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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA&
The instant appeal filed by the Revenue is directed against the order dated 17.12.2018 passed by the Commissioner of Income Tax (Appeals)-9, Ahmedabad arising out of the order dated 22.12.2017 passed by the DCIT(E), Circle – 1, Ahmedabad under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to “the Act”) for the Assessment Year (A.Y.) 2015-16 with the following grounds: “
1. Whether, the Ld. CIT(A) has erred in the law and on facts in allowing the exemption u/s. 11 of the Act and directing to re-compute the income.
2. The Ld. CIT(A) ought to have upheld the order of the AO, when the AO has clearly brought out the facts that the assessee has violated the provisios of section 13(1)(c), 13(2)(b), 13(2)(d) and 13(2)(g) of the Act.”
The ACIT(E) vs. Adarsh Foundation Asst.Year –2015-16 - 2 -
At the time of hearing of the instant appeal Ld. Counsel appearing for the assessee submitted before us that both the issues mentioned above are squarely covered in for A.Y. 2009-10 a copy whereof has also been submitted before us. Such submissions made by the Ld. AR has not been controverted by the Ld. DR.
We heard the parties and also perused the relevant materials available on record and considered the order passed by the Coordinate Bench in for A.Y. 2009-10. While dealing with the identical issues the Coordinate Bench has been pleased to observe as follows:
“8. We have heard the rival submissions and perused the relevant material on record. We have gone through the findings of the AO as well as CIT(A) part of which are reproduced above in this part of the order. We find that the CIT(A) has arrived on the basic fact that agreement was entered with the company was to secure trust is interest and nor to indulge in the losses and for the purpose of reimburse the expenditure of Kesar Sal Hospital. The object of the transfer agreement with SCPL was to ensure that the hospital is managed professional, and in doing so the purpose of charity is not violated as a reputed hospital of such huge size requires professionally handling. We are also observed that the agreement was not entered into to derive profit from transfer of movable to SCPL but to counter the huge losses incurred in running two big hospitals. Therefore, the CIT(A) has correctly held that the activity of the trust to carried on in accordance with its objects and in the best interest of charity, therefore, the exemption u/s. 11(1)(a) has rightly allowed by the Ld. CIT(A). Similarly, the CIT(A) has clearly held that the Sec. 13(1)(c)(ii) can apply only if any part of the charitable income of the trust has been used or applied for the benefits of the said persons during the previous year. But, since no portion of the income of the assessee has been applied for said person, therefore, the case of the assessee falls outside the scope of this section. Further, the trust is in receipt of income by way of management charges from SCPL and also all of its liabilities have been taken over by the same therefore there is a fact that there is no undue benefits of the use of trust property have been taken by any other persons. Similarly, there is no diversion of income of the trust as per Explanation of Sec. 13(2)(d) and 13(2)(g) of the Act as the trust has been benefitted greatly and its deficit of trust duly reduced to a great extent. We also observed that some erroneous presentation of Form No. 10B report does not disentitle the trust for claiming exemption u/s. 11 of the Act. Similarly, the amount of advance of Rs. 54,35,71,980/- in favour of SCPL appearing in the balance sheet was not advance but the reimbursement of the expenses. In the light of the aforesaid facts and circumstances, we are of the considered opinion that the CIT(A) has analyzed the facts correctly and given a judicious finding which does
The ACIT(E) vs. Adarsh Foundation Asst.Year –2015-16 - 3 - not call for any interference from outside. Accordingly, the same is upheld. Consequently, Ground No. (i) to (iii) of the appeal of the Revenue are therefore dismissed.”
In the absence of any changed circumstances we find no reason to deviate from the observation made by the Coordinate Bench the order impugned passed by the Ld. CIT(A) granting relief to the appellant is according to us just and proper and without any ambiguity so as to warrant interference. Hence, Revenue’s appeal is found to be devoid of any merit and, thus, dismissed.