Income Tax Appellate Tribunal - Chandigarh
M/S Pinegrove International ... vs Dcit, C-1 (E), Chandigarh on 31 August, 2020
आयकर अपील य अ धकरण, च डीगढ़ यायपीठ "बी", च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL,
CHANDIGARH BENCH 'B", CHANDIGARH
ी संजय गग , याय क सद य एवं ीमती अ नपण
ू ा गु&ता, लेखा सद य
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER
AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.567/Chd/2019
नधा रण वष / Assessment Year : 2015-16
M/s Pinegrove International बनाम The D.C.I.T.,
Charitable Trust, Circle-I(Exemptions),
CR Building, 5th floor,
Sector 17E,
Chandigarh.
थायी लेखा सं./PAN NO: AABFP0867H
अपीलाथ /Appellant यथ /Respondent
नधा रती क ओर से/Assessee by: Shri A.K. Sood, FCA
राज व क ओर से/ Revenue by: Shri Daya Inder Singh
Sidhu, Addl.CIT
सन
ु वाई क तार$ख/Date of Hearing : 13.08.2020
उदघोषणा क तार$ख/Date of Pronouncement: 31.08.2020
आदे श/ORDER
Per Annapurna Gupta, Accountant Member:
Th e a b ove a p p e al ha s b e e n p r e fer r e d b y t he a ss essee a ga i nst th e or d e r of t he C om mi ss ion e r of I n come Ta x (A pp e a ls )-2 , C h a nd i ga r h [( i n sh or t r e fe r re d to as 'C I T( A) ' ] da t e d 2 8 .0 2 .2 0 19 r e l a tin g to as se s sme n t ye a r 2 0 1 5-1 6 , pa s se d u /s 2 5 0 (6 ) ) of t he I nc ome Ta x Act , 1 9 6 1 ( h e re i n a fte r re fe rre d to a s 'A ct'.
2 ITA No.567/Chd/2019
A.Y. 2015-16
2. Th e sol it a ry i ss ue i n the p re se nt a p p e a l re l a te s to t he a dd i ti on ma d e to t he i nc ome o f the a s se s se e by d e n yi ng e xe mp ti on u /s 1 1 o f the A ct to t he e x te n t o f re nt pa i d b y t he a sse sse e to one of i ts tr u ste e s a mou nti n g t o R s.6 9 la c s, hol d in g th e s a me to b e o n h i g he r s ide a s comp a r e d to ma rk e t r a te b y i n vok i ng th e p r ovi si on s of se c ti on 1 3( 1 )( c ) of the A ct.
3. B r i e f f a ct s of t he c a se a r e t ha t th e a s se s se e trus t is a cha ri ta b l e s ocie ty r e g is te re d u /s 1 2 A a nd 1 0 ( 23 C ) ( vi ) of t he Act . Du r in g the i mp ug ne d ye a r th e AO n ote d th a t t he a sse sse e ha d ma d e p a y me nt of re nt to the se cre ta r y of t he a sse sse e soc ie ty a mou nt in g to Rs .6 9 l a c s. On ma k i ng e nq u i rie s he f ound t ha t the sa i d r e n t wa s on the hi gh e r s ide a s c om p a re d to the ma r k e t r a te . A cco rd i ng ly , he he ld tha t the a s se s se e ha d p ro vi de d be ne f i t to the se cre t a ry/tr us te e a nd , th e re fore , in vo ki n g the p r ov is io ns of se c ti on 1 3 (1 ) ( c) re a d wi th se cti on 1 3( 3 ) o f th e A ct , h e de n ie d e xe mp ti on u /s 11 of th e Act to th e e xte nt of re n t s o p a i d .
4. Th e ma tte r w a s ca r ri e d i n a p pe a l b e f ore the CI T( A) w ho up he ld the f i nd i ng s o f the A O .
5. Ag gr i e ve d b y the sa me , th e a s se sse e h a s co me up i n a pp e a l be fo re u s, r a i si n g t he f oll ow i ng gr ou nd s : 3 ITA No.567/Chd/2019
A.Y. 2015-16 "1. The orders of The Ld CIT (Appeals)-II confirming the orders of the learned Deputy Commissioner of Income Tax (Exemptions) are against the law and facts of the case as the orders have been passed in mechanical manner with general remarks of huge payments to trustee on account of payment of rent of Rs. 69,00,000/-
for renting out 54600 Sq Ft of area to the society without commenting on quantum of excessive payment in the absence of any cogent material on record whereas despite the fact that the society is running a fully residential school and the reasonability of rent, necessity and utilization of the land and building owned by the society and land and building taken on rent by the society was amply demonstrated before the "AO" and CIT (A)-II and the rent is paid to Sh A.J. Singh for use of the premises at Rs 10.53 per sq ft per month which is much less than the market rent of such type of premises in that area.
2. The orders of The Ld CIT (Appeals)-II confirming the orders of the learned Deputy Commissioner of Income Tax (Exemptions) are against the law and facts of the case on account of Judicial inconsistency as the cases of the assessee for the last so many years are being regularly assessed u/s 143(3) by different assessing officers without any adverse inference on the above issue of payment of rent.
3. The orders of The Ld CIT (Appeals)-II confirming the orders of the learned Deputy Commissioner of Income Tax (Exemptions) are against the law and facts of the case as on the same set of facts additions were made by the "AO" for A/Y 2003-04 and 2004-05 also which was decided by the Ld. CIT(A) in favour of the assessee vide its orders dated 07.12.2006 and on further appeal by the department in ITAT, the appeals of the department were dismissed by the Hon'ble ITAT vide its orders dated 24.04.2008 in ITAs No 212,655/CHANDI/2007, wherein the department had not gone in any further appeal.
4. That The Ld "AO" has taxed the income at maximum marginal rate whereas the income of the societies are taxed as Individuals and AOP.
5. For these and other reasons that may be urged at the time of hearing the appellant prays for relief." 4 ITA No.567/Chd/2019
A.Y. 2015-16
6. We h a ve he a rd th e a r gu me n ts ma d e by bo th t he pa r ti e s . Th e f i rs t a r gu me n t r a i se d b y t he Ld. C ou ns e l for t he a sse sse e ch a l le ngi n g the de ni a l of e xe mpt ion u/s 1 1 t o t he e xte nt of re nt pa i d to the se cret a ry w a s th a t i t h a d b e en du ly d e mo ns tr a te d to the a u th or it ie s be lo w th a t th e re nt pa i d w a s r e a s ona b l e a s c omp a r ed to th e ma r k e t r e n t a nd tha t n o u nd ue be ne f i t h a d bee n gi ve n t o th e secr e ta r y b y vi rt ue of the sa i d p a yme nt so a s to in vo ke the pr ov is i ons of se c tio n 1 3 (1 ) ( c) re a d w it h se ct ion 1 3 (3 ) of the Ac t fo r d e ni al of e xe mp ti on u /s 1 1 o f t he Ac t. Dr a w in g o ur a t te nti on to t he fa ct s r e l a ti ng to th e p a yme nt of the re nt a s ou tl in e d in his sub mi ss ion s ma d e be fore t he Ld. C I T( A) a n d r e pr od u ce d at pa g e 7 of th e or d e r , the Ld .C ou ns e l fo r the a sse ssee con te n de d tha t the le sso r C a p t.A ma rj yot Si ng h G ya n i w a s the a b sol ute o wne r of the l a nd a nd bu il d i ngs i n th e p r ope r ty comp r is e d i n V i l l a g e M a n g o t i , T e h s i l K a s a u l i D i s t t S o l a n HP, measuring about 18 Bighas on the main road, which was on rent with the assessee "Lessee" i.e Pinegrove I n t e r n a t i o n a l C h a r i t a b l e T r u s t ( R e g d ) s i n c e 1 9 9 1 . Th e s e rented buildings were situated on the main Kasauli Road, PO Dharampur-173209, in Distt. Solan HP, in which the trust was running a fully residential Senior Secondary School (Affiliated with CBSE). Th e trust was utilizing 5 ITA No.567/Chd/2019 A.Y. 2015-16 these buildings for Academic Classes, Laboratories, Dining Hall, Kitchen, Stores, Parking spaces, Hospital, Doctor's and Nurses's residences, Staff rooms, blocks of S t a f f Q u a r t e r s , P l a y - f i e l d s , Tw o B a s k e t b a l l C o u r t s , G u e s t Houses and the main Academic and A d m i n i s t r a t i v e O f f i c e B l o c k s e t c . To t a l c o v e r e d a r e a o f t h e s e buildings was approximately 54600 sq.ft for which a rent of Rs 69,00,000/- had been paid which came to Rs. 10.53 per Sq Ft per month. In addition to rent for almost 1/3 rd covered area out of 2 Acres of land, balance land was being used by the school for play grounds, roads etc without any additional charges. That the rent paid to Sh A.J Singh was much less than the rental value of such p r o p e r t i e s i n t h a t v i c i n i t y . I n th is r e ga r d, for th e p ur p ose of e sta b l is hi n g th e re a s on a ble ne s s of the re nt p a i d , t he Ld. C ou ns e l for t h e a sse ssee d r ew o ur a tte nt ion to va r i ous doc ume nts d e mon str a ti n g th e f a ct tha t th e re n t pa i d for t he imp ug ne d p r op er ty at Rs .1 0 .5 3 per sq . ft . pe r mon th con si de r in g the fa ct tha t the re n te d l a nd w a s a ppr oxi ma te ly 54 6 0 0 sq . ft. fo r w h i ch the re n t of Rs. 6 9 l a cs w a s p a i d a nn ua l l y, w a s m uc h l e s s th a n the re n t va l ue of the sa me pr op e r t y i n the v ic i ni ty p l a ce d a t p a pe r bo ok pa g es 4 t o 1 8 a s u n de r:
6 ITA No.567/Chd/2019
A.Y. 2015-16 Re n t de e d l e a s i ng ou t p r op e r ty t o P u nj a b N a t ion a l Ba n k a t Rs. 28 . 8 4 p e r sq ft p e r mon th Re n t de e d le a s ing out p ro pe r ty t o M /s H ot Mi ll i on s a t Rs. 3 2 pe r sq f t pe r mon th Re n t dee d l e a si ng out pr op e rt y to I N G Vy sya B a n k a t Rs. 6 2 pe r sq f t pe r mon th
7. H e f ur the r p oi nte d o ut f r om the a bo ve t ha t th e re nt i n the c a se of co mp a r a ti ve c a se s r e nt va r ie d f r om R s. 28 . 84 ---
to Rs. 6 2 p e r s q .f t., a ga i ns t w hi c h the a sse ssee tr u st h a d pa i d th e re n t to it s tr u ste e C a pt. Ama r j yot S i ngh G ya n i a t Rs. 10 . 5 3 pe r sq .f t. onl y. The Ld . C oun se l for t he ass e ssee poi n te d ou t th a t th e re nt pa i d to the tr us tee , th e re fore , w a s a t a r a te much b e l ow o f the ma r ke t r a te f or s imi l a r t yp e of pr op e r t y. He f ur th e r d re w our a tte n tio n to t he f a ct tha t t he re nt i s b e in g p a id r e gul a r ly for th e l a st mor e th a n 1 2 ye a r s a t r a te be l ow the ma r k e t r a te and most of t he ca s e s we re ta k e n up for s cru tin y by the Re ve n ue de p a r tme n t a n d or de r s pa s se d w ith ou t a n y a d ve r se i n fe re nce . O ur a tte nti on w a s dr a w n to or de rs p a ss e d u /s 1 4 3 ( 3 ) fo r A. Y 20 1 0 -1 1 to 2 0 1 4 - 15 p l a ce d a t P .B 8 2 -8 7 of P a pe r B ook - I . He fu r th e r p oi nte d out tha t i d e nt ic al a d di ti on s ma de i n a sse ssme nt ye ars 2 0 0 3- 04 a nd 2 0 0 4 -0 5 w e re de ci de d i n fa v our of th e a s se sse e b y the Ld . C I T( A) a n d on f ur th e r a ppe a l b y the De p a rt me nt i n I TA T, t he a p p e a ls w e re di smi s se d. O u r a t te n ti on w a s d r a w n to th e or de r s of th e Ld . C I T( A) p e rt a in i ng to the afore sa i d 7 ITA No.567/Chd/2019 A.Y. 2015-16 a sse ssme nt ye a rs, p la c e d i n P a pe r B ook a t p a ges 4 5 to 7 7 a nd th a t of the I TA T di s mi s si ng th e a p pe a l s of the Re ve n ue in th ose ye a r s , pl a ce d a t Pa pe r Book a t p a ge s 7 8 to 8 1 . The Ld. C ou nse l f or th e a sse s see dre w our a tte nt io n to t he de ci si on of the H on' bl e A pe x C ou r t in th e ca s e of C I T( Exe mp ti on s) Vs . B o la R a m Ed uc a ti on Soc ie ty (2 0 19 ) 1 0 1 Ta x ma nn .c o m 1 93 p oi nt in g ou t th e re f r om th a t th e i ss ue re ga r d in g t he pay me n t of r e a so na b l e re n t t o a n in te re ste d pe r son h a vi ng r eg a r d to th e f a i r ma r k e t va l ue of the p r ope r ty wa s d e ci de d i n f a vou r of the a s se sse e . Th e Ld . C oun se l f or the a sse s see f ur th e r e mp ha s iz e d tha t th e A O h a d tr e a te d the re nt paid as u nr e a son a b le wi th out any cor r ob or a ti ve e vi de n ce and coge nt ma te r i a l on r e co rd and w i th out con tr a d ic tin g comp a r a b l e c a se s a nd pa s t hi st or y of t he a sse sse e p r ovi ded by t he a s se s se e . Th e Ld. C oun se l f or t he a sse sse e d re w o ur a tt e nt ion to th e a s se s sme nt o rd e r wh e re in the fi n d in gs of th e AO re ga rd in g t he un re a son a b le ne ss of the re nt we re re c or de d a t p age N o.4 a s un de r :
" Asse ssee h a s p a id ren t of Rs. 6 9 ,0 0 , 00 0 /- to C a p t. Am ar jo t S in gh G y an i, wh ic h is o n h igh er sid e an d the ren t p a id is n o t gen u ine an d rea son a bl e. T he l ea se amou n t i s h igh er sid e bec au se a sse sse e i s p a y ing R s. 6 9 ,0 0 , 00 0 f or 5 4 , 60 0 sq.f t. ( a s per re pl y of asse s see ), wh i c h come s Rs. 1 26 . 3 7 per sq .f t. per an nu m, wh ic h i s h igh er sid e c o mp are d to m ar ke t ra te . In th e a bov e f ac ts, i t sh o w th a t th e p ay men t to i ts si s te r c on ce rn ar e n o t gen u in e an d 8 ITA No.567/Chd/2019 A.Y. 2015-16 rea son abl e, wh i ch is n o t al l o wabl e u/s 1 3( 1 ( c) r. w. 1 3( 3 ) of I. T . Ac t, 1 9 61 . "
8. Re fe rr i ng to the s a me he con te nd e d th a t it is e vi de nt tha t the AO had no b a si s f or ho ld i ng th e rent as un re a son a b le a nd th a t h is f i nd i ng s w e re me r e ly ba s e d on sur mi se s a n d co nj e ct ure s . He , the re f ore , con te nd e d t ha t it ha d b ee n e sta b l ish e d b y the a sse sse e be yon d do ub t th a t t he re nt pa i d to C a pt . A ma r jy ot S in gh Gy a ni one of th e tr u ste es of t he a sse ssee tr us t w a s re a son a b le a n d, the re for e , the re wa s no r e a son a t a ll to d e n y e xe mp ti on to t he u /s 1 3 (1 ) ( c) re a d w i th se cti on 1 3 ( 3) of th e A ct
9. Th e Ld . D R, on t he othe r ha n d , re l ie d on the or de r s of the a u tho ri tie s be l ow .
10 . Th e n e xt c ont e n tio n r a is e d b y the Ld . C ou ns e l f or t he a sse sse e w a s a ga i ns t t he re a s oni n g of th e Ld . C IT( A) f or a rr i vi n g a t the con cl us ion t ha t un d ue be ne f it ha d b e en giv e n to the t ru ste e by w a y of re nt p a id . Th e Ld . C ou ns e l for the a sse s see p oint e d ou t t ha t the Ld . C I T( A) h a d a r r iv e d at the a f ore s a id fi nd i n g o n a t ota l ly d i ff e re n t ba si s by s ta ti ng tha t b e i ng a Pub l ic C h a r i ta b le Tr us t t he f a ct th a t t he a sse sse e h a d bough t 1 0 a cr e s of a d d i tio na l la nd con ti gu ous to th e re nte d p re mi se s w he n a c tua ll y i t s hou l d ha v e u til i ze d the mone y fo r a cq ui r i ng t he le a sed l a nd f ir s t a nd th e re a fte r goi ng fo r th e a ddi ti on a l la n d , i tse lf d e mon st ra t e d tha t un d ue 9 ITA No.567/Chd/2019 A.Y. 2015-16 be ne fi t ha d b een gi ve n to th e tr us tee . O ur a tten ti on w a s dr a w n to the re lev a nt fi nd i n gs o f the Ld .C I T(A ) a t p a r a 6 .3 . 2 a t p a ge 1 0 a s u nd e r:
A deeper scrutiny of affairs of the society, notwithstanding the rationale provided about reasonableness of the rent paid are:
(i) The society/trust, once it starts with an altruistic intent and is registered as such, becomes a public body and its income is public money.
(ii) The trust has, over several years claimed utilization and over and above it, depreciation on land and building constructed on the leased property.
(iii) If the society's public money has been utilized for acquiring 10 acres of additional land, an optimal utilization of the money should have been acquiring 2.5 acres of the leased land first and thereafter going for additional land and to that extent saved on the rent being paid. It's also pertinent to mention that exemption is allowed only to the extent of income from property that vests in the trust for charitable purposes. Lease deeds by their very nature can be rescinded.
(iv) Since, this is the case of a public body dealing in public money, the off quoted principle, that the AO can no t step into the shoes of a b u s i n e s s m a n , wo u l d n o t b e r e l e v a n t i n th e c a s e . H e r e , th e benef iciaries, the society at large and equal stakeholders in the transparent f unctioning of bodies wear altruism as their motive on their collars.
(v) It is relevant to mention that the CBSE for granting affiliation to an institution upto 1000 students (the school in contention has only 600 students) requires only 1 acre of land as a necessary conditionality to be met.
(vi) Institutions/ entities claiming to be altruistic and getting exemptions can 't be seen to be in d ul ging in aggran d iz eme n t of asse ts ev en through not required for optimal facilities in the premises.10 ITA No.567/Chd/2019
A.Y. 2015-16 In light of all of the above it is held that the rent being paid to the trustee is entirely unnecessary and is aimed at indirectly benefitting the trustee who comes within the realm of person envisaged in section 13 of the Act. The entire payment is held to be unreasonable in terms of section 13(2) of the Act. In view of above discussion, ground of appeal no. 1 is partly allowed." 11 . C ou nte r in g the sa me th e Ld. C oun se l fo r the a ssess ee con te n de d th a t the e n ti re l a nd i n p oss e ss io n o f t he a sse ssee soci e t y bot h ow ne d b y i t ( a p p r oxi ma te l y 10 a c r e s ) ( 5 4. 03 bi gh a s) a nd th a t l e a se d b y it f r om t he t ru ste e i .e . 1 7. 1 0 bi gh a s w a s uti l iz e d for the p u rp ose for w hi ch t he soci e ty h a d be e n e st a bl i she d i .e . fo r i mp a r ti ng e d uca t ion . Ou r a tte n ti on wa s d r a w n to the p a ge N o. 3 of P a p e r B ook -2 de ta i li n g t he sa me . Th e Ld . C ou ns e l f or the as se sse e con te n ded tha t t he a sse sse e soc ie ty h a vi ng u ti li z e d the e nt ire l a nd f or t he pu r po se of i mpa r ti n g e d uca t ion a n d th e f i nd i ngs of t he Ld. C I T( A) t ha t th e a sse ssee soci e ty oug ht to ha ve fi r st pu r ch a se d the le a se d l a nd t hu s ta k i ng away w i th t he re q ui re me n ts of p a y in g the re n t, ma k e s n o se n se s in ce the a sse sse e re q u ired b oth th e le a se d l a n d a n d ow n ed l a n d f or imp a r ti ng t he e du ca ti on a s no p a r t of i t w a s k e p t i dl e . The Ld. C oun se l fo r th e a sse s see , th e re f ore , con ten d e d t hat me r e l y be c a use t he a sse ssee soc ie ty ha d n ot uti l iz e d i ts fu nd s to p ur ch a se the le a se d l a nd bu t ha d in st e a d use d it for b uy in g th e ot he r p ie ce of la n d , t he re fore , c ould not le a d to the c onc l usi on tha t b y d oi ng s o u nd ue a d van ta ge a nd 11 ITA No.567/Chd/2019 A.Y. 2015-16 be ne fi t g ive n to the tr u ste e f r om w h om th e l a n d ha d b e en le a se d .
12 . Ld .D R on t he ot he r h a nd re l ie d on t he or de r of t he Ld. C I T( A) .
13 . W e h a ve he a r d th e r i va l con te n tions ca r e f ul l y and a l so gon e th r oug h the or de r s of the a uth or it ie s be l ow as a l so t he doc ume nts a n d c a se l a w s re fe rre d b e f ore us . 14 . Th e i ss ue f or a d jud i ca ti on b e f ore us i s whe t he r the re nt pa i d b y th e a s se sse e s ocie t y d u ri ng t he ye a r to i ts se cre ta r y Mr A ma r j yot Si n gh a moun ti ng to Rs 6 9 la c s, f or th e bu i ld i ng le a se d out to i t a l ong w i th l a n d, w a s u nr e a s on a bl e a n d he n ce li a b le to be de nie d e xe mp ti on cl a ime d b y it u /s 1 1 of the A ct , b y i nv ok i ng th e p r ovi si on s of se ct ion 13 (1 )© r . w .s 13 ( 3 ) of th e Ac t.
S e ct ion 1 3( 1 ) (© d e n ie s e xe mp ti on gr a nt e d to ch a r i tab le e nt itie s u/s 1 1 / 1 2 o f th e Ac t,w h e n a ny p a r t of t he i n come is fou nd t o b e u se d /a p p l ie d dir e c tly or i nd i re ct ly for t he be ne fi t of pe r son s cl os e ly con ne cte d t o it a s spe c if ie d u/s 13 ( 3 ) o f th e A ct . A s p e r t he Re ve nue in the p re se nt ca s e the re nt p a i d t o the se c re ta r y of the soc ie ty, f or b ui ld i ng ta k e n on le a se fr om i t , a moun ti ng to Rs 6 9 l a cs fo r th e ye a r , 12 ITA No.567/Chd/2019 A.Y. 2015-16 re su lte d i n be ne fi t be i ng gi ve n b y th e a s se sse e s oci e t y to the s pe ci fie d pe rson .
15 . C on si d e r i ng the e n tire f a cts o f th e c a se we a re no t i n a gr ee me nt w it h the Re ve n ue on th i s a c cou nt . Th e a sse sse, we fi n d , h a d d ul y d e mon st ra t e d th e re a son a ble ne s s o f the re nt p a i d co mpa r i ng t he pe r sq . f t. r e n t p a id pe r mon th i n the pre se n t c ase w h ic h c a me to Rs. 10 . 5 3, w i th ot he r comp a r a b le ca s es wh i ch va r i e d f ro m Rs. 2 8 .8 4 on p re mis e s le a se d to P u nj a b N a t ion a l B a n k to Rs .6 2 o n pre mis e s le a se d to I N G Vysy a B a n k i n t he sa me v i ci ni ty. N o i n fi r mit y i n t he a for e s a i d f a cts ha s b ee n p oi nte d out b y th e Re ve nue be fore us, no r ha s ,w e f i nd th e A O d on e s o d ur i ng a sse ssme nt pr oc ee d i ng s when t he sa me w a s br ough t to h i s n oti c e , or the Ld. C I T( A) w ho d i d n ot con si d e r i t n e ce ss a ry t o com me n t on the s a me . Mor eo ve r the re nt pa id to Sh . Ama r j yot S in gh ,w e fi n d wa s f ou nd r e a son a b le b y th e I TA T in A .Y 2 0 0 3 -04 & 20 0 4 -0 5 ,w h e n ide nt ic a ll y e xe mp ti on w a s d e nie d b y t he AO . Th e Ld . DR ha s n ot b ro ugh t to our n oti ce a n y d i stin gui s hi ng fa ct s vi s a v is th os e ye a rs. F ur th e r in sub s e q ue nt a sse ssme nt ye a rs , i .e fr om A .Y 2 01 0 -1 1 TO A .Y 2 0 14 -1 5 ,t he Re ve nue ma de no su ch a d d it io n to th e i nc om e of t he a sse sse e s ocie ty i n s cr uti n y a ss e s sme n t u /s 1 4 3( 3 ) of t he Act .
13 ITA No.567/Chd/2019
A.Y. 2015-16 16 . I n v ie w of th e a fore sa i d f a cts the re i s we f in d n o r ea s on for h ol d in g t he r e n t p a i d by th e a sse sse e s ocie t y to Sh A ma r Jyot Si ng h in t h e imp u gn e d ye a r a s un r e a s ona b le . Th e A O we h a ve n ote d ha s g iv e n n o re a son f or hol d in g th e re nt as un re a son a b le or on t he hi ghe r s id e , e xce p t for me r e ly sta ti n g so, w i tho ut e ve n a d d r e ss in g the comp a r a b le in sta n ce s ci te d b y th e a ss e s see be fore it to e sta b l i sh t he re a son a b le ne ss of th e re nt p a i d . Th e Ld. C I T( A) , w e fi nd , ha s gon e o n a to ta ll y d if f e re n t t a nge nt f or h ol d in g so sta t in g tha t the f a ct th a t th e a ss e ssee so ci e ty p ur c ha se d f ur th e r t ra c ts of l a n d w he n i t s hou l d ha v e p urc ha s e d the l a n d ta k e n on le a se so a s t o do a wa y w i th th e r e nt pa yme n t, sh ow s tha t un du e be ne fi t w as b e i ng gi ve n b y th e a sse ssee soc ie ty to t he le ssor S hr i Ama r j yot S i ngh . We d o n ot f in d a ny me r it i n thi s r e a son i ng of th e Ld . C I T( A ) p a r ti cu la r l y w he n t he a sse sse e h a d demon st ra te d th a t t he la n d p ur c ha se d w a s not lyi n g su r pl u s w i th i t b u t ha d bee n p u t to u se for f ur th e r i ng the ob je cti ve of th e a sse s see soc ie ty o f i mp a r tin g e du ca t ion. Th e a sse ss e e we h a ve no te d h a d fi l e d a comp l e te de ta i l of usa g e of l a nd b oth ow n e d a nd l e a se d by i t. Th e f a cts de ta i le d the re i n h a ve no t bee n c ont ro ve r te d by the Re ve nue. Th e r e for e w he n the e n ti re l a n d wa s r e q u i re d b y t he a sse ssee soci e t y f or i ts obje cti ve of i mp a rt in g e d uca t ion , the re ca n not be sa i d th a t a ny b e ne f it h a d be e n g ive n to the l e ss or by 14 ITA No.567/Chd/2019 A.Y. 2015-16 re ta i ni ng i ts la nd on l e a se i n ste a d of b uyi n g i t off , a s pe r the re a s on in g of th e Ld. C I T( A) a ls o.
17 . C on si d e r i ng the e n ti re f a ct s of th e ca se a s a b ove , we hol d , th a t th e den ia l o f e xe mpt ion u /s 1 1 to the r en t p a id by the a s se s se e soc ie ty to it s se cre ta r y S hr i Ama r j yot Si n gh a moun ti ng to Rs. 69 la c s ,a s p e r th e p r ovi s ion s of se cti on 13 ( 1 )© r . w. s 1 3 ( 3) of t he A ct, w a s n ot a s p e r l a w an d is a ccor d i ng ly d i re cte d to be de le te d.
18 . I n the re s ul t, the a p pe a l of t he asse ssee i s a ccor di ng ly a ll ow e d .
O r de r p r o n o u n ce d i n t he O p e n C ou r t .
Sd/- Sd/-
संजय गग अ नपण
ू ा ग&ु ता
(SANJAY GARG) (ANNAPURNA GUPTA)
याय क सद य/Judicial Member लेखा सद य/Accountant Member
*दनांक /Dated: 31st August, 2020
*रती*
आदे श क त*ल+प अ,े+षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु-त/ CIT
4. आयकर आयु-त (अपील)/ The CIT(A)
5. +वभागीय त न0ध, आयकर अपील$य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar