CHANDMALL SARAWGI CHARITABLE TRUST, A- BLOCK, MAHABIR MARKET, H.B.ROAD, FANCY BAZAR, GUWAHATI - 781001,GUWAHATI vs INCOME TAX OFFICER, WARD 2(3)/ EXEMPTIONS AAYAKAR BHAWAN, G.S.ROAD, CHRISTAIN BASTI, GUWAHATI - 781005, GUWAHATI

Income Tax Appellate Tribunal, GAUHATI BENCH “E” COURT AT KOLKATA

Before: Shri S.S.Godara & Dr. A.L.Saini

PER BEMCH:- This assessee’s appeal for assessment year 2011-12 arises against the Commissioner of Income Tax (Appeals)-2, Guwahati’s order dated 27.10.2017 passed in case No. Guwa-87/2014-15/15 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

The sole substantive issue(s) that arises for our apt adjudication in the instant lis is that of correctness of the lower authorities action invoking sec. 13(1)(c)(ii) r.w.s. 13(2)(b) disallowance of ₹4,47,980/- on the ground that the assessee’s trustee, Shri Ganpat Rai Sarawgi was found to have been residing in the trust’s residential property without paying any rent. The Revenue’s case as per both the lower authorities’ action is that Shri Sarawgi has not paid any rent much less than adequate rent u/s. 13(1)(c)(b) of the Act, and therefore,

ITA No.03/Gau/2018 Assessment Year: 2011-12 Chandmall Sarawgi Charitable Trust Vs. ITO Wd-2(3) (Ex) Page 2 the impugned disallowance has been rightly made in assessee’s case. We find no merit in Revenue’s foregoing arguments. We notice that the assessee’s residential property in question had been let out to a firm M/s Bimal Auto Agency for the past very many assessment years on payment of rent. Mr. Sarawgi happens to be partner of said firm. That being the case, we see no reason to sustain the impugned disallowance since it does not turn as a case of his payment of rent since the above firm has been regularly paying the rent. We accordingly accept the assessee’s former substantive ground.

Coming to latter substantive ground regarding amount of ₹ 5 lac disallowed u/s. 11(2) of the Act it emerges that the same is mere consequential in nature for the reason that the lower authorities had gone by their findings on the foregoing issue and made the impugned disallowance in expenditure to cover up shortfall in application of income. We hold that this latter substantive ground must also follow suit to the former one. We order accordingly.

This assessee’s appeal is allowed. Order pronounced in the open court 18/12/2019 (A.L.Saini) (S.S.Godara) (Accountant Member) Judicial Member) Kolkata, *Dkp "दनांकः- 18/12/2019 कोलकाता/। आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Chandmall Sarawgi Charitable Trust, A-Block, Mahabir Market, H.B. Road, Fancy Bazar, Guwahati-781001

CHANDMALL SARAWGI CHARITABLE TRUST, A- BLOCK, MAHABIR MARKET, H.B.ROAD, FANCY BAZAR, GUWAHATI - 781001,GUWAHATI vs. INCOME TAX OFFICER, WARD 2(3)/ EXEMPTIONS AAYAKAR BHAWAN, G.S.ROAD, CHRISTAIN BASTI, GUWAHATI - 781005, GUWAHATI