Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 605/JP/2018
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 605/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2013-14 cuke M/s Shree Ram Education Income Tax officer, Vs. Society, Near Ambedkar Circle, Ward Exemption, Alwar Alwar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACAS2090P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P. C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Shri Rajendra Jha (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 08/08/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 09/08/2018 vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of ld. CIT(A)- 22, Alwar dated 13.03.2018 for Assessment Year 2013-14 wherein the assessee has challenged the addition of Rs. 5,58,027/- made by the Assessing officer
Briefly stated, the facts of the case are that the assessee trust is having registration u/s 12AA of the IT Act, 1961 as well as approval granted u/s 10(23C)(vi) of the Act. During the course of assessment proceedings, the AO observed that in the ledger account, a transaction has been mentioned as “Raj Fabrication loan” showing payment of Rs 5 lacs as made on 18.04.2012. The AO further stated that the payment has not been made against any material received/services rendered but to accommodate the related party at
ITA No. 605/JP/2018 M/s Shree Ram Education Society, Alwar Vs ITO, Alwar the cost of trust money. The Assessing Officer has stated that the said payment has been made in violation of provisions of section 11(5) r/w section 13(1)(d) of the Act. Hence, the same was added to the total income of the assessee.
On appeal, the said addition has been confirmed by the ld. CIT(A) stating that the appellant has not filed any evidence about the nature of money and required services to be rendered by M/s Raj Fabricators. No confirmation has been filed from M/s Raj Fabricators nor any copy of agreement for services to be rendered by it. He accordingly confirmed the action of the AO in treating the money advanced as loan/deposits and added it under section 11(5) read with section 13(1)(d) of the Act. Now, the assessee is in appeal before us.
During the course of hearing, the ld AR submitted that advance to M/s Raj Fabricators against supply of goods cannot be termed as investing or depositing the money by the assessee trust. It is a transaction where the assessee trust has sought the services of M/s Raj Fabricators and for the purposes, an advance of Rs. 5,00,000/- was paid to it. It was submitted that the intention of making the payment is not earning of any income by way of interest rather the intention was to avail certain services. Merely because the recipient of payment has not discharged his obligation and has not returned the money so advanced earlier, the nature of the payment cannot be altered. Further, the ld. AR has contended that though the payment has been made during the year under consideration, however, the same has not been claimed as an application of income and therefore without claiming the payment as an application of income, there is no basis for disallowing the said payment.
The ld DR is heard who has relied on the findings of the lower authorities.
ITA No. 605/JP/2018 M/s Shree Ram Education Society, Alwar Vs ITO, Alwar 6. We have heard the rival contentions and purused the material available on record. The ld AR has contended that the assessee trust has sought the services of M/s Raj Fabricators and for the purposes, an advance of Rs. 5,00,000/- was paid to it. It was submitted that the intention of making the payment is not earning of any income by way of interest rather the intention was to avail certain services. Merely because the recipient of payment has not discharged his obligation and has not returned the money so advanced earlier, the nature of the payment cannot be altered to loan/deposit. In order to determine the true nature of the transaction and the payment so made by the assessee trust, what is relevant is the transaction document/agreement/understanding under which the said payment has been made. Nothing has been brought on record in this regard either before the lower authorities or even during the current proceedings. Mere contention howsoever strong it may be but if the same is not supported by verifiable documentary evidence, it is difficult to accept the same. Further, the treatment of the transaction in the assessee’s books of accounts also shows the said transaction as in the nature of loan which supports the case of the Revenue rather than the assessee trust. Therefore, the payment of Rs 5 lacs has been rightly held as amount invested/deposited with M/s Raj Fabrication made in violation of section 11(5) of the Act.
Regarding the other contention of the ld AR that though the payment has been made during the year under consideration, however, the same has not been claimed as an application of income and therefore without claiming the payment as an application of income, there is no basis for disallowing the said payment. In our view, even where the payment has not been claimed as an application of income for the year under consideration, given that the payment is made in violation of section 11(5) of the Act, it would still not be counted as part of application of income in the subsequent years. However, for the year under consideration where the payment has not been claimed as
ITA No. 605/JP/2018 M/s Shree Ram Education Society, Alwar Vs ITO, Alwar an application of income, there seems to be no basis for disallowing the same. The matter is accordingly set-aside to the file of the AO for the limited purposes of examining whether the payment of Rs 5 lacs made to M/s Raj Fabricators has been claimed as an application of income or not. Where it is so determined by the AO that the payment has not been claimed as an application of income, the AO is directed to delete the addition so made by him.
In the result, the appeal of the assessee is disposed off with above directions.
Order pronounced in the open Court on 09/08/2018.
Sd/- Sd/- ¼fot; ikWy jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Jaipur Dated:- 09/08/2018 *Ganesh Kr आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- M/s Shree Ram Education Society, Alwar 1. izR;FkhZ@The Respondent- ITO, Ward Exemption, Alwar 2. vk;dj vk;qDr@CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@Guard File (ITA No. 605/JP/2018) 6.
vkns'kkuqlkj@ By order, सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत.