TaxTMI 
TaxTMI 
2023 (10) TMI 29
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....without appreciating the facts and findings of the AO. 3. The Revenue craves to add, alter, amend, modify, substitute, delete and/or rescind all or any Grounds of Appeal on or before the final hearing, in necessity so arises." 3. The brief facts of the case are that the assessee is a Trust which has been granted approval under Section 12A of the Act since 14.02.1975. For the year under consideration, the assessee filed it's return of income on 30.09.2016 declaring total income at Rs. Nil, which was arrived at after offering gross total income of Rs. 27,29,67,560/- and applying the income of Rs. 11,54,77,014/- for the purposes specified under Section 11 of the Act, setting apart the income of Rs. 3,28,65,435/- (12.04% of gross total income) and an amount of Rs. 12,50,00,000/- being the amount accumulated or set apart for the specified purpose as per Section 11(2) of the Act and subject to conditions specified therein. During the course of assessment, the Assessing Officer observed that from the balance sheet it can be seen that the assessee has made an investment of Rs. 1,04,05,558/-in gold which is not an investment in the modes prescribed in Section 11(5) of the Act. The assess....
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....ion 13(1)(d) of the Income tax Act, 1961 . The exemption claimed by the Assessee u/s. 11 is hereby disallowed u/s 13(1)(d) of the Income tax Act. The assessee is involved in the charitable activities as well as religious activities. ...... 6. In view of the above facts and material available on record, it is observed that assessee is not liable for any exemption u/s. 11 & 12 of the I.T. Act, 1961 as it has violated the Section 11(5) of the I.T. Act, 1961. Therefore, the Trust is treated as AOP and its whole exemption is hereby disallowed/denied. Thus, the amount of Rs. 3,28,65,435/- claimed as accumulated or set apart u/s. 11 is added to the income of assessee and also the amount of Rs. 12,50,00,000/- claimed as amount accumulated or set apart for specified purposes as per Section 11(2) is disallowed." 4. In appeal, Ld. CIT(Appeals) allowed the appeal of the assessee by observing that during the course of appellate proceedings, the assessee has given complete breakup of additions made by the assessee to gold ornaments amounting to Rs. 1,04,05,558/- which shows that the assessee had purchased gold and silver along with silver bullion which were used for preparation of various g....
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....ai Tribunal in the case of Venkaliamman Educational & Charitable Trust(supra) and contended that in the past, the practice of purchasing gold and silver, receiving donation of these two precious metals was verified in the earlier assessment orders for A. Yrs. 2004- 05, 2006-07, 2007-08, 2012-13 and 2014-15 and therefore, according to the principle of Res Judicata as laid down by the Hon'ble Supreme Court in the case of Excel Industries 358 !TR 295(SC), the A.O. ought to have accepted the explanation of the appellant in this regard and let the matter rest rather than pursue litigation for the sake of it. c) It has also been contended that the A.O. has wrongly relied on, the cases of Hon'ble A.P. High Court and Delhi High Court wherein it had been held that the entire surplus is taxable in view of the provisions of section. 13(1)(d) of the Act in the given set of facts and the AO. has' ignored the binding decision of the Hon'ble Jurisdictional High Court in the case of Orpat Charitable Trust reported at (2015) 55 Tamann.com 211(Gujarat). . d) The status of the appellant ought to have been adopted as that of "Trust" and not the "AOP" as held by the A.O. in the impu....
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....m No.16A for making TDS from labour charges, accounting treatment given to this specific transaction, past settled history on this issue etc., the A.O.'s finding in resorting to section 11(5) r.w.s. 13(1)(d) of the Act is totally baseless, irrelevant and not based on any independent inquiry made so as to ascertain that the appellant had purchased the gold and silver in raw form i.e. in the form of bullion, bars, coins, biscuits etc. to be kept as an investment without further processing. Therefore, the disallowances made of Rs. 3,28,65,425/- claimed as accumulated or set apart u/s 11 of the Act and also the amount of Rs. 12,50,00,000/- claimed to be set apart as per provisions of section 11(2) of the Act are directed to be deleted. The ground nos. 1,2 & 3 of the appeal are accordingly allowed. The A.O. is also directed to adopt the status of "Trust" and not an A.O.P. for the purpose of working the tax liability of the appellant trust. 6. Vide the ground no. 4, the appellant has contested charging of interest u/s 234B of the Act. Charging of interest is mandatory in nature. Accordingly, no interference is called for in the charging of interest. This ground of appeal is therefo....