M/S IMPROVEMENT TRUST KHANNA,LUDHIANA vs. ITO, KHANNA

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH’A’, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA Nos. 607 To 610/Chd/2017 (Assessment Years : 2009-10 To 2012-13) Improvement Trust Khanna Vs. The ITO G.T. Road Ward I V Khanna, Ludhiana Khanna PAN No. AAAL0030N (Appellant) (Respondent) Assessee by : Shri. Parikshit Aggarwal Department by : Sh. Manoj Kumar Date of hearing : 14/06/2018 Date of Pronouncement : 12/07/2018

O R D E R PER BENCH:

All the above appeals have been filed by the Assessee against the separate order of the Ld. CIT(A)-4 Ludhiana.

Ground in ITA No. 607/Chd/2017 for A.Y. 2009-10 That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO that the appellant falls under the proviso to section 2(15) of the Act and hence section 13(8) is applicable in the appellant's case and the appellant is not eligible for the benefit of section 11 & 12 of the Act and by affirming addition made on account of disallowing of the expenses Rs. 5,15,533/- by Ld AO 1. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO that the appellant falls under the proviso to section 2(15) of the Act and hence section 13(8) is applicable in the appellant's case and the appellant is not eligible for the benefit of section 11 & 12 of the Act thereby giving perverse finding on basis of irrelevant material and ignoring relevant facts and jurisdictional Tribunal precedents. 2. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding Ld AOvs action of disallowing expenses R. 5,15,533/- on account of expenditure of public utility without any material and facts provided during assessment and in his assessment order. Legal ground on validity o f assumption o f jurisdiction under section 147A48 o f the Act

Ground in ITA No. 608/Chd/2017 for A.Y. 2010-11

That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO that the appellant falls under the proviso to section 2(15) of the Act and hence section 13(8) is applicable in the appellant's case and the appellant is not eligible for the benefit of section 11 & 12 of the Act and by affirming addition made Rs.6,94,637/- by Ld AO by ignoring various jurisdictional Tribunal and Court precedents and our submissions on record.

Ground in ITA No. 609/Chd/2017 for A.Y. 2011-12

That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO that the appellant falls under the proviso to section 2(15) of the Act and hence section 13(8) is applicable in the appellant's case and the appellant is not eligible for the benefit of section 11 & 12 of the Act and by affirming addition made on account of disallowing of the expenses Rs. 1,02,27,697/- by Ld AO ignoring various jurisdictional Tribunal precedents and our submissions on record. 1. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO that the appellant falls under the proviso to section 2(15) of the Act and hence section 13(8) is applicable in the appellant's case and the appellant is not eligible for the benefit of section 11 & 12 of the Act thereby giving perverse finding on basis of irrelevant material and ignoring relevant facts and jurisdictional Tribunal precedents. 2. That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding Ld AO's action of disallowing following expenses without any material and facts provided during assessment and in his assessment order:-

a. Rebate & discount Rs. 99,792/- b. Survey expenses Rs. 1,50,835/- c. Advertisement expenses Rs. 9,94,441/- d. Repair & Maintenance of Scheme Rs. 70,13,218/- e. Repair and maintenance (Street light) Rs. 10,98,728/- f. Repair & Maintenance Rs. 3,66,667/- g. Public utilizes expenditure Rs. 5,04,016/-

Ground in ITA No. 610/Chd/2017 for A.Y. 2012-13

That on the facts and in the circumstances of the case and in law, learned CIT-A erred in upholding the action of Ld AO that the appellant falls under the proviso to section 2(15) of the Act and hence section 13(8) is applicable in the appellant's case and the appellant is not eligible for the benefit of section 11 & 12 of the Act and by affirming addition made Rs. 5,05,37,905/- by Ld AO by ignoring various jurisdictional Tribunal and Court precedents and our submissions on record. 3. Brief facts of the case are that the assessee is an improvement trust registered under Punjab Town Improvement Act, 1922 and was having

registration under section 12 AA. However the registration was withdrawn by the CIT vide order dt. 07/02/2013 w.e.f 01/04/2009 i.e. A.Y. 2009-10 by relying on amendment due to insertion of proviso to section 2(15). This withdrawal of registration stands confirmed by the Hon’ble ITAT in ITA No. 406/CHD/2013 dt. 26/11/2014. The appeal of the assessee is pending in ITA No. 533/2017 before the Hon’ble Punjab & Haryana High Court.

10.(a) We find that the Ld. CIT(A) has not passed any speaking order giving the rationale or reasoning for confirming the additions. Hence, the matter is remanded back to the file of Ld. CIT(A) to pass a speaking order. It is also hereby directed that the assessee would also submit all the relevant details and comply fully to the directions of the Ld. CIT(A) in adjudication process.

10(b). Regarding the issue of withdrawal of registration under section 12AA, the order of the Ld. CIT(A) was confirmed by the ITAT in ITA No. 406/CHD/2013 dt. 26/11/2014. Since there is no material difference in the facts and circumstances of the case for the year under consideration, we hereby confirm the revocation of registration under section 12AA.

Order pronounced in the open court.

Sd/- Sd/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 12/07/2018 AG Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR