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TMI Blog2017 (12) TMI 1682X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Revenue to prove that the main object of the assessee actually was giving loans and not providing education. Even the identical allegation of the Ld.DR vis-a-vis the entire group we find remains unproved since the table relied upon by the Ld.DR in support of its contention reflects only the loan given by the assessee and two other trusts of the group to M/s Baba Amarnath Trust. The same has already been explained by the Ld.Counsel for the assessee as having been given to lend financial support to the said Trust in the initial years of its setting up, which fact has not been controverted by the Revenue. Even otherwise it fails to bring to light how the entire group was involved in creating capital only. Even the reference to the transaction between Shiva Educational Trust and Sachdeva Building Contractors Pvt. Ltd. has no relevance to the issue, since as rightly pointed out by the Ld.Counsel for the assessee no disallowance/addition has been made on account of the same We hold that there was no basis at all for denying exemption to the assessee society u/s 10(23C) (vi) - Decided against revenue - ITA No.310/Chd/2017 (Assessment Year : 2013-14) - - - Dated:- 8-12- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 13(3) since M/s Baba Amarnath Educational Society was not a specified person as per section 13(3) of the Act. v) The assessee had not violated the provisions of section 13(1)(d) r.w.s 11(5) also since the advance was given for fulfillment of its object. vi) There was no merit in the contention of the Assessing Officer that the assessee was indulging only in giving loans and advances and building capital since the advance had been given in pursuance of its objects. 4. The Ld.CIT(Appeals) after considering assessee s submissions allowed the assessee s appeal deleting the entire addition made. 5. Aggrieved by the same, the Revenue has now filed the present appeal before us, raising the following grounds: 1. Whether on the facts and in the circumstances of the case the Ld. CIT( A) has erred in law while allowing exemption under section 10(23C)(vi) of the l.T.Act. of appeal on or before the date it is heard and disposed off. 6. We have heard the contentions of both the parties, gone through the orders of the authorities below and also carefully perused the documents to which our attention was drawn during the course of hearing before us. 7. The facts rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee is not education but creating capital by giving loans and advances to group societies and companies. Ld.DR drew our attention to the findings of the Assessing Officer at para (i),(ii) (iii) page 5 and 6 of the order as under: (i)Assessee has given unsecured loan to its sister concern without any consideration. Assessee is not taking any interest from these sister concerns, neither having any security against this, which shows that assessee is providing undue benefit to its sister concern (ii) Assessee has given unsecured loan to its sister concern for capital investments only, on perusal of Balance Sheet of Baba Amarnath, it is clear that this society has taken unsecured loan of Amount of ₹ 80 lakh/- for A.Y. 2013-14 investing the same in capital investments of ₹ 8 Crore. Capital Investments cannot be counted as educational purpose. This shows that assessee intention is only create the capital not the education. (iii) The below mentioned chart shows that the trustees group societies have modus operandi to provide the loans to group concerns invested the same in fixed assets. Details of Unsecured Loan (taken and given) in the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of Income from salary and interest from group societies or group companies, the same then invested into group societies as loan/advances. The above facts show that the group societies, group companies their trustees directors/shareholder have nexus between all of them for diversion of money from one hand to another hand under the umbrella of group concerns. This fact is also clear from the transaction between Shiva Educational Trust and Sachdeva Building Contractors Private Limited. In this the group society. Shiva Educational Trust has paid 33 lacs to its sister concern and group company- M/s Sachdeva Building Contractors Private Limited without adequate service. The agreement between both has made on a random figure, without thinking that is there any requirement of maintenance of building or not? 11. Per contra Ld. counsel for assessee drew our attention to the submissions made by the assessee before the Ld.CIT(Appeals) and pointed out therefrom that in the first place the said advance was not given in the impugned year at all but in fact pertained to assessment year 2011-12. The Ld. counsel for assessee stated that this fact is proved by a chart giving details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BHAWAN Versus ASST/Deputy COMMIISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, (2), PUNE 2013(2) TMI 579 ITAT PUNE DIRECTOR OF INCOME TAX (EXEMPTION) vs. ACME EDUCATIONL SOCIETY 326 ITR 146(Delhi) Income Tax Appellate Tribunal Chennai Society Of Daughters Of Mary Immaculate Collaborators Vs. Department of Income Tax on 4 July, 2012 ITA No.963/Mds/2012 15. Ld.Counsel for the assessee further stated that the above contentions of the Ld.DR was erroneous as pointed out by the assessee to the Ld.CIT(A) also at para 5 of his submissions made before him and reproduced at page 5 of the CIT(A) order as under: 5.That the assessment order is full of errors.Wrong and baseless facts have been presented to prove an imaginary nexus of some group societies,group companies,group trustees involved in entry scam disregarding the actual facts,nature of transactions among societies and their main activities at large. In fact there are four societies/Trusts ie. Amrtisar International Foundation Trust ( Assessee Trust ), Shiva Educational Trust, Baba Bhola Nath Educational Society and Baba Amarnath Educational society in which Sh. Hira Lai Sharma was a common member. All of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Foundation Trust, in which ₹ 3000000 shown given to Baba Amarnath Educational Society in the AY 2011-12 and shown as it is in the AY 201213 and 2013-14, where as other figures in the name of Amrtisar International Foundation is misreported. (Refer Page No. 67 of the paper book for Balance Sheet of Amritsar International Foundation Trust). Second chart relates to Baba Amarnath Educational Society is showing the details of loans taken by them from other three societies including assessee society and the common member Sh. Hira Lai Sharma. This chart is evident of the fact that only Baba Amarnath Educational Society, which was facing financial stagnancies in the initial stage of its establishment received loan from other societies trust and members and there is nothing on record to prove inter trustee members, inter societies or other transactions or distribution of funds among them as claimed by Ld AO in the assessment order. Further, during the assessment proceedings no ITR or Balance sheet of the members of the assessee trust or group society/trust called for to establish that the trustees are drawing salary and interest from group societies or group companies and same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, we find that the assessee had demonstrated by way of a detailed chart listing all relationships covered u/s 13(3), that M/s Baba Amarnath Educational Society is not a specified person as per the provisions of section 13(3) of the Act and the Revenue has not controverted the same. Ld.DR has merely reiterated the general and casual remarks of the Assessing Officer of establishing nexus between the assessee and M/s Baba Amarnath Educational Society by way of having one common member only or on account of indulging in transaction of giving loan to one another. Clearly, the Ld. DR has not pointed out as to how the above situations are covered u/s 13(3) to establish M/s Baba Amarnath Educational Society as a specified person, which is an exhaustive list, listing only the following as specified persons : a) author of the trust or founder of the institution b) persons who have made substantial contribution to the trust or institution i.e exceeding ₹ 50,000/- c) where the author, founder or person is a HUF, member of the HUF d) trustee of the trust or manager of the institution e) any relative of the aforesaid persons f) any concern in which aforesaid p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rati Educational Society, Ms. Bansal's allegation with regard to entry scam also does not survive. Consequently, there is no substantial question of law involved in the present appeal and accordingly, appeal is dismissed but with no order as to costs. 20. The said proposition has been reiterated by the Hon ble Delhi High Court in the case of CIT vs Indian National Theatre Trust (2008)305 ITR 149. Ld.Counsel for the assessee has also drawn our attention to a number of other decisions wherein it has been held that giving loans to other charitable institutions registered u/s 12A having similar objects are not in violation of the provisions of section 13(1)(d) read with section 11(5) of the Act. Ld. DR has not distinguished the case laws relied upon by the assessee. On the contrary, the reliance placed by the Ld.DR on the decision of the Hon,ble Madras High Court in the case of CIT vs V.G.P. Foundation, we find is based on different set of facts, since in that case the advance was given to sister concern with no finding that it was also a charitable society registered with the same objects as the donor, while in the present case the loan has been given by one society to ano ..... X X X X Extracts X X X X X X X X Extracts X X X X
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