ASPAN ACADEMY NOIDA,NEW DELHI vs. ACIT CENTRAL CIRCLE- 20, NEW DELHI
Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DELHI
Before: SHRI VIKAS AWASTHY
PER AVDHESH KUMAR MISHRA, AM
Common grounds and facts arise in the above captioned appeals of the assessee; therefore, these appeals were heard together and are being disposed off by this common order.
These appeals for Assessment Years (AY) 2013-14 and 2014-15 filed by the assessee are directed against orders dated 09.02.2021 of the Commissioner of Income Tax (Appeals)-31 New Delhi [CIT(A)].
ITA No.329 & 330/Del/2021
Aspam Academy Noida
2
3. The only issue before us in challenge in both years is ground Nos. 7
to 9 only. Ground Nos. 1 to 6 were not pressed; hence, these grounds stand dismissed. Ground No. 10, being general, does not call for specific finding.
Vide ground Nos. 7-9, the assessee has challenged the rejection of claim of exemption under section 11 of the Income Tax Act, 1961 (Act), which read as under:
“7. On the facts and circumstances of the case, the Ld. CIT(A) has erred, both on the facts and in law, in upholding the rejecting the claim of exemption u/s 11 of the Income Tax Act by Ld. AO on the incorrect understanding of accounting principles and provisions of section 13 of the Income Tax Act, 1961. The Ld. AO erred in holding and CIT(A) erred in confirming that (a) This cash transfer, which was not from the appellant, is clearly attracted by the disqualification enumerated in provision of section 13(2) and 13(3),
(b) The institution/school's actual earning capacity/ strength is much higher than what is reflected in their books of account, due to which the erstwhile promoters/substantial contributors have received/reaped substantial benefit in terms of cash which inures to them for their personal benefit and not for the benefit of the company or for charitable purpose for which exemption u/s 11
read with section 12 and 13 is allowed ignoring that the section stipulates provision of any benefit directly or indirectly to specified persons for rejection of claim of exemption.
(c) The cash transaction has allowed substantial excessive consideration which is more than adequate in the hands of substantial shareholders/ promoters of the company ignoring that such cash transaction was between two independent persons, who were merely shareholder (present and succeeding) of the appellant.
On the facts and circumstances of the case, the Ld. CIT(A) has erred, both on the facts and in law, in confirming rejection of the claim of exemption u/s 11 of the Income Tax Act by AO on the basis of surmises and conjectures.
ITA No.329 & 330/Del/2021
Aspam Academy Noida
3
9. On the facts and circumstances of the case, the Ld. CIT(A) has erred, both on the facts and in law, in adjudicating the Ground no. 8 solely on the issue that appellant cannot be taxed at maximum marginal rate.
Ld. CIT(A) has completely ignored the contention of appellant that Ld.
AO ought to have computed the income of the appellant as "Business
Income" as he has held the appellant to be engaged into and not under normal commercial principle. The Ld. CIT(A) ought to have also considered the contention of appellant that such business income be dealt with in accordance with provisions of section 11(4) of the Income
Tax Act, 1961 only.”
The relevant facts giving rise to this appeal are that the assessee, a Company registered under section 8 of the Companiies Act. The assessee runs a school in Noida (UP). It filed its Income Tax Return (ITR) of the relevant years declaring NIL income which was processed under section 143(1) of the Act. The promotors trustee group, Alchemist Group was searched under section 132 of the Act by the Income Tax Department on 20.06.2014. Various incriminating material were seized from Alchemist Group. On the basis of seized incriminating material, the Assessing Officer (AO) initiated proceeding under section 153C of the Act in these cases. The assessee also got registered under section 12A of the Act in the name of MAF Academy Pvt. Ltd. The assessee (formerly known as MAF Academy Pvt. Ltd. controlled and managed by Mohd. Abul Fazal Farooqi & Associates) was taken over by the Alchemist Group (controlled and managed by Shri K D Singh & Associates) in AY 2013-14. 4.1 As per seized document scanned on Page No. 3 of the assessment order of AY 2013-14, it is evident that entire shareholding of the assessee
ITA No.329 & 330/Del/2021
Aspam Academy Noida
4
company has been transferred from Mohd. Abul Fazal Farooqi group to K.D.S. Corporation Pvt. Ltd vide receipt dated 08.02.2013. As per this document, 100% shares of MAF Academy Pvt. Ltd. were transferred to Promotors of M/s K.D.S. Corporation Pvt. Ltd. and some of its associates.
The details of share transfers are as under: -
S. No.
No.
of Shares
Date of transfer of Shares
Transferor’s name
Transferee’s name
1. 65100
03.06.2013
Farooqi Asad
K.D.S.
Corporation
Pvt. Ltd.
2. 65130
03.06.2013
Farooqi Fazal
Mohd. Abul
K.D.S.
Corporation
Pvt. Ltd.
3. 32550
03.06.2013
Farooqi Jafri
K.D.S.
Corporation
Pvt. Ltd.
4. 32550
03.06.2013
FArooqi
Ayesha
K.D.S.
Corporation
Pvt. Ltd.
5. 32550
03.06.2013
Azmi Zeenat
K.D.S.
Corporation
Pvt. Ltd.
6. 32550
03.06.2013
Raza Nalia
K.D.S.
Corporation
Pvt. Ltd.
7. 10
03.06.2013
Farooqi Fazal
Mohd. Abul
K.D.S.
Corporation
Pvt. Ltd.
8. 10
03.06.2013
Farooqi Fazal
Mohd. Abul
Anil Oberoi
9. 10
03.06.2013
Farooqi Fazal
Mohd. Abul
Satish Mehta
10. 10
03.06.2013
Farooqi Fazal
Mohd. Abul
Dr. Gurinder Singh
11. 10
03.06.2013
Farooqi Fazal
Mohd. Abul
Pawan Kumar Verma
12. 10
03.06.2013
Dr. Gurinder
Singh
K.D.S.
Corporation
Pvt. Ltd.
2 The AO made inquiries from the