Try our new portal www.taxtmi.com for a better experience!

Home

Case Laws

Home Case Index All Cases Income Tax Section Wise 1995 1995 (8) This

Law
Court
Citation	- -
Landmark
Order by

Advanced Search Options

Case Laws

Showing 161 to 180 of 266 Records

1995 (8) TMI 112

Issues Involved:
1. Jurisdiction of the Drugs Inspector to issue notice and initiate prosecution.
2. Maintainability of writ petitions under Article 226 of the Constitution of India to quash criminal proceedings.
3. Requirement of sanction from the Director of Drugs Control for initiating prosecution.
4. Competency of the Drugs Inspector to act in the matter.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Drugs Inspector to Issue Notice and Initiate Prosecution:
The appellant contended that the Drugs Inspector (second respondent) lacked jurisdiction to issue the notice or initiate prosecution since the appellant did not reside within the territorial jurisdiction of the first or second respondent. The court referred to Section 22 of the Drugs and Cosmetics Act, which defines the powers of the Inspector, including inspecting premises where drugs are manufactured, sold, or stocked, and taking samples for analysis. The court emphasized that the place of commission of the offense is what matters, not the residence of the accused. The second respondent had jurisdiction to launch prosecution because the offending drug was found within his jurisdiction. Consequently, the second respondent was well within his power and jurisdiction to initiate prosecution.

2. Maintainability of Writ Petitions Under Article 226 of the Constitution of India to Quash Criminal Proceedings:
The appellant argued that a writ petition under Article 226 is maintainable to quash criminal proceedings, even at this stage, and that Section 482 of the Code of Criminal Procedure is not an effective alternative remedy. The court referred to the decision in State of Haryana v. Ch. Bhajan Lal, which provided guidelines for when extraordinary powers under Article 226 or inherent powers under Section 482 could be invoked. The court found that the case at hand did not meet the criteria for invoking these powers and agreed with the learned single judge's decision to dismiss the writ petitions without going into the merits of the claims. The court also referenced the decision in Santhosh Dev v. Archana Guha, which held that quashing criminal proceedings under Article 226 is warranted only in cases of grave illegality.

3. Requirement of Sanction from the Director of Drugs Control for Initiating Prosecution:
The appellant contended that the prosecution was vitiated because the Inspector did not obtain sanction from the Director of Drugs Control. The court referred to the decision in Orient Paper Mills v. Union of India, which held that a statutory authority cannot take instructions from a higher authority while exercising statutory powers. However, the court distinguished this case, noting that obtaining inter-departmental sanction is an administrative matter and does not involve quasi-judicial powers. The court concluded that the decision to prosecute, which is an administrative measure to protect citizens from vexatious prosecutions, did not require sanction from the Director of Drugs Control.

4. Competency of the Drugs Inspector to Act in the Matter:
The appellant questioned the competency of the second respondent to act in the matter. The court reiterated that Section 22 of the Drugs and Cosmetics Act empowers the Inspector to inspect premises and take necessary actions. The court found no prima facie lack of jurisdiction or competency in the second respondent to initiate prosecution. The court emphasized that any extenuating circumstances claimed by the appellant should be addressed during the trial and not in proceedings under Article 226.

Conclusion:
The court dismissed the appeals, agreeing with the learned single judge's decision to reject the writ petitions and leaving all contentions to be decided in the pending proceedings before the first respondent, except the one relating to the competence or jurisdiction of the second respondent to launch prosecution.
1995 (8) TMI 111

Issues Involved:
1. Reconciliation of Supreme Court decisions.
2. Obligation of collection.
3. Purpose of collecting deposits.
4. Comparison of bye-laws.
5. Interpretation of Bye-law No. 61A.
6. Adjustment of deposits towards losses.
7. Ownership of deposits during the collection period.
8. Ownership and use of money.
9. Interpretation of Bazpur Co-op. Sugar Factory decision.
10. Nature of trading operations and collections.
11. Relationship of creditor and debtor.
12. Validity of Bye-law No. 61A.
13. Classification of deposits as loans or income.
14. Nature of various funds collected.
15. Non-application of Madhya Pradesh High Court decision.

Detailed Analysis:

1. Reconciliation of Supreme Court Decisions:
The Tribunal reconciled the Supreme Court decisions in CIT vs. Bijli Cotton Mills (P) Ltd. and Chowringhee Sales Bureau (P) Ltd. vs. CIT, concluding that the taxability of a trading receipt as income depends on the nature, object, and obligation of the receipt, not merely on the method or point of collection. This was done without considering the decisions in CIT vs. Bazpur Co-operative Sugar Factory and Punjab Distilling Industries Ltd.

2. Obligation of Collection:
The Tribunal held that the key factor is the obligation under which the amount was collected, rather than the method or timing of collection, disregarding the Supreme Court's decisions in Bazpur Co-op. Sugar Factory and Punjab Distilling Industries P. Ltd.

3. Purpose of Collecting Deposits:
The Tribunal determined that the deposits were collected with the purpose of issuing shares after repaying loans, even though it acknowledged that the primary purpose was to secure funds to repay loans and then convert the deposits into share capital, leading to a contradiction.

4. Comparison of Bye-laws:
The Tribunal concluded that there is a total difference and dissimilarity between the unamended bye-law of Bazpur Co-op. Sugar Factory and Bye-law No. 61A, despite substantial similarities except for the loss Equilisation Fund.

5. Interpretation of Bye-law No. 61A:
The Tribunal interpreted Bye-law No. 61A, focusing on the primary purpose of repayment of loans and time deposits, and found that non-refundable deposits were to be converted into share capital only after the repayment of loans.

6. Adjustment of Deposits Towards Losses:
The Tribunal concluded that only when part of the deposit is adjusted towards losses does the amount belong to the assessee; otherwise, it remains with the depositors.

7. Ownership of Deposits During Collection Period:
The Tribunal held that during the period the deposits remained with the assessee, they were regarded as a liability and not the assessee's own money.

8. Ownership and Use of Money:
The Tribunal concluded that the depositors, as lenders, are the owners of the money, while the assessee is entitled to use the money, but does not own it.

9. Interpretation of Bazpur Co-op. Sugar Factory Decision:
The Tribunal interpreted the Bazpur Co-op. Sugar Factory decision to mean that only deposits that get consumed amount to trading receipts, ignoring the broader implications of the decision.

10. Nature of Trading Operations and Collections:
The Tribunal distinguished between collections involved in trading operations and mere retention of money, concluding that the trading operation was only an occasion for retention of money, not a consideration for supply of cane.

11. Relationship of Creditor and Debtor:
The Tribunal held that the payment of interest on deposits indicates a creditor-debtor relationship, contrary to the argument that such deposits were not loans.

12. Validity of Bye-law No. 61A:
The Tribunal rejected the argument that Bye-law No. 61A was a make-believe affair, despite the fact that loans and other liabilities were nil and the State Government's share capital was insignificant.

13. Classification of Deposits as Loans or Income:
The Tribunal treated non-refundable and refundable deposits as loans and not as income, based on their temporary possession and the lack of voluntariness or mutual understanding between the assessees and the cane growers.

14. Nature of Various Funds Collected:
The Tribunal held that collections for various funds like the Chief Minister's Fund, Hutment Fund, Small Savings Scheme, and Y.B. Chavan Memorial Fund were not trading receipts liable to tax, as they were impressed with a legal obligation for specific purposes.

15. Non-application of Madhya Pradesh High Court Decision:
The Tribunal did not follow the Madhya Pradesh High Court's decision in Jiwajirao Sugar Co-op. Ltd. vs. CIT regarding the Area Development Fund and Cane Development Fund, based on its interpretation of the nature and purpose of these funds.

Conclusion:
The Tribunal's findings and interpretations led to the conclusion that the non-refundable deposits and various funds collected by the assessee were not to be treated as trading receipts and should not have been brought to tax. The decision was based on a detailed analysis of the nature, purpose, and obligations associated with the collections, as well as a comparison of relevant Supreme Court decisions and bye-laws.
1995 (8) TMI 108

Issues Involved:
1. Taxability of certain deposits received by the assessee.
2. Addition of Rs. 70,000 as income from undisclosed sources.
3. Disallowance of Rs. 13,42,000 u/s 40A(3) of the Income-tax Act, 1961.
4. Disallowance of Rs. 6,13,000 on account of defective vouchers.
5. Addition of Rs. 50,000 as unexplained cash credits.

Summary:

1. Taxability of Certain Deposits:
The common point in these appeals relates to the taxability of certain deposits received by the assessee from flat purchasers for various purposes like transformer installation, stamp duty, water development, etc. The Assessing Officer treated these deposits as trading receipts based on directions u/s 144A, following the Supreme Court decision in Chowringhee Sales Bureau (P.) Ltd v. CIT. The CIT(A) upheld this view, noting that the amounts collected were trading receipts and not refundable. The Tribunal, however, disagreed, stating that these amounts were collected for specific purposes and were liabilities to be discharged by the assessee. The Tribunal held that these amounts could not be considered trading receipts and deleted the additions.

2. Addition of Rs. 70,000 as Income from Undisclosed Sources:
During a search, certain transactions were found that were not recorded in the books. The assessee admitted these transactions and offered the amount for disclosure. The Assessing Officer assessed Rs. 70,000 as income from undisclosed sources for the assessment year 1989-90. The CIT(A) upheld this addition. The Tribunal confirmed the addition, stating that the unexplained investment or expenditure should be deemed as income u/s 69, 69B, and 69C, even though it resulted in double taxation.

3. Disallowance of Rs. 13,42,000 u/s 40A(3):
The assessee admitted to paying Rs. 13,42,000 in cash to M/s. Mehta Construction Co., which was not recorded in the books. The Assessing Officer disallowed this amount u/s 40A(3) due to non-compliance with the requirement of payment by crossed cheque or bank draft. The CIT(A) upheld this disallowance. However, the Tribunal, by majority opinion, held that the payment was genuine and covered by exceptional circumstances under rule 6DD(j). Therefore, the disallowance was deleted.

4. Disallowance of Rs. 6,13,000 on Account of Defective Vouchers:
During the search, defective and unsigned vouchers were found. The assessee declared Rs. 6,13,000 as income under section 132(4) but also claimed it as an expenditure. The Assessing Officer disallowed the claim, and the CIT(A) confirmed it. The Tribunal allowed the deduction, stating that the declaration had a direct nexus with the expenditure and the department could not turn around to disallow the claim after accepting the income.

5. Addition of Rs. 50,000 as Unexplained Cash Credits:
The assessee received loans from five persons, which were not substantiated with confirmations or bank passbooks. The Assessing Officer added Rs. 50,000 as unexplained cash credits, and the CIT(A) upheld this addition. The Tribunal confirmed the addition, stating that the assessee failed to establish the capacity and genuineness of the transactions.
1995 (8) TMI 105

Issues:
Assessment under section 143(1) for two years, liability for luxury tax, additions under various heads, validity of reassessment proceedings, jurisdiction of the Income-tax Officer, consistency with original assessment under section 143(1).

Analysis:
The judgment by the Appellate Tribunal ITAT NAGPUR involved two appeals concerning the same assessee with similar points, hence disposed of together. The Assessing Officer noted that the assessee had created a liability for luxury tax but did not pay the same, leading to a dispute under section 43B of the Act. Additionally, expenses under various heads were not properly vouched, resulting in further additions to the total income for both years. The CIT(A) referred to the Supreme Court decision in CIT v. Sun Engg. Works (P.) Ltd and deleted the additions made by the Assessing Officer, emphasizing that additions should only be made if it can be proven that they had escaped assessment during the original assessment under section 143(1).

In the subsequent analysis, it was highlighted that no exemption can be claimed during reassessment if not claimed during the original assessment, citing CWT v. Ballarpur Industries Ltd. The judgment also referred to the provisions of section 147 being for the benefit of revenue and not the assessee, as per Kewaldas Ranchhoddas v. CIT. The judgment further discussed the initiation of reassessment proceedings under section 147, emphasizing that once initiated, the entire assessment starts afresh, as held in various court decisions. The Income-tax Officer's jurisdiction is limited to the escaped assessment, and reassessment should not revise matters not subject to proceedings under section 147.

Ultimately, the Appellate Tribunal upheld the CIT(A)'s decision to delete the additions made by the Assessing Officer, as it was not proven that the amounts had escaped assessment earlier. The judgment concluded by dismissing the appeals filed by the Department, affirming the CIT(A)'s order.
1995 (8) TMI 103

Issues:
1. Disallowance of depreciation claimed by the assessee for the assessment year 1990-91.
2. Whether the business of the assessee had commenced and if depreciation was admissible.

Detailed Analysis:
1. The appeal was against the order of the CIT(A) upholding the decision of the Assessing Officer to disallow the depreciation claimed by the assessee. The Assessing Officer disallowed the depreciation as the business activities had not commenced, resulting in the disallowance of Rs. 9,48,992 claimed by the assessee. The CIT(A) upheld this decision, stating that no commercial production had started by the assessee. The case revolved around whether the business had commenced and if commercial billing had occurred for the activities.

2. The assessee, a resident company engaged in creating graphics using laser technology, returned a loss of Rs. 12,29,030 for the accounting year ending on 31-3-1990. The Assessing Officer contended that since the business had not started, depreciation was not admissible. The assessee argued that trial production had been done, and a demonstration was made to customers on 31-3-1990. The Assessing Officer doubted this claim based on the absence of commercial billing and concluded that no commercial production had started. The CIT(A) sustained the disallowance of depreciation, prompting the appeal.

3. During the appeal, the assessee relied on a Tribunal decision where depreciation was allowed for vehicles kept ready for use, even if not utilized due to work scarcity. The Tribunal directed the Assessing Officer to allow depreciation in such cases. The business of the assessee involved services like phototype setting and pre-press activities using specific equipment. The integration of the system was described involving networking of computers and systems. The claim that trial production was done and the system was ready for commercial production was supported by evidence, including a report from Linotype Ltd. The Tribunal held that the claim for depreciation was valid, citing similar cases and the peculiar nature of the business and machinery involved.

4. The Tribunal found the claim of the assessee regarding trial production and readiness for commercial production to be valid and authentic. Relying on precedents and the nature of the business, the Tribunal directed the Assessing Officer to grant the depreciation claimed by the assessee. The decision was based on the integration of the system, evidence presented, and the readiness of the system for commercial production pending customer orders. The appeal was allowed in favor of the assessee.
1995 (8) TMI 101

Issues:
1. Validity of notice of demand and assessment order.
2. Jurisdiction of CIT (A) to set aside assessment order and issue directions.
3. Appeal filed under section 154 of the Act being premature.

Detailed Analysis:

Issue 1: Validity of notice of demand and assessment order
The appeal in question pertains to the assessment year 1987-88 and arises from the order of CIT(A) dated 9-11-1990. The key contention revolved around the validity of the notice of demand and the assessment order. The assessee argued that since the assessment order did not bear a date and the notice of demand was served before the completion of the assessment, the demand notice was invalid. The CIT (A) set aside the assessment served with the demand notice, directing the AO to pass a fresh assessment order. The Tribunal analyzed the provisions of Section 156 of the Income-tax Act, emphasizing that a notice of demand arises in consequence of an order passed under the Act. While there is no statutory requirement to serve the assessment order along with the notice of demand, the failure to do so does not invalidate the assessment. The Tribunal held that a defective demand notice does not vitiate the assessment proceedings, citing relevant case law to support this position.

Issue 2: Jurisdiction of CIT (A) to set aside assessment order and issue directions
The assessee contended that the CIT (A) exceeded jurisdiction by setting aside the assessment order and issuing directions for a fresh assessment. The Tribunal noted that the CIT (A) did not adjudicate on the grounds raised by the assessee and did not consider whether the assessment was barred by limitation. As per Section 249 of the Act, an appeal can be filed within 30 days of the service of the notice of demand, but the CIT (A) had held the notice of demand to be invalid. Therefore, the Tribunal found that the directions issued by the CIT (A) were not warranted and set them aside. The matter was remanded to the CIT (A) for rehearing and disposal in accordance with law.

Issue 3: Appeal filed under section 154 of the Act being premature
In another appeal related to an application under section 154 of the Act, the assessee argued that the notice of demand served was not based on the assessment order, rendering the appeal premature. The CIT (A) rejected the application, stating that there was no mistake apparent from the record. Since the impugned directions in the previous appeal were set aside, the present appeal was deemed infructuous and dismissed.

In conclusion, the Tribunal addressed the validity of the notice of demand and assessment order, the jurisdiction of the CIT (A) to set aside the assessment order, and the issue of premature appeal under section 154 of the Act, providing detailed analysis and legal interpretations for each issue raised in the appeals.
1995 (8) TMI 100

Issues Involved:
1. Whether the land in question is agricultural land or non-agricultural land.
2. Whether the value of the land should be included in the taxable wealth of the assessee.

Detailed Analysis:

1. Whether the land in question is agricultural land or non-agricultural land:

The primary issue revolves around the classification of the land as agricultural or non-agricultural. The revenue contended that the land was not agricultural, as the assessee intended to develop it into a residential colony and had obtained necessary approvals for the same. The Assessing Officer noted that despite the land being recorded as agricultural in revenue records, there was a clear intention to use it for commercial purposes, evidenced by the sale of a plot and the construction of a house. The lack of evidence for ongoing agricultural operations further supported this view.

The assessee, however, argued that the land was used for agricultural purposes even after obtaining approvals for residential development. They provided evidence including revenue records, purchase deeds, and affidavits indicating agricultural use and income from crops. The DCWT(A) supported the assessee's claim, citing documentary evidence and previous judicial decisions that agricultural operations on land approved for residential use do not alter its agricultural character.

Upon appeal, the Tribunal considered the facts and circumstances, emphasizing that the character of the land should be determined by its intended and actual use. The Tribunal noted that the land was converted for non-agricultural use as early as 22nd June 1979, and the assessee's subsequent actions, including plotting and selling parts of the land, indicated a shift from agricultural to non-agricultural use. The Tribunal concluded that despite some agricultural activities, the primary intention and use of the land were non-agricultural, reversing the DCWT(A)'s decision.

2. Whether the value of the land should be included in the taxable wealth of the assessee:

The second issue pertains to whether the value of the land should be included in the taxable wealth. The assessee argued that since the land was agricultural, it should be exempt from wealth tax. The DCWT(A) agreed, excluding the land's value from the taxable wealth based on its agricultural classification.

The Tribunal, however, determined that the land's character had changed to non-agricultural due to the approved residential development and subsequent actions by the assessee. Consequently, the land did not qualify for exemption under the Wealth-tax Act. The Tribunal directed the DCWT(A) to reassess the land's value for inclusion in the taxable wealth, reversing the previous decision.

Conclusion:

The Tribunal held that the land in question should be classified as non-agricultural for wealth tax purposes, reversing the DCWT(A)'s decision. The value of the land is to be included in the taxable wealth of the assessee, and the DCWT(A) is directed to determine the valuation after providing an opportunity for both parties to be heard.
1995 (8) TMI 99

Issues:
1. Treatment of a sum received by the assessee for acting in a film produced by a firm in his capacity as a partner.
2. Disallowance of the sum under section 40(b) and section 67 in the firm's assessment.
3. Invocation of section 155 to substitute the inclusion of firm's income in the assessee's assessment.
4. Jurisdiction of the Assessing Officer under section 155 to consider the assessee's claim.
5. Applicability of the Full Bench decision of the Patna High Court in a similar case.

Detailed Analysis:
1. The appeal involved a dispute regarding the treatment of a sum of Rs. 50,000 received by the assessee for acting in a film produced by a firm in which he was a partner. The assessee contended that the sum was not assessable in the year under consideration as he maintained his accounts on a cash basis and no actual payment had been made to him by the firm. The Income-tax Officer accepted the returned income of the assessee but later invoked section 155 to include the firm's income in the assessee's assessment.

2. In the firm's assessment, the sum of Rs. 50,000 was treated as remuneration paid to the assessee and disallowed under section 40(b) and section 67. The Commissioner of Income-tax (Appeals) upheld the inclusion of the firm's income in the assessee's assessment, citing the provisions of section 67(1)(b) regarding the computation of a partner's income.

3. The Tribunal considered the method of computing a partner's income under section 67, which provides for deductions based on various criteria such as interest, salary, commission, or other remuneration paid to a partner by the firm. The Tribunal emphasized that the assessee, in this case, was entitled to receive the sum for acting in a film and not in his capacity as a partner, thus subjecting the income to other provisions of the Income Tax Act.

4. The Tribunal deliberated on the jurisdiction of the Assessing Officer under section 155 to consider the assessee's claim and concluded that the Assessing Officer should have allowed the assessee to raise objections when the matter was first put against him. The Tribunal held that the CIT (Appeals) erred in rejecting the claim of the assessee and distinguished a Full Bench decision, emphasizing that the assessee could claim the amount as not taxable based on the precedent.

5. Ultimately, the Tribunal directed the Income Tax Officer to exclude the sum of Rs. 50,000 from the income of the assessee, allowing the appeal in favor of the assessee based on the interpretation of relevant provisions and legal precedents.
1995 (8) TMI 98

Issues Involved:

1. Taxability of fees received by GFA and ETC.
2. Assessability of 10% down payment received by GFA and ETC.
3. Jurisdiction of the CIT to invoke provisions of sec. 263.

Issue-wise Comprehensive Details of the Judgment:

1. Taxability of Fees Received by GFA and ETC:

The assessees, GFA and ETC, were appointed as major contractors under agreements with RINL for setting up various mills. The fees received by the assessees were claimed as exempt under Article III of the Agreement for Avoidance of Double Taxation (AADT) between India and the Federal Republic of Germany. However, the Assessing Officer taxed the fees as "fees for technical services" u/s 9(1)(vii) of the IT Act read with Explanation 2.

2. Assessability of 10% Down Payment Received by GFA and ETC:

The Commissioner of Income-tax (CIT) observed that only 90% of the fees were assessed, and the 10% down payment received earlier was not taxed. The CIT directed the inclusion of the entire consideration in the assessment, considering the 10% down payment as part of the income for the years when the invoices were raised. The CIT (Appeals) deleted the addition, agreeing with the assessee that the down payment was income for the earlier years and considered as such by the ITO in granting No Objection Certificate.

The Tribunal held that the 10% down payment was an advance payment for services to be rendered in future and not income of the year of receipt. The income accrued when the services were rendered and the invoices raised. The Tribunal upheld the CIT's order for including the entire amount in the income of the years when the services were rendered.

3. Jurisdiction of the CIT to Invoke Provisions of Sec. 263:

The assessee challenged the jurisdiction of the CIT to reopen the issue, arguing that a final decision was taken by the CBDT exempting the down payment in the earlier year. The Tribunal rejected this contention, stating that the CBDT's decision was based on the provisions of AADT then prevailing, and the CIT was right in considering the down payment as part of the income of the years when the services were rendered.

Conclusion:

The Tribunal allowed the department's appeals and dismissed the assessee's appeals, holding that the entire invoiced amount accrued to the assessees when the services were rendered, and the 10% down payment was an advance payment. The CIT was justified in invoking sec. 263 and directing the inclusion of the entire consideration in the assessment.
1995 (8) TMI 97

Issues involved: Assessment of default in advance tax payment and levy of interest u/s 234C of the IT Act.

Assessment of Default in Advance Tax Payment:
The case involved a limited company that started its business just 15 days before the first instalment of advance tax was due. Due to the sudden increase in turnover after the second instalment was due, the company faced difficulty in anticipating the income and consequent tax liability. The Assessing Officer accused the company of default in advance tax payment, but it was argued that it was impossible for the company to anticipate such a spurt in sales and income. The principle of "lex non cogit ad impossibilia" was cited, stating that the law does not compel a person to do what is impossible for them to perform.

Levy of Interest u/s 234C of the IT Act:
Section 234C of the IT Act deals with interest for deferment of advance tax payment. The section requires an assessee to pay advance tax based on their estimated current income. The law makes the liability to pay advance tax dependent on the estimate made by the assessee, which should be based on available material and circumstances. In this case, it was argued that since the company had not yet started earning income, it was unreasonable to expect them to estimate advance tax liability and pay tax. Therefore, it was contended that no interest should be levied on the company. The decision of the CIT (Appeals) to delete the interest levy was upheld based on the principle that impossibility of performance is a valid excuse in law.

Additional Point:
The departmental representative contended that no appeal is maintainable against the charge of interest u/s 234C. However, it was argued that the interest charged under this section is a part of the assessment, and the Supreme Court decision in the case of Central Provinces Manganese Ore Co. Ltd v. CIT supports the appeal against the interest charge.

Conclusion:
The Appellate Tribunal dismissed both the appeal by the revenue and the cross objection by the assessee. The appeal challenging the levy of interest u/s 234C was rejected based on the principle of impossibility of performance, and the cross objection was dismissed due to being filed late without a petition for condonation.
1995 (8) TMI 96

Issues Involved:
1. Whether the amount credited to Delhi Administration and other Government Economic Services constitutes a diversion of income or an application of income.
2. Whether the margin of profit fixed retrospectively by Delhi Administration affects the income accrued to the assessee.
3. Whether the creation of Transportation Infrastructure Utilisation Fund and the subsequent expenditure is deductible.
4. Disallowance of interest on borrowed money from Delhi Administration.
5. Disallowance under section 40A(3) of the Income-tax Act, 1961.

Detailed Analysis:

1. Diversion of Income vs. Application of Income:
The primary issue was whether the amounts of Rs. 24,17,65,160 for the assessment year 1990-91 and Rs. 28,86,02,020 for the assessment year 1991-92, credited to Delhi Administration and other Government Economic Services, constituted a diversion of income or an application of income. The Income Tax Appellate Tribunal (ITAT) held that the amounts were not the income of the assessee (DTTDC) but were diverted by an overriding title before reaching the assessee. This conclusion was drawn from the fact that the amounts were directed to be paid to the Government as per the instructions of the Delhi Administration, which were binding and not self-imposed or gratuitous.

2. Retrospective Fixation of Profit Margin:
The retrospective fixation of the profit margin by the Delhi Administration was another critical issue. The ITAT noted that the margin of profit was fixed retrospectively by the Lt. Governor of Delhi, and the assessee did not dispute this fixation. The tribunal emphasized that the retrospective fixation effectively sliced away a part of the corpus of the right to receive the entire income, thus constituting a diversion of income by an overriding title. Therefore, the amounts directed to be paid to the Government could not be treated as income accrued to the assessee.

3. Creation of Transportation Infrastructure Utilisation Fund:
The assessee created a Transportation Infrastructure Utilisation Fund by debiting the profit and loss account with amounts equivalent to the margin of profit allowed by the Delhi Administration. The ITAT held that the creation of such a fund was not based on any obligation to spend a fixed amount per bottle of liquor sold. Instead, the obligation was to construct infrastructure facilities as directed by the Delhi Administration. The tribunal concluded that the expenditure should be allowed as and when incurred, rather than based on a provision without any basis.

4. Disallowance of Interest:
The disallowance of interest on borrowed money from Delhi Administration was addressed by setting aside the issue and restoring it to the file of the Assessing Officer. The ITAT directed the Assessing Officer to allow the interest as per the rate finalized with the Delhi Administration, noting that the rate of interest had been finalized in subsequent years.

5. Disallowance under Section 40A(3):
The ITAT upheld the disallowance of Rs. 36,920 under section 40A(3) of the Income-tax Act, 1961. The tribunal agreed with the findings of the CIT (Appeals) that the payments were made to the assessee's own employees and were not covered by rule 6DD(j), as the assessee could not prove that the payments were made under exceptional circumstances.

Conclusion:
The ITAT dismissed the revenue's appeals, upholding the CIT (Appeals)'s decision that the amounts credited to Delhi Administration were not the income of the assessee. The tribunal also directed the allowance of expenditure on infrastructure facilities as and when incurred and restored the issue of interest disallowance to the Assessing Officer. The disallowance under section 40A(3) was confirmed due to a lack of corroborative evidence.
1995 (8) TMI 95

Issues:
1. Rejection of request for rectification of adjustments made by the Assessing Officer under section 143(1)(a) regarding provision of gratuity.
2. Disallowance of provision for gratuity under section 115J of the Income-tax Act.
3. Nature and character of provision for payment of gratuity.
4. Whether provision for gratuity was an ascertained liability.

Detailed Analysis:
1. The appeal was against the rejection of the request for rectification of adjustments made by the Assessing Officer under section 143(1)(a) regarding the provision of gratuity for the assessment year 1989-90. The Assessing Officer added a sum of Rs. 6,20,000 representing provision of gratuity for computing book profit under section 115J of the Income-tax Act. The assessee claimed that the provision for gratuity was an ascertained liability payable and due to the employees. The Assessing Officer rejected the application stating it was not an ascertained liability at the close of the financial year. The CIT(A) upheld the action of the Assessing Officer, leading to the appeal.

2. The bone of contention was whether the provision made by the assessee for gratuity was an ascertained liability and should not be added for the purposes of section 115J in adjustments made under section 143(1)(a) of the Income-tax Act. The assessee contended that the provision for gratuity was made on a legal and scientific basis and was definitely an ascertained liability. The ITAT considered the nature and character of the provision for gratuity to determine if it was a contingent liability or an ascertainable liability. The ITAT noted that the Assessing Officer assessed the provision of liability as "otherwise than ascertained" without examining any material available on record.

3. The ITAT referred to relevant case law, including decisions by the Hon'ble Supreme Court, to establish that a present liability of gratuity on a scientific basis can be deducted from the profit of the year. The ITAT emphasized that the present discounted value of a contingent liability can be ascertainable and deductible as a trading expense if sufficiently certain to be capable of valuation. The ITAT highlighted that the nature of the liability under the scheme of gratuity must be properly examined to determine if it can be considered an ascertained liability.

4. The ITAT concluded that the addition of Rs. 6,20,000 for the purpose of section 115J of the Income-tax Act without hearing the assessee and without examining all relevant material was without jurisdiction. The ITAT directed the Assessing Officer to carry out the necessary rectification, emphasizing that the adjustments in question could not be made under section 143(1) of the Income-tax Act without hearing the assessee and examining all relevant material. The ITAT allowed the appeal of the assessee based on the above analysis and findings.
1995 (8) TMI 94

Issues Involved:
1. Assessability of deposits received by the assessee.
2. Allowance of expenses claimed by the assessee on account of advertisement, commission, and service charges.
3. Verification of gifts received from abroad.

Issue-wise Detailed Analysis:

1. Assessability of Deposits Received by the Assessee:

The primary issue revolved around whether the deposits received by the assessee from DAPL should be assessed as income. The AO had assessed these deposits as income, but the first appellate authority deleted this addition. The Tribunal referenced the case of Bharat Hotels Ltd. vs. Dy. CIT (1995) 53 ITD 450 (Del), which held that such deposits did not constitute income. This issue became academic due to the subsequent agreement dated 13th November 1987, which cancelled the earlier agreement dated 31st March 1984, and resulted in the refund of the entire deposits. Consequently, there was no longer any scope for controversy regarding the assessability of these deposits. The Tribunal affirmed the first appellate authority's decision to delete the additions, and the Revenue's appeals were dismissed.

2. Allowance of Expenses Claimed by the Assessee:

The assessee claimed deductions for expenses related to advertisement, commission, and service charges as per the agreement dated 31st March 1984. The AO disallowed these expenses, reasoning they were not incurred for earning income. The first appellate authority upheld this disallowance. The Tribunal examined whether the termination agreement dated 13th November 1987 nullified the assessee's obligation to share expenses incurred by DAPL. The termination agreement explicitly stated that the parties were no longer required to share any expenses for raising shop deposits as mentioned in the original agreement. Consequently, the Tribunal concluded that the assessee was not entitled to any deduction for these expenses. Even if the termination agreement could be interpreted differently, any expenses incurred by the assessee post-refund would be considered voluntary and not for business purposes, thus not allowable as legitimate expenditure. The Tribunal upheld the Revenue's disallowance of the expenses.

3. Verification of Gifts Received from Abroad:

For the assessment year 1985-86, the issue concerned a sum of Rs. 6,27,643 received as a gift via a bank draft dated 7th February 1984. The first appellate authority set aside this issue, directing the AO to verify the claim and decide if it pertained to the assessment year 1984-85. The assessee contended that the addition should have been deleted without verification. The Tribunal found no merit in this contention, supporting the first appellate authority's directive for verification. The Tribunal clarified that if the AO determined the gift related to the year under appeal, the decision should consider the Tribunal's earlier ruling in the related case of Smt. Shama Suri, G. Sagar & G. Sagar Suri & Sons ITA No. 3089/Del/1987, 794/Del/1986, 6738/Del/1985 dated 28th September 1990. Consequently, the Tribunal declined to interfere with the first appellate authority's order.

Conclusion:

The Tribunal dismissed the appeals of the Revenue and, subject to the observations regarding the verification of the gift, also dismissed the appeals of the assessee.
1995 (8) TMI 93

Issues Involved:
1. Validity of reopening of assessment under section 147 of the Income-tax Act.
2. Whether the reopening of assessment was barred by limitation.
3. Addition of 10% yield on interest-free security deposit towards rental income.

Detailed Analysis:

1. Validity of Reopening of Assessment under Section 147:

The assessee contested the reopening of the assessment under section 147 of the Income-tax Act, arguing that the necessary conditions for such reopening were not satisfied. The original assessment was completed on 31-3-1983, and the reopening was based on an order of the Tribunal dated 13-7-1987, which determined a higher Annual Letting Value (ALV) for the property rented to M/s Bata India. The assessee argued that they had disclosed all primary facts necessary for the assessment in their return filed on 26-10-1981, including the rent received from M/s Bata India. The Tribunal noted that the Assessing Officer (AO) did not allege any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Tribunal held that the AO's reopening of the assessment was not justified as the assessee had fully and truly disclosed all material facts necessary for the assessment.

2. Whether the Reopening of Assessment was Barred by Limitation:

The assessee argued that the reopening of the assessment was barred by limitation as it was initiated after the expiry of four years from the end of the relevant assessment year. The Tribunal agreed with this contention, noting that the proviso to section 147 prohibits the AO from taking action after the expiry of four years unless there has been a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Tribunal observed that the AO did not establish any such failure on the part of the assessee. Therefore, the reopening of the assessment was barred by limitation.

3. Addition of 10% Yield on Interest-Free Security Deposit Towards Rental Income:

The AO had added 10% yield on the interest-free security deposit received from M/s Bata India to the rental income of the property. The assessee contested this addition, arguing that it was unjustified. The Tribunal, having quashed the reassessment proceedings on the grounds of invalid reopening and limitation, did not find it necessary to address this issue in detail.

Separate Judgments Delivered:

Per Vimal Gandhi, J.M.:

The judgment emphasized the importance of finality in legal proceedings and the necessity of satisfying the conditions laid down in the proviso to section 147 for reopening an assessment. The judgment highlighted that the proviso requires the AO to establish that income escaped assessment due to the failure of the assessee to disclose fully and truly all material facts. The judgment concluded that the AO did not make any attempt to bring the case within the proviso's conditions, rendering the notice under section 148 invalid and without jurisdiction.

Conclusion:

The appeal was allowed, and the reassessment proceedings initiated by the AO were quashed. The Tribunal held that the reopening of the assessment was invalid due to non-fulfillment of the conditions under section 147 and was also barred by limitation.
1995 (8) TMI 92

Issues Involved:
1. Deletion of penalty under Section 271(1)(c) of the Income Tax Act, 1961.
2. The genuineness of cash credits.
3. The assessee's application under Section 273A.
4. The assessee's cross-objection.

Issue-wise Detailed Analysis:

1. Deletion of Penalty under Section 271(1)(c) of the Income Tax Act, 1961:
The Revenue's appeal challenged the deletion of a penalty amounting to Rs. 5,77,930 levied under Section 271(1)(c). The Assessing Officer (AO) had discovered 47 cash credits during the examination of the assessee's account books, out of which 23 creditors initially denied advancing any money to the assessee firm. However, upon re-examination, these creditors claimed their initial statements were made out of fear. The AO accepted 10 cash credits as genuine based on confirmatory letters but deemed 37 cash credits unexplained, leading to an addition of Rs. 8,82,000. Penalty proceedings were initiated, and the AO imposed the penalty after obtaining necessary approval. The CIT(A) canceled the penalty, which was contested by the Revenue. The Tribunal upheld the CIT(A)'s decision, noting that the explanation provided by the assessee was plausible and not disproved by the AO. The Tribunal emphasized that suspicion, however strong, cannot replace evidence, and the surrender of Rs. 9 lacs by the assessee to avoid litigation did not justify the imposition of the penalty.

2. The Genuineness of Cash Credits:
The AO found peculiar features in the cash credits, such as all credits being in cash, no interest paid, and creditors being agriculturists. Despite these suspicions, the AO accepted 10 cash credits based on confirmatory letters. The assessee had filed confirmation letters for all 47 credits and produced 20 creditors for cross-examination, who confirmed advancing the loans. The Tribunal noted that the AO himself accepted some credits as genuine and that the remaining credits were not disproved. The Tribunal concluded that the explanation provided by the assessee was bona fide, and there was no adverse evidence to prove the cash credits were bogus.

3. The Assessee's Application under Section 273A:
The assessee had filed an application under Section 273A, surrendering Rs. 9 lacs to settle the matter and avoid litigation. The CIT dismissed this petition, but the Tribunal found the assessee's explanation for the surrender plausible. The Tribunal noted that the surrender was made to buy peace of mind amidst partner disputes and impending assessment deadlines. The Tribunal emphasized that the surrender should not be used as a basis for imposing a penalty without adverse evidence.

4. The Assessee's Cross-Objection:
The assessee's cross-objection was dismissed as it was filed late by 5 days and lacked an explanation for the delay. Additionally, the cross-objection was deemed formal and superfluous since it supported the impugned order, which the Tribunal had already upheld.

Conclusion:
The Tribunal dismissed both the Revenue's appeal and the assessee's cross-objection. The Tribunal upheld the CIT(A)'s decision to cancel the penalty under Section 271(1)(c), finding the assessee's explanation plausible and noting the absence of adverse evidence against the assessee. The Tribunal emphasized that suspicion cannot replace evidence and that the surrender of income to avoid litigation does not justify the imposition of a penalty.
1995 (8) TMI 91

Issues:
Confirmation of addition on account of difference in stocks hypothecated with the bank and those found in the books of account for the assessment year 1988-89.

Analysis:
The appeal challenged the addition of Rs. 2,72,518 due to differences in stocks hypothecated with the bank and those in the books. The firm, engaged in manufacturing cycle parts, declared a gross profit rate of 8.16% on total sales of Rs. 37,46,227. Discrepancies in stock were noted by the Assessing Officer on various dates, leading to the addition under section 69 of the IT Act, which was upheld by the first appellate authority.

The counsel for the assessee argued that the goods were hypothecated, not pledged, and physically remained with the assessee. The bank's certification stated that physical verification was impractical due to collateral security. The assessee's counsel relied on various judgments emphasizing that no addition was warranted if the books of account were not rejected.

The Departmental Representative contended that discrepancies between stocks declared to the bank and those in the books justified the addition. Citing legal precedents, it was argued that the burden was on the assessee to prove the correctness of the statements given to the bank.

The Tribunal noted the distinction between pledging and hypothecation, highlighting that in the latter, goods remain with the borrower. Physical verification of hypothecated goods was impractical, especially for a business dealing with various cycle parts. The Tribunal found no discrepancy in the books of account, and the closing stock figures matched. Relying on relevant case laws, the Tribunal concluded that the addition was unwarranted and deleted the amount.

In conclusion, the Tribunal held that the addition of Rs. 2,72,518 was unjustified and deleted it, allowing the appeal.
1995 (8) TMI 90

Issues Involved:
1. Validity of Partition vs. Family Arrangement
2. Division of Immovable Property by Metes and Bounds
3. Registration of Partition Deed
4. Relevance of Subsequent Assessments

Issue-wise Detailed Analysis:

1. Validity of Partition vs. Family Arrangement:
The primary issue in the appeal was whether the arrangement in question was a valid partition under Hindu Law or merely a family arrangement. The Revenue argued that the arrangement was a partition and not a family arrangement, pointing out multiple references to the term "partition" in the deed. The Assessing Officer had rejected the claim of total partition on the grounds that the family had no other male member except the karta, and under Hindu Law, female members are not entitled to a share in a partition. The CIT(A) had accepted the claim of partition, considering it a bona fide family arrangement to settle disputes. However, the Tribunal referenced the Full Bench decision of the Punjab and Haryana High Court in Sat Pal Bansal v. CIT, which held that a sole surviving coparcener cannot effect a partition of HUF property between himself and female members. Consequently, the Tribunal concluded that the arrangement did not qualify as a partition under section 171 of the Income-tax Act.

2. Division of Immovable Property by Metes and Bounds:
The Revenue contended that the immovable property had not been divided by metes and bounds, which is a requirement under section 171 of the Income-tax Act for a valid partition. The Tribunal noted that the property in question could not be physically divided due to legal restrictions under the Chandigarh (Sale of Sites and Buildings) Rules, 1960, which prohibit fragmentation of any site or building. The Tribunal accepted that the division of income from the property among the members was the only feasible method of division under the circumstances. The Tribunal found this method acceptable, referencing the Allahabad High Court decision in CIT v. Onkar Saran & Bros., which validated partition through division of income when physical division was not possible.

3. Registration of Partition Deed:
The Revenue argued that the partition deed was not registered and thus could not be relied upon as evidence. The Tribunal examined the memorandum of "family settlement" and found no indication that a prior oral arrangement existed before the drawing of the memorandum. The Tribunal noted that the memorandum, which effectively acted as a partition deed, required registration under the Transfer of Property Act and the Indian Registration Act. The Tribunal acknowledged that the partition deed was later registered on 16-7-1987 and stated that if this registration were verified, it would relate back to the date of the memorandum (31-3-1984). The matter was remanded to the Assessing Officer to verify the registration.

4. Relevance of Subsequent Assessments:
The assessee argued that the appeal was academic since the individual members of the HUF had been assessed separately in subsequent years. The Tribunal dismissed this argument, stating that the doctrine of res judicata does not apply to income-tax proceedings. The Tribunal emphasized that the appeal involved an important question of law regarding the recognition of partition under section 171 and must be decided on its merits, irrespective of subsequent assessments.

Conclusion:
The Tribunal concluded that the arrangement did not qualify as a valid partition under section 171 of the Income-tax Act, reversing the CIT(A)'s order and restoring the Assessing Officer's decision. The Tribunal remanded the matter to the Assessing Officer to verify the registration of the partition deed. The appeal by the Revenue was allowed.
1995 (8) TMI 89

Issues Involved:
1. Applicability of Section 44AC of the Income-tax Act.
2. Validity of additions made by the Assessing Officer (AO).

Detailed Analysis:

1. Applicability of Section 44AC of the Income-tax Act

The primary issue in both appeals was the applicability of Section 44AC of the Income-tax Act. The assessee's counsel argued that the provisions of Section 44AC should not apply to the sales made under the L-14 license, as these were subsequent sales from the L-13 licensee.

The counsel cited several judicial precedents to support this argument, including:
- A. Sanyasi Rao v. Government of Andhra Pradesh [1989] 178 ITR 31: This case upheld the constitutionality of Sections 44AC and 206C, emphasizing that these sections were anti-evasion measures and did not bar a regular assessment of business income.
- Sat Pal & Co. v. Excise and Taxation Commissioner [1990] 185 ITR 375: This case suggested reading down Section 44AC as an adjunct to Sections 28 to 43C.
- Gian Chand Ashok Kumar & Co. v. Union of India [1991] 187 ITR 188 (HP): This case held that L-13 licensees came under the proviso to Section 44AC(1)(a), making the provisions of Section 206C and other parts of Section 44AC(1) inapplicable to them.
- K. K. Mittal & Co. v. Union of India [1993] 203 ITR 201: This case concluded that income tax could not be deducted from sales made to L-13 licensees by distilleries under Section 206C.

The Tribunal noted that the AO and CIT(A) did not apply the 40% profit rate under Section 44AC to the L-13 licensee sales but applied it to the L-14 licensee sales. The Tribunal found that the L-14 licensee did not make direct purchases from the distillery but received stock from the L-13 licensee, making it a subsequent sale.

The Tribunal agreed with the assessee's counsel that the 40% profit rate specified in Section 44AC should not apply to L-14 licensee sales, as per the exception created in sub-section (2) of Section 44AC. The Tribunal also referred to the CBDT Circular No. 660 dated 15-9-1993, which clarified that Section 206C provisions apply only at the point of the first sale.

2. Validity of Additions Made by the Assessing Officer (AO)

The AO had made several additions due to discrepancies in the assessee's records, including:
- Rs. 2 lakhs for suppression of sales under L-2 license and Rs. 3 lakhs under L-14 license for M/s. Sarkaghat Wine Traders.
- Rs. 1,10,000 for sales under L-2 license and Rs. 1,90,000 for sales under L-14 license for the second firm.

The CIT(A) modified these additions, applying a 40% profit rate under Section 44AC, resulting in higher additions for L-14 licensee sales.

The assessee's counsel did not contest the additions made by the AO during the hearing, focusing solely on the applicability of Section 44AC. The Tribunal thus did not delve into the merits of the individual additions but concluded that the application of the 40% profit rate under Section 44AC was inappropriate.

Conclusion:
The Tribunal held that the 40% profit rate under Section 44AC should not be applied to the sales made under the L-14 license, as these were subsequent sales from the L-13 licensee. The orders of the CIT(A) were quashed, and the additions made by the AO were restored.
1995 (8) TMI 88

Issues:
Late filing of appeals by the department, valuation of property for wealth tax assessments, legality of reference to valuation officer after completion of original assessments, validity of reassessment proceedings based on valuation report.

Analysis:
1. Late Filing of Appeals: The department filed five appeals late by 12 days. The Tribunal, after perusing the condonation petition, found a reasonable cause for the delay and condoned it, admitting the appeals.

2. Valuation of Property: The case involved the assessment of an individual who, along with others, purchased a plot of land and constructed a residential house. The Assessing Officer initiated reassessment proceedings based on valuation reports, leading to disputes regarding the legality of the valuation process.

3. Legality of Reference to Valuation Officer: The assessee contended that the assessing officer acted without jurisdiction by referring the matter to the valuation officer after completing the original assessments. The Dy. CWT(A) held that the reassessment based on the valuation report was invalid as it constituted a change of opinion without any new material.

4. Validity of Reassessment Proceedings: The revenue argued that the valuation report provided new information to reopen assessments under section 17 of the Act. However, the Tribunal held that once assessments are complete, the assessing officer cannot refer the matter to the valuation officer, rendering the valuation report and reassessment proceedings invalid.

5. Judgment: The Tribunal dismissed all appeals, upholding the original assessments for the years in question. It ruled that the report of the valuation officer was non est in law, and the reassessments lacked jurisdiction as all material facts were disclosed during the original assessments, making any subsequent reassessment a mere change of opinion without legal basis. The Tribunal emphasized that the department cannot benefit from referring the matter to the valuation officer after completion of assessments, maintaining the integrity of the original assessments.
1995 (8) TMI 87

Issues:
- Interpretation of section 10(22A) of the Income-tax Act, 1961 regarding tax relief for charitable institutions.
- Determining whether the dominant object of a trust is philanthropic or profit-making.
- Assessing the eligibility of a charitable trust, engaged in providing medical relief through Ayurveda, for the benefit under section 10(22A) of the Act.

Analysis:

The judgment by the Appellate Tribunal ITAT BOMBAY-E involved two appeals by a charitable trust against the order of the Commissioner of Income-tax (Appeals)-XIII, Bombay, for the assessment years 1984-85 and 1985-86. The trust was registered under the Bombay Public Trust Act, 1980, and section 12A of the Income-tax Act, 1961. The trust's main activity involved providing medical relief through Ayurveda. The trust had established five dispensaries and received medicines from a recognized institution at a discount. The trust claimed benefits under section 10(22A) of the Act, which was denied by the Assessing Officer on grounds of profit-making intentions. The CIT (Appeals) upheld this decision, leading to the appeal before the Tribunal.

The main contention was whether the trust's activities qualified as philanthropic under section 10(22A) of the Act. The trust argued that its primary objective was providing medical relief, and any surplus was used for charitable purposes. The trust's counsel cited relevant case laws to support their position. The Departmental Representative contended that the trust's service charges indicated profit-making motives, and the appointment of doctors was to promote medicine sales. The Assessing Officer and CIT (Appeals) had rejected the trust's claim based on these grounds.

The Tribunal analyzed the provisions of section 10(22A) and emphasized that tax relief is granted to institutions existing solely for philanthropic purposes, not for profit. The Tribunal discussed the concept of philanthropy and profit-making activities, highlighting the need for unselfish motives and public benefit. It considered whether accepting moderate consideration from beneficiaries affected the trust's philanthropic status, citing relevant legal precedents.

The Tribunal concluded that the trust's activities aligned with philanthropic purposes, as surplus funds were utilized for charitable objectives. It noted the trust's consistent operations and utilization of surplus for philanthropy. The Tribunal found no valid reason to deny the trust the benefit under section 10(22A) and directed the Assessing Officer to accept the trust's claim. Consequently, the appeals of the trust were allowed, and further deliberation on alternate contentions was deemed unnecessary.

In summary, the judgment clarified the conditions for tax relief under section 10(22A) and emphasized the importance of philanthropic motives in determining eligibility for such benefits. The trust's consistent charitable operations and utilization of surplus for philanthropic purposes were crucial factors in the Tribunal's decision to grant the trust the benefit under section 10(22A) of the Act.