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TMI Blog2015 (11) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... ithapatham was ₹ 2,22,74,985. If these two accounts are jointly considered, there is no question of any benefit to the trustees. In our opinion, these arguments of the learned authorised representative are farfetched. Each trustee has to be considered independently and distinctly. In the present case, there is a transfer of funds to one of the trustees' benefit, Shri S. Kunjithapatham, who is the proprietor of Mahalakshmi Garments Exports. In our opinion, the expression person used in section 13(1)(c)(ii) includes a person, who is the trustee. Thus, the amounts are transferred to Shri S. Kunjithapatham for his benefit and the outstanding balance in the name of Smt. Mahalakshmi Kunjithapatham cannot be clubbed together with fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned assessment year and disallowed all the capital expenditure. Against this, the assessee went in appeal before the Commissioner of Income-tax (Appeals). 3. On appeal, the Commissioner of Income-tax (Appeals) observed that the Assessing Officer while observing the peak debit balance as on October 8, 2009 against the trustee, Shri S. Kunjithapatham's proprietorship concern, had failed to appreciate the steady and long standing credit balance of ₹ 20,30,000 in the name of Shri S. Kunjithapatham in the books of account of the trust. Apart from the above credit, wife of Shri S. Kunjithapatham was also having a credit balance of ₹ 2,22,74,985 in the trust. Therefore, the funds of the trust has not flown to the trustee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the fact that the peak debit balance was worked out based on the above opening balance and the same credit balance of ₹ 20.30 lakhs had already been considered by the Assessing Officer. Further he submitted that the Commissioner of Income-tax (Appeals) has erred in holding that Smt. Mahalakshmi, wife of Shri S. Kunjithapatham has also funded ₹ 2 crores to the trust. Hence, if the funds are consolidated, there is no violation under section 13(1)(c) of the Act. According to the learned Departmental representative, the Commissioner of Income-tax (Appeals) ought to have appreciated the fact that the transactions between the trust and the trustees are to be viewed independently with each trustee for the purpose of determining vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is no violation of section13(1)(c) of the Act. 6. We have heard both sides and perused the material on record. In this case, the funds have been transferred from the assessee-trust to the accounts of Mahalakshmi Garments Exports, wherein Shri S. Kunjithapatham is the proprietor. The peak debit balance in the books of account of the trust as on October 8, 2009 was at ₹ 20,98,480. According to the learned authorised representative, the outstanding balance due to one of the trustees, Smt. Mahalakshmi Kunjithapatham was ₹ 2,22,74,985. If these two accounts are jointly considered, there is no question of any benefit to the trustees. In our opinion, these arguments of the learned authorised representative are farfetched. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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