CENTRE FOR THE STUDY OF SOCIAL CHANGE ,BANDRA MUMBAI vs. INCOME TAX OFFICER EXEMPTION WARD 1(2), MUMBAI

ITA 2703/MUM/2024Status: DisposedITAT Mumbai27 May 2025AY 2016-17Bench: SMT. BEENA PILLAI (Judicial Member), SHRI GIRISH AGRAWAL ( (Accountant Member)13 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that notional rent cannot be added as income for a charitable trust, as such income cannot be actually applied or accumulated for trust purposes. It also noted that the cessation of liability issue was not adequately addressed by the lower authorities.

What were the facts?

The assessee, a charitable trust, claimed exemption under Section 11. The Assessing Officer (AO) made an addition of Rs. 4.80 crores on account of cessation of liability and Rs. 18,61,409/- as notional rent for premises given to another trust without consideration. The Commissioner (Appeals) confirmed these additions.

What were the issues?

Whether cessation of liability can be treated as income for a charitable trust and whether notional rent can be added as income under Section 11.

Which sections of the Income-tax Act were involved?

Section 11,Section 13,Section 41,Section 56

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL

For Appellant: Shri Tanmay Phadke
For Respondent: Shri Soumendu Kumar Dash, SR. D.R
Hearing: 12.03.2025Pronounced: 27.05.2025

Per: Smt. Beena Pillai, J.M.: The Present appeal filed by the assessee arises out of order dated 13/03/2024 passed by NFAC Delhi for assessment in 2016-17 on following grounds of appeal:

“1. On the facts and in the circumstances of the case and as per the law, the learned commissioner (Appeals) erred in confirming the 2 ITA No.2703/Mum/2024; A.Y. 2016-17 Centre For The Study Of Social Change addition of Rs. 4,80,00,000/-on the incorrect observation of cessation of liability. Thus, the said addition being untenable and bad in law may be quashed.

2.

On the facts an

The order continues below.

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