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2017 (1) TMI 1146 - AT - Income TaxReopening of the assessment - Held that:- We find that the reasons are contrary to the records. The assessee has, during the course of original assessment furnished all its accounts, Balance Sheets and the Revenue account before the AO. Therefore, there is no material suggesting that the assessee has not disclosed the material facts fully and truly for his assessment. Therefore, respectfully following the judgment of the Hon’ble Bombay High Court rendered in the case of Dynacraft Air Controls vs. Sneha Joshi & Others, (2013 (6) TMI 312 - BOMBAY HIGH COURT ), we hereby quash the assessment being invalid. This ground of the assessee is allowed. Benefit of section 11 denied - Held that:- We find that the Coordinate Bench has dealt with the identical issue elaborately in the case of Hoshiarpur Improvement Trust & Others vs. ITO [2015 (9) TMI 902 - ITAT AMRITSAR ] as held that as long as broader public cause is served, whether by the State funding or by efficient regulation of the affairs, it is an object of general public utility. Authorities below were not justified in declining the benefit of section 11 read with section 2(15) to the assessee, and in holding that the assessee trust was not covered by advancement of any object of general public utility. The Coordinate Bench has held that even if the activities in the nature of trade, commerce or business etc. are undertaken in the course of actual carrying out of advancement of any object of general public utility, till the end of the previous year relevant to the assessment year 2016-17, the activities will continue to be covered by the scope of Section 2(15). Addition on the basis of conjectures and surmises without any basis and the profit is estimated @ 30% on sale price which as per the AO was not accounted for in the P&L account - Held that:- Addition has been made at 30% without any basis with the presumption that the profit of 30% should have been earned on auction of commercial properties by the Board. This finding of fact is not controverted by the revenue by placing any contrary material on record. Therefore, we do not see any reason to interfere in the order of ld. CIT (A), which is hereby confirmed. Disallowance of expenses on Haj Yatris - Held that:- We find that the ld. CIT (A) has accepted the contention of the assessee on the ground that it will not make any difference even if such addition Application of income by the Board during the year of ₹ 232,59,28,849/- as specified in Form 10B Audit Report is much more than the total income of the appellant shown at ₹ 98,90,80,448/- in the statement of total income filed with the return. This finding of fact is not controverted by the revenue. Therefore, we do not see any reason to interfere in the order of ld. CIT (A), which is hereby confirmed. Reopening of assessment - Held that:- The basis of reopening of the assessment was that the proviso 1 & 2 to section 2(15) of the Act were held to be applicable to the facts of the case. As per section 147 of the Act, the assessment can be reopened if the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Therefore, the reason of the AO was based upon his belief that provisions of section 2(15) were applicable on the facts of the case. Therefore, in our considered view, the AO was justified in reopening the assessment. This ground of the assessee is dismissed. Disallowance on account of Contingency and Equalization Reserve - Held that:- The appellant has been held as a charitable organization and its income to the extent of application as mentioned in section 11 is exempt from taxation u/s 11, therefore there is no justification for making the disallowance specially when the Reserve has been informed created from the sale proceeds of houses and not appropriated from profit shown in the P&L account called Revenue account as presumed by the AO
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