Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (6) TMI 218 - ITAT AGRAExemption u/s 11 & 12 denied - matter referred to Valuation Officer for determining the cost of construction of building and adopting the same - allegation of violation of provision of section 13(1)(c) read with section 13(3) - inflated construction cost of the building - assessee society is running an educational school & during the assessment proceedings A.O noticed that the assessee has constructed a building - Held that:- The onus lies on the Revenue to bring on record, cogent material/evidence to establish that the trust/charitable institution is hit by the provisions of section 13. As in the present case A.O. has completely failed to bring any sort of evidence or material based on which it can be said that the Managing Trustee Shri Vipin Varshney benefited directly or indirectly to invoke section 13 of the Act. The Revenue failed to discharge burden in this regard. Therefore, in absence of the material, the view of Revenue authorities cannot be up held. The Revenue is of the view that as per the provisions of section 13(1)(c)(ii) it is deemed to benefit to the Managing Trustee as covered by the words 'directly and indirectly'. It is to note that the Revenue authorities have failed to distinguish difference between indirect benefits and presumption of benefits. Both are separate situations. Even in case of indirect benefit, there must be certain evidences, it can not be held on presumption basis that Managing Trustee was benefited by inflating construction cost. In the case under consideration, entire basis of the A.O. is on presumption and such presumption is not sustainable in law. A.O. referred the matter during the assessment proceedings to the D.V.O. under section 142A which is contrary to the law laid down in the case of Sargam Cinema v. CIT [2009 (10) TMI 569 - Supreme Court of India] wherein held that reference under section 142A cannot be made unless the books of account is not rejected. In the case under consideration AO referred the matter to DVO without rejecting books of account which is contrary to the law. Reference under section 142A can be made by the A.O. only under those circumstances for estimating the value of the investment referred in the section 69 to 69B or fair market value of any property provided in the section. As per section 69 if the investment was not recorded in the books of account and under section 69B under the circumstances where the A.O. was of the view that the investment acquiring prescribed asset exceeds the amount recorded in the books of account. In the case under consideration, section 69 is not applicable since the investment has been recorded in the books of account. Section 69B is also not applicable. As per the A.O. the assessee has shown excess investment in the books of account. Therefore, as per condition prescribed under section 142A(1) read with section 69 and 69B the reference itself is an invalid reference. In favour of assessee.
|