9911796707
TMI Blog2019 (10) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... double exemption for the very same amount, which cannot be the intention of the statute. Since the assessee has already claimed exemption towards the cost of asset as application of income, in our view, the assessee cannot take support of the decision rendered in the case of Janmabhumi Press Trust [ 1995 (8) TMI 2 - KARNATAKA HIGH COURT] to claim exemption on account of repayment of loan taken for acquiring the above said asset. CIT(A) has omitted to consider above said factual aspects and hence we cannot sustain his order passed on this issue. Accordingly, we set aside the order passed by Ld CIT(A) in all the three years on this issue and restore the addition made by the AO in all the three years. Sale consideration received on sale of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sposed of by this common order, for the sake of convenience. 2. The assessee herein is a public charitable trust registered u/s 12A of the Act as well as u/s 10(23C)(via) of the Act. The returns of income filed for AY 2008-09 and 2009-10 were processed u/s 143(1) of the Act. The assessment for assessment year 2010-11 was completed u/s 143(3) of the Act on 27-12-2012. The AO noticed that the assessee has claimed "repayment of loans made during the year" as application of income in all the above said three years. The AO noticed that the loan taken by the assessee was not shown as receipts of the trust nor the same is reduced from the operating expenses or capital expenditure. Accordingly the AO took the view that the above said claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al gains as computed u/s 45 to 55A. For this purpose, the Ld CIT(A) relied upon the decision rendered by the co-ordinate bench in the case of Al-Ameen Educational Society (ITA No.575 (B)/2011). 7. The first issue relates to the claim of repayment of loan as application of income. The Ld D.R submitted that the assessee had already claimed the 'cost of capital assets' purchased out of loan proceeds as "application of income" in the earlier years, when the said assets were purchased. Hence the repayment of loan taken for acquiring very same asset would result in double deduction of same item. He submitted that the various case laws relied upon by Ld CIT(A) would be applicable only in cases, where the cost of capital asset was not allowed as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he third proviso, referred above, reads as under:- "Provided also that the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or subclause (v) or sub-clause (vi) or sub-clause (via)- (a) applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent of its income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years; and (b) ….. The provisions of Section 11(1) also requires that the income derived fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. In fact, the assessee would be entitled to exemption in view of the judgement oof Hon'ble jurisdictional High Court in the matter of Janmabhoomi Trust (supra), as and when the loan is repaid to the financial institutions. In view thereof, if the claim of the assessee that the borrowed funds were utilized for the objects of the trust, is entertained and accepted at this stage, it would tantamount to double benefit which cannot be the intention of the statute. In view thereof, we find that the CIT(A) erred in allowing the claim for acquisition of capital assets from the borrowed funds…." 12. In the case before the co-ordinate bench, the assessee sought exemption of cost of assets acquired out of borrowed funds. The said clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the co-ordinate bench, it could not be intention of the Statute. 14. In the instant appeals, it is the case of the AO that the cost of assets acquired out of loan funds have been claimed by the assessee as application of income in the years in which those assets were acquired. In that case, if the assessee is allowed to claim exemption again on repayment of loan taken for acquiring the very same asset, then the same would result in double exemption for the very same amount, which cannot be the intention of the statute. Since the assessee has already claimed exemption towards the cost of asset as application of income, in our view, the assessee cannot take support of the decision rendered by Hon'ble Karnataka High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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