2014 (1) TMI 485 - AT - Income Tax

Exemption u/s 11 Property purchased in the name of President of society The property is reflecting as assets in the books of society - Held that - There was nothing on record to prove that the legal title over the land has been transferred to the assessee - The CIT(A) on considering the deed dt. 10/06/2004 evidencing the donation of land by the assessee to M/s Divine Charitable Trust and the gift deed executed by the President came to the conclusion that the assessee after paying the sums to its President has become owner of the property - Facts are not clear whether the aforesaid evidences were produced before the AO during the assessment proceeding for his consideration Also these documents have not been placed before us The matter was restored for fresh examination of documents.

Summary

Issues:
- Delay in filing appeals
- Claim of exemption u/s 11 of the Act
- Transfer of legal title of land
- Interpretation of documentary evidence

Delay in filing appeals:
The judgment addressed a delay of 52 days in filing the appeals, which was condoned by the tribunal after hearing the learned DR. The appeals were admitted for adjudication despite the delay.

Claim of exemption u/s 11 of the Act:
The primary issue in the case was the allowance of the assessee's claim of exemption u/s 11 of the Act by the CIT(A). The department contested the claim, arguing that the payment made by the assessee to its President for the purchase of land was in violation of section 13(1)(c) of the Act. The AO denied the exemption, stating that the legal title over the land was vested in the name of the President, not the society. However, the CIT(A) accepted the assessee's contentions, emphasizing that the land was acquired for the society's purpose, shown as an asset in the balance sheet, and subsequently donated to a charitable trust.

Transfer of legal title of land:
The tribunal noted conflicting views between the AO and CIT(A) regarding the ownership of the land. While the AO doubted the transfer of legal title to the assessee, the CIT(A) concluded that the society had become the owner of the property based on documentary evidence. The tribunal, lacking clarity on whether these documents were presented to the AO during assessment, remitted the matter back to the AO for reevaluation, instructing a thorough consideration of all evidence.

Interpretation of documentary evidence:
The tribunal highlighted the importance of documentary evidence in determining ownership rights over the land. It emphasized the need for all evidence to be considered by the AO in deciding the claim of exemption u/s 11 of the Act. The judgment underscored the significance of presenting all relevant documents for a comprehensive assessment of the case.

In conclusion, the tribunal allowed both appeals of the revenue for statistical purposes, remitting the issue back to the AO for fresh consideration in light of the documentary evidence and ownership claims presented by the parties.