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II. Direct Taxes Case Laws:
1. New Amazing Shiksha Society Vs. ITO, I.T.A. No. 3550/Del/2018, Date of Pronouncement: 26.02.2019, ITAT - Delhi
Issue:
Whether exemption u/s 10(23)(iiiad) of the Act can be denied only on the basis that surplus arises to the assessee?
Held: No
Brief facts:
The assesseeis a society, registered under Society Registration Act
and has been claiming exemption u/s 10(23C)(iiiad) of the Income Tax
Act, 1961.During the concerned year, the appellant has disclosed total
receipts which includes sale of books &sale of dress against which
expenses are claimed and surplus is shown and claimed exempted. The Ld.
AO made an addition alleging that the purchase and sale of books and
uniforms are not educational activity by considering the surplus
generated as business income.The hon’ble CIT (A)contended that the
entire surplus made during the year is chargeable to taxas the appellant
did not work solely for educational purposes but for profit only and
dismissed the appeal of the assessee.Being aggrieved, the assessee filed
an appeal before Hon’ble ITAT.
Held:
It was held that the exemption u/s 10(23)(iiiad) of the Income
TaxAct, 1961 should not be denied to the assessee as selling of books
anduniform to the students of assessee is part of educational activity
only. Moreover, surplus was merely 12% which is considered as legitimate
for charitable purposes.Therefore, the addition should be deleted.For
these reasons, the question is answered in favour of assessee and
against the revenue.
Hence, the appeal was held in favour of theassessee and against therevenue.
Cases cited:
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Association of School Vendors &Orsvs. Central Board of Secondary
Education &Ors, WP(C) No. 7414/2017, Date of Pronouncement:
21/02/2018(Delhi- HC)
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Queen's Educational Society Vs Commissioner of Income-tax [2015] 372ITR 699 (SC)
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St. LawrenceEducational Society (Regd.) vs. CIT (2013) 353 ITR 320 (Delhi)
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CIT vs.Surat Art Silk Clothes Manufacturers Association (1980) 121 ITR 1(SC)
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Pinegrove InternationalCharitable Trust vs. UOI 188 taxmann 402 (2010) (P&H)
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CIT vs. Delhi Kannada Education Society (2000) 246 ITR731 (Delhi- HC)
(Please click here for judgment)
2. Mahavir Jhanwar Vs. ITO, I.T.A. No. 2474/Kol./2018, Date of Pronouncement: 01.02.2019, ITAT - Kolkata
Issue:
Was the Ld. AO justified in drawing conclusion only on the basis of
report of Investigation Wing without controverted the evidences filed by
the assesseein support of the genuineness of the transactions?
Held: No
Brief facts:
The assesseehad earned Long Term Capital Gains onpurchase and sale of
the shares. The Ld. AO made an addition on account of bogus long-term
capital gain on the basis ofreport of Investigation Wing and on general
observations. The assessee was never confronted with any statement or
material on the basis on which conclusion were drawn against him. The
evidence produced by the assessee in support of the genuinenessof the
transaction remains unchallenged & uncontroverted. The CIT(A) has
relied upon “circumstantial evidence” and“human probabilities” to uphold
the findings of the Ld. AO.Being aggrieved, the assessee filed an
appeal before the Hon’ble ITAT.
Held:
It washeld that decision in such cases should be based on evidence
and not on generalisation, human probabilities, suspicion,conjectures
and surmises.the assessee has filed all necessary evidences in support
of the transactions. Some ofthese evidences are (a) evidence of purchase
of shares, (b) evidence of payment forpurchase of shares made by way of
account payee cheque, copy of bank statements, (c)copy of balance sheet
disclosing investments, (d) copy of demat statement reflectingpurchase,
(e) copy of merger order passed by the High Court , (f) copy of
allotment ofshares on merger, (g) evidence of sale of shares through the
stock exchange, (h) copy ofdemat statement showing the sale of shares,
(i) copy of bank statement reflecting salereceipts, (j) copy of brokers
ledger, (k) copy of Contract Notes etc.For these reasons, the question
is answered in favour of theassessee and against the revenue.
Hence, the appeal was held in favour of the assesseeandagainst therevenue.
Cases Referred:
- DICT vs. Sunita Khemka, ITA No.714 to 718/Kol/2011, ITAT- Kolkata
- CIT vs. Carbo Industrial Holdings Ltd., 214 ITR 244 HC- Calcutta
- CIT vs. Shri Mukesh RatilalMarolia, ITA No.456 of 2007,HC- Bombay
- Manish Kumar Baid vs. ACIT, ITA No.1236-1237/KOL/2017, ITAT- Kolkata
(Please click here for judgment)
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