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TMI Blog2020 (9) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... thout prejudice to the aforesaid grounds even if a violation of the relevant provisions was to be presumed, the AO at the most could have denied the benefit of the exemption u/ s 11 of the Act to the difference between the rent received and the market rent and not the entire income. 5. That the CIT(A) not only erred in by- passing the Principle of Consistency so ably followed by her predecessors, but chose not to agree with their orders for the assessment years 2008 -09, 2010 -11, 2011-12 & 2012 - 13 without adverting to any points of distinction. 6. The CIT(A) further erred in upholding the action of the AO in subjecting to tax the corpus donations which were in the nature of capital receipts irrespective of the Act whether exemption u/ s 11 of the Act was available or not. 7. That the CIT(A) erred in not deciding on merits Ground 2 and 4 in the Appeal. 8. That the CIT(A) further erred in not allowing the deduction on account of depreciation, donations and other outgoings which otherwise were available irrespective of the exemption u/ s 11." Lease Transactions: 3. Brief history and facts of the case are as under: The Hamdard Laboratories (India) (" HLI") came into exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of any material changes in the facts of the case and in the absence of any amendments in the Income Tax Act pertaining to the issues involved, the decision of the Co-ordinate Bench apply in toto to the issues raised before us. For the sake of brevity, the relevant portion of the said order is reproduced as under: " 5. Besides this, learned Assessing Officer recorded that the assessee paid a major portion of the scholarship amount to the students of a particular religious community and therefore there is violation of section 13 (1)(b) of the Act. We shall deal with these aspects hereunder. 6. Coming to the issue covered by grounds No. 1 to 5, namely, rejection of exemption under section 11 of the Act on the ground of violation of provisions under section 13(2 )( b) of the Act read with section 13( 3) of the Act, it could be seen from the assessment order for the assessment year 2007-08, during the scrutiny learned Assessing Officer found that the assessee received a sum of Rs. 46,41,028/- towards rentals received in respect of the property of the assessee. On enquiries, learned Assessing Officer came to know that the market rent of the properties at a Chanakya Puri and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submission on behalf of the assessee that right from 1981- 82 for about a period of 26 years, on the same set of facts, the rents received by the assessee in respect of the property at Asaf Ali Road, New Delhi has been accepted by the Revenue, that the rent between the parties had been increased from time to time, beginning from Rs. 20,000/- per month from 1981-82 and going up to Rs. 2 Lacs per 6 month in the period under consideration, that the rent received is higher than the annual lease value fixed by the Municipal Corporation of Delhi for the purpose of house tax, that the HLI to whom the property has been let out is also a charitable institution and enjoying the exemption under section 10(23C)(iv) of the Act/11 of the Act and even if the benefit is assumed, the same is not derived by any individual but by another charitable institution, the department had accepted all these years the agreement between the HNF and HLI without drawing any adverse view in all the assessments under section 143(3 ) of the Act; and that the " market rent" had to be determined with reference to the period of tenancy, the terms of lease, the area etc and not by referring to websites which may ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and make no guarantee, warranty or representation about it, requested the learned Assessing Officer to independently verify and confirm its accuracy and completeness. They are also specific in their statement that the information furnished by them does not represent the current or future performance of the market. Even on the face of the caveat mentioned above, it does not 8 seen from the record that the Assessing Officer did any independent exercise to verify the correctness or applicability of the information furnished by those two persons vis-à- vis the extent location and suitability of the property in dispute for its comparison to the market rates provided by those persons and also the information gathered from the website. 13. Further we have gone through the information furnished relating to the annual rent received in respect of these two properties in the light of the valuation as per the MCD and find that the rent received by the assessee is far above the valuation as per the MCD. According to section 6A of the Delhi Rent Control Act, 1958 the standard rent, or, where no standard rent is fixed under the provisions of such an Act in respect of any premises, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebut does not shift to the assessee. 16. We are, therefore, convinced with the reasoning given by the Ld. CIT(A) in his order for the Assessment Year 2008-09 wherein while dealing with this issue in detail, the Ld. CIT(A) reached a conclusion that on the date of the observations of the learned Assessing Officer that there is no mechanism with the Department to determine "valuation of rents" imperative the adjudicatory authorities to look further corroborative evidence in the absence of which it is not desirable to disturb the consistent view taken over a period of more than two decades. We are in agreement with the Ld. CIT(A) that not only on the basis of the rule of consistency but also on the basis of the facts relating to the rent received by the assessee from HLI vis-à-vis the rent under the Delhi Rent Control Act. Without vouchsafing the correctness of the information received from the website and without correlating the information furnished by the property dealers without realities on ground with a specific reference to the property in dispute, it is not open for the Assessing Officer to proceed to make addition, that disturbing the accepted position for about more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea does not arise and any discussion on this issue is only an academic one. We therefore dismiss this ground. 21. I.T.A. No. 1640 of 2019 is, accordingly, allowed in part." Corpus Donations/ Capital Receipt: 5. During the year, the assessee received corpus donations of Rs. 55.85 crores. The AO denied the benefit u/s 11(1D) and brought this amount to tax treating the assessee as AOP. This issue has been covered by the order of ITAT as mentioned above: " 33. The third ground of this appeal relates to the addition of Rs. 24 crores being the " corpus donations" received by the assessee from HLI by subjecting the same to tax. Ld. CIT( A) deleted the same as consequent to the grant of exemption under section 11 of the Act. While placing reliance on the decision of a coordinate Bench of this Tribunal in the case of Patanjali Yogpeeth (Nyas) vs. ADIT (2017) 185 TTJ 1, it is argued by the Ld. AR that the donations received by the assessee towards corpus fund are not liable to tax. 34. We have gone through the record in the light of the submissions made on either side. Facts of this case are quite similar to the facts involved in the case of Patanjali Yogpeeth (Nyas) ( supra) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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