Rs. 67,41,740/-. Accordingly the AO taken the SRO value of Rs. 67,41,740/- and reduced the indexed cost of acquisition amounting to Rs. 6,47,673/- being the market value ....
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....he earlier years also and there was no changes in the activities. Therefore, argued that both the lower authorities have erred in giving a finding that there were no specific activities prior to 28.04.2016, hence submitted that rejection of assessee's claim for exemption of income u/s 11 and 12 for the assessment year is unjustified merely because there was no written deed though the activities were carried out by the assessee. 9. With regard to exemption u/s 11(1A), the assessee filed evidence in the form of copies of fixed deposit receipts made in Andhra Bank dated 08.03.2010 for deposit of Rs. 25,00,000/- and also certified copy of Dhanalakshmi bank, wherein the assessee has made the deposit of Rs. 16,04,400/- on 09.03.2010 and argued that it has made the deposits in the same financial year in which the property was sold and argued that AO has denied the exemption on mistaken impression that the deposits were made in the subsequent year, hence, requested to treat the deposit amount as utilization of sale proceeds as provided in Board Instruction No.883 dt.24.09.1975. 10. With regard to computation of capital gains and adoption of the provisions of section 50C, the Ld.AR argued....
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....same activity which was written in the Trust Declaration dated 28.04.2016, hence, there is no case for rejection of the assessee's contention for extending the benefits of exemption u/s 11 and 12 for pending assessment as provided u/s 12A(2) of the Act. Though the assessment year related is 2010-11, as on the date of granting the registration, the assessment for the impugned assessment year was pending. This Tribunal has taken a view in the case of Ganta Sri Ram Educational Society and held that the assessee would be eligible for exemption u/s 11 and 12 for pending assessments as on the date of registration. For the sake of clarity and convenience, we extract para No.6 of the order cited supra which reads as under : "6. In the instant case, the assessee is carrying on educational activity and entitled for registration u/s 12A. Commissioner of Income Tax has granted the registration u/s12A. The fact that the assessee is carrying on educational activity and entitled for registration u/s 12A is not disputed by the department. The objects of the Trust are for the charitable purpose within the meaning of section 2 of sub section 15 of the I.T.Act. The assessee has applied for exemptio....
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....eriod of six months and above would be regarded as utilized for acquiring another capital asset within the meaning of section 11(1A) of the Act. Since the assessee has made the investment in fixed deposits for more than 6 months in the same financial year, we hold that the assessee is entitled for exemption of sale consideration u/s 11(1A) of the Act and the same required to be considered as for acquiring another capital asset. Accordingly, the orders of the lower authorities are set aside and the appeal of the assessee on this issue is allowed. 14. The next issue is related to application of 50C for sale consideration of the immovable property. In the instant case, the assessee has sold the property consisting of 3 plots for sale consideration of Rs. 40,99,200/- and the market value of which was Rs. 67,41,740/-. In the earlier paragraphs, we have decided that the assessee's income is entitled for exemption u/s 11 and 12 of the Act. Having decided that the assessee's income is exempt u/s 11 and 12 of the Act, the assessee's income required to be computed as provided in section 11 to 13 of the Act, but not under other provisions of the Act. Therefore, we agree with the contention o....