9911796707
TMI Blog1989 (5) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as Act for brief). 2. We have heard the learned representatives on both sides. 3. A few facts first. The assessment of the assessee corporation providing passenger transport in the State of Andhra Pradesh, for the assessment years 1967-68, 1968-69 and 1969-70 was completed on 28-9-71, 30-11-71 and 31-1-72 determining the total income at Rs. 38,56,175, Rs. 99,67,650 and Rs. 83,67,343 respectively. Initially the assessee's claim seeking exemption u/s 11 of the Act was not accepted. However, the matter when taken to the High Court of Andhra Pradesh and the assessee succeeding on 23-11-1971 in a reference proceedings in Andhra Pradesh Road Transport Corpn. v. CIT [1975] 100 ITR 392 (AP) which decision was also affirmed by the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of I.T. Act as per asst. order 28-9-1971 Rs. 39,01,684 (including interest on securities & C.G) Income as per P & L account Less : Int. on Securities (including Int. on Securities & C.G) Rs. 21,25,950 Excess Rs. 17,75,734 Less : 1. Payment of compensation made to Private operators which was added as capital but which is disputable and may be in order so far as commercial principles are concerned 62,586 2. Amounts written off not allowed in the asst. order. 35,560 3. Payment of fine disallowed in assessment order. 64,090 -------------------- 1,62,236 4. Contribution to Gratuity Fund : The assessee through its letter dt. 23-3-85 stated that contribution to other funds also should be allowed as it is statutory under Road Transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of by sub-sec.( 3) of sec. 11 of the Act. In support of his contention reliance has been placed on a decision of Calcutta High Court in CIT v. Birla Education Trust [1985] 21 Taxman 134. 9. Having considered the matter very carefully we are of the view that the case of the assessee does not call for the initiation of any action u/s. 11(4) of the Act. The Income-tax Officer has only tried to apply this provision to application/expenditure of income by the appellant trust, which does not conform to the provisions of law which aspect is amply taken care by sub-sec. (3) of sec. 11 of the Act which deals with any income not applied to Charitable or religious purpose or where such income ceases to be accumulated or set apart for application to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sec. 11 because they represent application of income wholly for charitable or religious purposes. 16. Here, the ITO has to scrutinise the accounts and see if there is suppression of income or manipulation of accounts with a view to conceal income. He could see whether there are items which are deemed to be income under some provision of the Act and which have not been accounted for in the books of undertaking, or there may be some receipts which are really in the nature of income and which have not been reflected in the accounts. This interpretation of sub-section (4) of section 11 is in consonance with the legislative intent as disclosed by the Finance Minister, who spoke in the Parliament while this provision was under consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounts to find out that the income shown in the books is the correct and has not been more. That was the only safeguard that has been provided by the sub-clause'. " 12. From the aforesaid it is clear that the provisions of sub-sec. (4) of sec. 11 of the Act have not been appreciated by the authorities below in their proper perspective. On facts not an iota of allegation has been made much less brought out to say that there has been any manipulation of account books or attempt to evade tax on the part of the assessee in the cases before us. The learned Departmental Representative also could not bring to our notice any different judicial view. 13. That being so the assessee have to succeed in both the sets of appeals. The Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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