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Income Tax Appellate Tribunal, CIRCUIT BENCH AT MANGALURU
Before: SHRI INTURI RAMA RAO & SHRI SUDHANSHU SRIVASTAVA
IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH AT MANGALURU
BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
ITA Nos.69 to 71/Bang/2014 (Assessment years: 2004-05, 2006-07 & 2007-08)
Asst. Commissioner of Income-tax Circle 1(1), Mangaluru. ... Appellant Vs. Islamic Academy of Education (R), Nithyananda Nagar, Deralkatte, Mangaluru. ... Respondent
Appellant by : Shri R.N.Siddappaji, Addl.CIT & Shri S.Sreenivasan, DCIT (DRs) Respondent : Shri P.Dinesh, Advocate.
Date of hearing : 03/02/2017 Date of pronouncement : 03/05/2017
O R D E R & Per INTURI RAMA RAO, AM :
These are appeals filed by the revenue directed against the orders of the CIT(A), Mysore, dated 15/10/2013 for the assessment years 2004-05, 2006-07 and 2007-08 wherein the CIT(A) held that in respect of addition made under the provisions of section 69B, the same is eligible for exemption u/s 11 of the Income-tax Act,1961 ['the Act' for short] following the decision of the jurisdictional High Court in the case of CIT vs. Janmabhoomi
ITA Nos.69 to 71/Bang/2014 ITA Nos.69 to 71/Bang/2014 Page 2 of 4 Page 2 of 4 Press Trust (242 ITR 703). The relevant finding of the CIT(A) is as under:
Being aggrieved by the above direction, the revenue is in appeal before us in the present appeals raising the following common grounds of appeal:
The provisions of section 69B enable the AO in a case where the assessee is unable to offer any satisfactory explanation
ITA Nos.69 to 71/Bang/2014 Page 3 of 4 in support of source of investment made in the previous year under consideration. Thus the provisions enable the AO to make addition based on presumptive basis. The burden always lies on the assessee to rebut this presumption. In case assessee is unable to discharge his burden, the addition is made. It does not mean that this amount is available as application of income for charitable purpose. Therefore, the addition u/s 69 in the hands of the institution which is exempt u/s 11 does not result in automatic exemption u/s 11. The provisions of section 69B are deeming provisions and therefore, the provisions cannot be extended beyond the frame for which they were created. The ratio of the decision in the case of Hon'ble High Court of Karnataka in the case of CIT vs. Janmabhoomi Press Trust (242 ITR 703) is not applicable to the facts of the case. It is a case where capital expenditure was allowed as application of income for charitable purpose. Thus, we are of the considered opinion that the CIT(A) has totally fell in error in applying the decision of the Hon'ble High Court of Karnataka in the case of Janmabhoomi Press Trust (supra).
In the result, the appeals filed by the revenue are allowed.
Order pronounced in the open court on 3rd May, 2017 sd/- sd/- (SUDHANSHU SRIVASTAVA) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: Bengaluru. Date: 03/05/2017 Srinivasulu, Sr. PS
ITA Nos.69 to 71/Bang/2014 Page 4 of 4 Copy to: 1) Appellant 2) Respondent 3) CIT(A) 4) CIT, 5) DR ITAT, Bangalore, 6) Guard file Assistant Registrar Income-tax Appellate Tribunal Bangalore