9911796707
TMI Blog2021 (12) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... more is needed except to record that the findings of fact recorded are tenable from available circumstances and there is no substantial question involved warranting interference of this Court. Hence, the questions are answered in favour of the Revenue and against the assessee. Addition u/s 40(a)(ia) - non-compliance with the requirement of deduction of TDS - HELD THAT:- The statutory obligation of the assessee to conform to the requirement of Section 40(a)(ia) of the Act is not in dispute. The fact that no TDS was effected while making the payment of ₹ 21,27,846/- in favour of one Varghese Innocent towards consideration for contract works is also not in dispute. The explanation, in the understanding of this Court, does not deal with any of the relevant aspects of law or fact for independently examining the question to find out whether the findings recorded by the orders referred to above warrant interference. The assessee failed to demonstrate how the above finding warrants interference of this Court, particularly by referring to the substantial questions framed in this behalf. The questions are not substantial questions of law, and the adjudication is in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 142(1) were issued by the Assessing Officer. The Assessing Officer issued notice calling upon the assessee to explain the advance of a sum of ₹ 72,45,000/- in favour of M/s.VUS Timbers. M/s. VUS Timbers is a proprietary concern of Mrs. K Sainaba. The Proprietrix K Sainaba is the wife of Managing Trustee Sri V U Sidhik of the assessee/Educational Trust. The advance made in favour of M/s. VUS Timbers since is not compliant with the general purpose of running the Trust, the Assessing Officer called upon the assessee to show-cause as to why the provisions of Section 13(1)(c) of the Act should not be invoked and disallow the advances made by the assessee in favour of M/s. VUS Timbers. The assessee, in its reply dated 19.11.2014, stated that the assessee had taken steps to establish a medical college; the wood requirement of the proposed building for the medical college has been placed on M/s. VUS Timbers and, therefore, the amount has been advanced to M/s. VUS Timbers. The assessee does not dispute the standing of M/s. VUS Timbers vis-a-vis the Managing Trustee of the assessee. It is stated the amount received from the assessee was repaid by M/s. VUS Timbers during the Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72,45,000/- and estimating interest thereon as diversion of funds of the Trust amounting to violation of exemption u/s.11 of the Act r.w.s. 13(1)(c) and in levying tax at maximum marginal rate thereon? (iii) Whether on the facts and in the circumstances of the case, the assessing and Appellate Authorities, including the Appellate Tribunal are justified in estimating and adding ₹ 13,04,700/- as income of the Trust and assessing the same at maximum marginal rate as stated in the ground above? Are not the above additions arbitrary, illegal and unsustainable in law? 4. Senior Advocate Mr T M Sreedharan contends that the assessee was granted registration under Section 12AA of the Act on 01.04.2000 and the assessee being an Educational Trust, the income is exempt from the computation of total income for the subject assessment year as well. The conduct of assessee since its inception till the show-cause notice issued by the Assessing Officer is completely blemishless. The assessee, being an Educational Trust, is discharging the objects for which the Trust has been established. The assessee, as part of providing education and establishing more colleges, planned to establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legality of the conclusions recorded by the authorities by looking at fresh material now placed by the assessee before this Court. Even, such material does not inspire confidence for the limited purpose of remitting the matter to the Tribunal. He prays for answering all the three questions in favour of the Revenue and against the assessee. 6. The argument of assessee proceeds to convince this Court that the reply given by the assessee is not considered and led to a finding which resulted in the inclusion of ₹ 72,45,000/as income of the assessee. The further argument is that the orders did not consider the material placed by the assessee in support of its plan to establish a medical college and/or subsequent inability to go ahead with the establishment of medical college as planned. Therefore, the assessee prays for firstly answering the questions in favour of the assessee, and secondly for sending the matter back to Tribunal for consideration and disposal afresh. We can, having perused the record, state that the argument is de hors what has been categorically and specifically adverted to by the Assessing Officer, CIT (Appeals) and the Tribunal. However, we would look ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee that the amount has been advanced for purchase of timber for the proposed construction of a medical college. It is an admitted fact that permission was given for the setting up of medical college. The assessee has also not produced any application or other documents which ought to have been submitted to the Governmental authorities or Medical Council of India for the proposal for setting up of medical college. The story of the assessee is far from convincing that the advance has been made for the purchase of timber. The timber is normally purchased only subsequent to the construction of the building and even without constructing any building, the assessee had made the advance for purchase of timber. It is also an admitted fact that no wood was received by the assessee. Therefore, in the garb of purchase of timber, the advance amounts were diverted for the personal benefit of an interested party, who is mentioned in section 13(3) of the I.T.Act. Therefore, there is clear violation of provisions of section 13(1)(c) of the I.T.Act. The contention of the assessee that the amounts were returned by account payee cheques and within a short period is of no consequence. Onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the findings recorded by the orders referred to above warrant interference. It is sufficient to refer to the findings recorded by the Tribunal in this behalf which read as follows: 4.4 We have heard the rival submissions and perused the material on record. Admittedly, no tax was deducted on the payment of ₹ 21,27,846. The assessee has not proved that the provisions of section 40(a)(ia) of the I.T.Act does not have any application on the said payment of ₹ 21,27,846. Hence, the A.O. was correctly disallowed the expenditure by invoking the provisions of section 40(a)(ia) of the I.T.Act, which was confirmed by the CIT(A). Hence, we see no reason to interfere with the order of the CIT(A) and we confirm the same. 8.2 The assessee failed to demonstrate how the above finding warrants interference of this Court, particularly by referring to the substantial questions framed in this behalf. The questions are not substantial questions of law, and the adjudication is in accordance with the requirements of law and circumstances presented by the very return filed by the assessee. The questions are answered, hence, in favour of the Revenue and against the assessee. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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