TaxTMI 
TaxTMI 
2022 (3) TMI 565
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....eals pertain to the same assessee and issues involved are, inter-alia, common, therefore, these appeals were heard together as a matter of convenience and are being adjudicated by way of this consolidated order. Further, as the basic facts in all the appeals are same, we have elaborately mentioning only the facts for the first assessment year (i.e. 2011-12) before us for the sake of brevity. However, if any particular issue is arising in any assessment year for the first time, facts pertaining to same are discussed accordingly. ITA no.1301/Mum./2018 Assessee's Appeal - 2011-12 3. In this appeal, the assessee has raised the following grounds:- "1. On the facts and under the circumstances of the case and in law, the learned CIT(A) has erred in denying exemption under Section 11 of the Income-tax Act, 1961 ('the Act') to the assessee by alleging violation of the provisions of Section 13(1)(d) and 13(2)(h) of the Act The Appellant prays that the benefit of Section 11 of the Act be granted to it as there is no violation under Section 13(1)(d) and 13(2)(h) of the Act. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not ac....
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....earned Assessing Officer has erred in levying interest under section 234D of the Act. The Appellant prays that the learned Assessing Officer be directed to delete the interest levied under section 234D of the Act. 9. On the facts and under the circumstances of the case and in law, the learned Assessing Officer has erred in reversing the interest received by the Appellant under section 244A of the Act and adding it to the total tax liability of the Appellant The Appellant prays that the learned Assessing Officer be directed to delete the interest reversed under section 244A of the Act." 4. Mr. Sukhsagar Syal, learned counsel appearing for the assessee, at the outset submitted that ground no.1, insofar as it pertains to violation of section 13(1)(d) of the Act, and ground no. 5 in assessee's appeal are not pressed. Accordingly, same are dismissed as not pressed. 5. The first issue to be decided in assessee's appeal is with regard to denial of exemption under section 11 to the assessee due to violation of provisions of section 13(2)(h) of the Act. 5.1 The brief facts of the case pertaining to this issue as emanating from record are: The assessee is registered as a Charitab....
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....ntal Representative (hereinafter referred to as "learned D.R."), appearing for the Revenue, vehemently relied upon the orders passed by the AO and the CIT(A). 5.6 We have considered the rival submissions and perused the material available on record. In order to decide this issue, it is relevant to analyse the provisions of section 13(2)(h) and Explanation-3 to section 13 of the Act. Section 13(2)(h) reads as under:- "Section 13- Section 11 not to apply in certain cases. (1).................... (2) Without prejudice to the generality of the provisions of clause (c) and clause (d) of sub-section (1), the income or the property of the trust or institution or any part of such income or property shall, for the purposes of that clause, be deemed to have been used or applied for the benefit of a person referred to in sub-section (3), - ............. .......... (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." Further, as per the provisions of section....
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..... as well as of the assessee trust at the time of investment, is nothing but conjectures/surmises which is not even supported by the statutory requirements of section 13(2)(h) read with Explanation 3 to section 13 of the Act. 5.8 We are in agreement with similar views expressed by SMC Bench of Tribunal in the case of J.R.D. Tata Trust v. The Income Tax Officer: ITAs No. 3082/Mum/2018 and 3154/Mum/2018. Further, reliance placed by the CIT(A) on the decision of the Co-ordinate Bench in the case of Jamsetji Tata Trust v. JDIT (Exemption): ITA No. 7006/Mum/2013 is completely misplaced. As in a recent decision in the case of Sir Dorabji Tata Trust v. DCIT (Exemption): ITA No. 3909/Mum/2019, the Co-ordinate Bench of the Tribunal held that observation made in the said decision of Jamsetji Tata Trust (supra) is a sweeping observation based on conviction rather than material available on record, as it observes that "As far as the violation of clause(h) of section 13(2) is concerned we find that the author of the assessee trust and its relative definitely have a substantial interest in the Tata Sons Ltd., therefore, the investment in the shares of Tata Sons Ltd. is clear violation of clause....
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....e Act or it is restricted to only the income derived from prohibited investments. 6.7 Similar issue arose for consideration before the Hon'ble Jurisdictional High Court in the case of Sheth Mafatlal Gagalbhai Foundation Trust(supra), wherein the Hon'ble Court observed as under: "........the Legislature has clearly indicated its mind in the proviso to section 164(2) when it categorically refers to forfeiture of exemption for breach of section 13(1)(d), resulting in levy of maximum marginal rate of tax only to that part of the income which has forfeited exemption. It does not refer to the entire income being subjected to maximum marginal rate of tax." Further, Hon'ble Jurisdictional High Court in the case of CIT v. Audyogik Shikshan Mandal: 261 Taxmann 12 held that on a plain reading of sections 11 and 13 of the Act, it is clear that the legislature did not contemplate the denial of benefit of section 11 of the Act to the entire income of the Trust. Following the decisions of Hon'ble Jurisdictional High Court, similar view was also expressed by the Co-ordinate Bench of the Tribunal in assessee's own case in ITAs No. 1317/Mum/2018 and 1299/Mum/2018 for the assessment year 2008-09....
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....C of the Act in the present case. The AO is directed to delete the interest levied under section 234C of the Act. Accordingly, ground no. 7 raised in assessee's appeal is allowed. 8. Insofar as ground nos. 6 and 8 in assessee's appeal are concerned, same pertains to levy of interest under section 234B / 234D of the Act. While ground no. 9 in assessee's appeal pertains to addition of interest received under section 244A of the Act. During the course of hearing, learned counsel submitted that all these grounds are consequential in nature. Thus, the AO is directed to compute the interest under sections 234B and 234D, if leviable, in accordance with law. Further, the AO may grant the interest under section 244A of the Act in accordance with law. Accordingly, ground nos. 6, 8 and 9 in assessee's appeal are allowed for statistical purpose. 9. In the result, appeal by the assessee being ITA No. 1301/Mum/2018 is partly allowed in terms of our aforesaid findings. ITA no.1316/Mum./2018 Revenue's Appeal - 2011-12 10. In this appeal, the Revenue has raised the following grounds:- "(i) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing exemption u/s.10....
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....t aside." 11. The first issue to be decided in Revenue's appeal is with regard to the claim of exemption under section 10(34) of the Act on dividend income received on shares by the assessee. 11.1 The brief facts of the case pertaining to this issue as emanating from record are: During the year under consideration, the assessee trust had received dividend income of Rs. 115,47,80,338 which was claimed as exempted under section 10(34) of the Act. 11.2 The AO vide order dated 18.03.2014 held that the assessee trust is not entitled to claim exemption under section 10(34) as assessee's entire income derived from the property held under trust is governed by the provision of section 11 of the Act. The AO further held that once there is violation under section 13 and as a result of same exemption under section 11 is denied, assessee cannot claim alternative exemption under section 10(34) because section 10(34) of the Act does not deal with income derived from property held under trust. 11.3 In appeal against the aforesaid disallowance, the CIT(A) vide order dated 18.12.2017 following the decision of Hon'ble Jurisdictional High Court in the case of DIT (Exemption) v. Jasubhai Foundation....
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....ation, assessee had claimed depreciation and also capital expenditure viz. addition to fixed assets in the computation of income. The AO vide order passed under section 143(3) of the Act rejected the claim of the assessee on the ground that same tantamount to double deduction. Firstly, by way of claiming the capital expenditure towards the purchase of the fixed assets and secondly by way of depreciation. Accordingly, the AO disallowed depreciation of Rs. 4,40,898 claimed by the assessee. 12.2 In appeal against the aforesaid disallowance, the CIT(A), inter-alia, following decision of Hon'ble Jurisdictional High Court in the case of CIT v. Institute of Banking Personnel Selection: 131 Taxmann 386 directed the AO to grant the claim of depreciation on fixed assets to the assessee. 12.3 Being aggrieved by aforesaid findings of the CIT(A), Revenue is in appeal before us. We find that on similar issue Hon'ble Supreme Court in the case of CIT v. Rajasthan & Gujarati Charitable Foundation Poona: 402 ITR 441, dismissing the Revenue's appeal against Hon'ble Jurisdictional High Court's decision rendered in ITA No. 1562 of 2012 vide order dated 28th January 2013, held that in case of charitab....
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....) to (iii) raised in Revenue's appeal are dismissed. 19. The next issue to be decided in Revenue's appeal is with regard to carry forward of excess application/ deficit to subsequent assessment year. 19.1 The brief facts of the case pertaining to this issue as emanating from records are: During the year under consideration, the assessee claimed deficit of Rs. 86,77,63,963 in the return of income to be carried forward to subsequent years being excess of expenditure over income earned during the year under consideration. 19.2 The AO vide order dated 05.03.2015 passed under section 143 of the Act held that there is no provision under section 11 of the Act under which the assessee can claim set off of excess expenditure incurred in earlier year against the income of the relevant assessment year. Thus, the loss / deficit of current year was not allowed to be carried forward for adjustment in subsequent years. 19.3 In appeal, the CIT(A) vide order dated 19.12.2017, inter-alia, following decision of Hon'ble Jurisdictional High Court in the case of CIT v. Institute of Banking Personnel Selection: 264 ITR 110 directed the AO to allow carry forward of the deficit as may be available. 19....
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....terest under section 234A of the Act. In view of the above, we deem it fit to direct the AO to carry out necessary verification whether the return of income was filed by assessee within time and levy interest under section 234A of the Act, in case of delay, in accordance with law. Thus, ground no. 2 raised in assessee's appeal is allowed for statistical purpose. 24. In the result, appeal by the assessee being ITA No. 2115/Mum/2018 is partly allowed. ITA no.2161/Mum./2018 Revenue's Appeal - 2013-14 25. The issues arising in present appeal for our consideration pertains to (i) claim of exemption under section 10(34) of the Act; and (ii) carry forward of excess application/ deficit to subsequent assessment year. 26. As all these issues are similar to Revenue's appeal for assessment year 2012-13, our findings/conclusion in Revenue's appeal being ITA No. 1314/Mum/2018 for assessment year 2012-13 shall apply mutatis mutandis to this appeal. 27. In the result, appeal by the Revenue being ITA No. 2161/Mum/2018 is dismissed. ITA no.2116/Mum./2018 Assessee's Appeal - 2014-15 28. The issues arising in this appeal for our consideration pertains to (i) denial of exemption under section 1....