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TMI Blog2024 (6) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... re the lower authorities as they were not available at that point of time and sought for consideration of the above documents to support the argument of the Assessee's Representative, which are very much necessary to render justice. Accordingly, prayed that these evidences to be admitted and appreciated in the interest of justice. In our opinion, these documents are not available at the time of proceedings before lower authorities and these are very much required for fair adjudication of dispute between the parties. Accordingly, these documents are admitted for adjudication. Since these documents are filed for the first time before this Tribunal and the lower authority have no occasion to examine these documents on earlier occasions, while the proceedings are going on, hence, it is appropriate to remit the entire issue in dispute to the file of ld. AO to consider these documents and decide the issue afresh in the light of above. Accordingly, the issue in dispute is remitted to the file of ld. AO in both assessment years for fresh adjudication. Assessee appeal partly allowed for statistical purpose. - SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d develop various educational aids required at different levels of education for the benefit of ours and other educational institutions. 2.2 From Schedule 5 of the Balance Sheet it was noticed that loan/advance of Rs. 18,03,595/- had been given to Divine Real Build Private Limited who is a specified person within the meaning of section 13(3). It was also noted that the assessee had not charge any interest on loans/advance given. Since interest free loan/advance had been given to specified person, a show cause notice was given to the assessee to explain why the benefit of Exemption under sections 11 and 12 be not denied to the assessee in view of the violation of section 13(1)(c). In response, a reply was given which was considered. From the Ledger account of Divine Real Build Private Limited in the books of accounts of the assessee, it was seen that it was maintaining a running account with the said concern since a lot of debit and credit entries were recorded in the Ledger account. With regard to these entries it we submitted by the assessee that it had applied for increase of FAR in the DDA office at could also submitted that the entries reflect money received back from Divine Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t even though no work w executed by Divine Real Build Private Limited, regular payments were made to it without any consideration and that too interest free. It was also noted that as per the confirmation received, the amount advance was in the nature of unsecured loan given Build Private Limited. It was held that the assessee had committed a violate meaning of section 13(1)(c) and, therefore, the benefit of exemption u/s 11 12 was denied to the assessee and it was assessed as an AOP under Chapter IV of the Income Tax Act. Assessment was completed at an income of Rs. 74,49,530/- to be taxed at maximum marginal rate as per the provisions of section 164(2), Aggrieved by the order, this appeal has been filed. 4. The Ld. A.O. has also passed similar Assessment Order for A.Y 2015-16 as well. As against the Assessment Orders dated 24/12/2016 and 22/12/2017 for A.y 2014-15 2015-16, the assessee preferred the Appeals before the CIT(A), the Ld. CIT(A) vide orders dated 22/03/2019, dismissed the Appeals filed by the assessee. As against the orders dated 22/03/2019, the assessee preferred the present Appeals on the Grounds mentioned above. 5. The ld. Counsel for the Assessee submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason and could finally be approved only on 08/08/2016, further as per the said agreement the initial advance payment of Rs. 20,00,000/- and balance after three months of date of agreement and after nine months of date of agreement were to be paid to the builders, although the work could not be started due to the fault of the assessee in the getting the plan sanctioned with increased FAR. It is also claimed by the Assessee that the said money was received back from the builder during Assessment Year 2014-15 and only balance left was Rs. 18,03,595/-. The assessee has paid Rs. 97,10,000/- in Assessment Year 2013-14 to Divine Real Build Pvt. Ltd. as advance at Sector 25, Rohini, Delhi at an agreed consideration of Rs. 1,30,00,000/- as per Tax Agreement. But no payment was made during A.Y 2014-15 and instead the entire payment of Rs. 97,10,000/- was returned back during .A.Y 2014-15. The Ld. CIT(A) after considering the contentions of the Assessee dismissed the Appeal filed by the Assessee in following manners:- 4.2.2 I have considered the assessment order and the submissions of the appellant, it is a fact that amounts had been advanced to Divine Real Build Private Limited which it a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption to the trust; it has to further get itself registered under Section 12A. This condition is also satisfied in the present case since the assessee was registered under Section 12A on 28.05.1976. There are further conditions for being eligible to the exemption. Section 13(1) enumerates instances under which the provisions of Section 11 granting exemption will not operate. One such instance is furnished by clause (c) (ii) which says that if any part of the income or any property of the trust is, during the relevant previous year, used or applied directly or indirectly for the benefit of any person referred to any sub-section (3), the exemption will not be allowed. Sub-section (3) enumerates the prohibited persons and there is no dispute that the assessee's case falls within clause (e) of sub-section (3). There is another provision which we have to notice and that is Section 13(2) which in clauses (a) to (h) thereof sets out illustrative instances where the income or property of the trust may be deemed to have been used or applied for the benefit of a prohibited person. 22. It is also to be noted that even if there is one instance of application or use of the income or proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under section 11 by invoking the provisions of section 13 is upheld. Grounds of appeal Nos. 2 to 4 are dismissed. 8. The Ld. Counsel for the Assessee submitted as under:- (i) The allegation of A.O. is that funds were diverted to the specified persons (M/s. Divine Realbuild Pvt. Ltd.) without any consideration is factually incorrect as is evident from the fact that assessee has engaged the alleged specified person for the construction of the building which building was to be used for educational purposes. It is also relevant to mention here that it is not the case where there is any material even to allege that the assessee has not carried out its activities in accordance with the objects of the society. (ii) 14. In this regard the assessee wish to rely upon the judgment of the Hon'ble Allahabad H.C. in the case of CIT v. Kamala Town Trust 279 ITR 89 wherein it has been held that benefit to interested person in common parlance would denote providing something which is not due to them. Therefore, any reasonable compensation against any good, services or even property shall not be considered as benefit which is not due to them. It has been further held that even if there is some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regular books of account, violations of provisions of section 13(1)(c) in as much as the trustees were paid enormous salary all by way of passing reference having no relevance to whether or not the assessee was pursuing education as its main object. (vii) It is submitted that assessee vide letter dated 07.12.2016 which is at (P. No. 65 of Paperbook Vol.1) has pointed out to the lower authorities that building construction could not take place due to the delay in sanctioning of the Map. (viii). It is submitted that as per clause 3 of the Building Construction Agreement (at P. No. 1A of Paperbook Vol.2) it is categorically mentioned that the amount of Rs. 20 lakh + 11,567/-(Legal Cost) was to be given by the assessee to the Divine Real Build immediately upon the signing of the Agreement and that is why there was a closing balance of Rs. 18,03,595/ which balance is coming out from previous years and during the year only advance was given Rs 2,24,455/-. (ix). It is submitted that Assessee vide letter dated 22.12.2016 has categorically explained the facts via-a-vis total cost of construction, advance to be given on signing of 'agreement, delay in sanctioning of map. By virtue of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion in those assessment years to have a building for the Assessee trust in the land in question. Particulars Page No. Certificate issued to assessee from Govt. Of India Ministry of Minority affairs along with photographs dated 10/09/2021 28-35 Funds Sanction from Skill and Livelihoods Development from Rajahstan Govt. Dated 30/01/2023 36-38 Funds Sanction from Gujarat Govt. To assessee dated 30/01/2023 39-41 Sanction of Funds from UP Govt. Dated 24/06/2020 42-44 Certificate from District Minority Welfare U. P. along with other evidences dated 30/12/2019 45-48 11. The ld. A.R. made a plea before us that these documents were not produced before the lower authorities as they were not available at that point of time and sought for consideration of the above documents to support the argument of the Assessee's Representative, which are very much necessary to render justice. Accordingly, prayed that these evidences to be admitted and appreciated in the interest of justice. In our opinion, these documents are not available at the time of proceedings before lower authorities and these are very much required for fair adjudication of dispute between the parties. Accordingly, these docume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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