TMI Blog2011 (10) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999. The revenue being aggrieved by two sets of common judgments passed by the Income Tax Appellate Tribunal (hereinafter referred to in short as the Tribunal) dated 16.09.2003 and 29.02.2008 has preferred these appeals in this court under section 260A of the Income Tax Act, 1961 (in short, the IT Act). The judgment dated 16.09.2003 pertains to assessment years 1990-1991, 1991-1992, 1995-1996 and 1996-1997 which are subject matter of ITA Nos.226/2005, 230/2005, 228/2005 and 229/2005; while judgment dated 29.02.2008 relates to assessment years 1994-1995, 1997-1998, 1998-1999 pertaining to ITA Nos.1175/2008, 1288/2008 and 1177/2008. 2. Therefore, in all by virtue of the said impugned judgments, the Tribunal has disposed of seven (7) appeals. The parties before the Tribunal in so far as the judgment dated 16.09.2003 was concerned were ad idem that it would suffice if the facts and circumstances which obtained in assessment year 1990- 1991 were discussed for the purposes of adjudication of assessment years 1991-1992, 1995-1996 and 1996-1997. While deciding appeals for assessment years 1994-1995, 1997-1998 and 1998-1999 by way of its second judgment dated 29.02.2008, the Tribunal sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the institutional members were neither received towards creation of a 'corpus' or in the form of donation. The sums received from the institutional members were utilized fully for constructing the super-structure on the demised land. 5. Given the fact that the aforementioned model was in place, on 05.10.1991, the assessee filed a return of income declaring its income as nil. The income in the first instance was processed under section 143(1)(a) of the IT Act. It appears, however, that subsequently, a notice was issued under section 148 of the IT Act, whereby the assessee was called upon to give explanation with regard to the charitable activities undertaken by it. The assessee was also called upon to explain the nature of the contributions made by the institutional members qua the construction of the super-structure on the demised land, and whether these institutional members were covered under section 13(1) read with section 13(3) of the IT Act. 6. After a detailed examination of the material produced by the assessee, an assessment order dated 20.03.1998 was passed sustaining the contention of the assessee that it ought to be given the benefit of the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Intimation under section 143(1)(a) dated 28.01.1994. Tribunal's order dated 16.09.2003 passed in favour of the assessee. Revenue in appeal before this court. 1992-1993 Intimation under section 143(1)(a) dated 30.03.1995. Tribunal's order dated 19.11.2001 passed in favour of the assessee. No appeal preferred by the revenue. 1993-1994 Intimation under section 143(1)(a) dated 27.03.1996. Tribunal's order dated 11.02.2002 passed in favour of the assessee. No appeal preferred by the revenue. 1994-1995 Intimation under section 143(1)(a) dated 26.03.1997. Tribunal's order dated 29.02.2008 passed in favour of the assessee. Revenue in appeal before this court. 1995-1996 Intimation under section 143(1)(a) dated 30.03.1998. Tribunal's order dated 16.09.2003 passed in favour of the assessee. Revenue in appeal before this court. 1996-1997 Intimation under section 143(1)(a) dated 27.03.1998. Tribunal's order dated 16.09.2003 passed in favour of the assessee. Revenue in appeal before this court 1997-1998 Intimation under section 143(1)(a) dated 27.03.2000. Tribunal's order dated 29.02.2008 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal dated 16.09.2003. In so far as the period post 1997/1998 was concerned, the aforementioned details (which have been tabulated by us above) would show that except for assessment year 1998-1999, in the period commencing from assessment year 1999-2000 to 2006-2007 even though favourable orders have been passed by the Assessing Officer granting the benefit of exemption under section 11 of the IT Act to the assessee, the revenue has not raised a cavil vis- -vis the said orders. Therefore, based on the principle of consistency even for periods other than those which are covered by the impugned judgment of the Tribunal dated 16.09.2003, the assessee ought to be allowed the benefit of exemption under section 11 of the IT Act. 14. We have heard the learned counsels for the parties. 15. On a perusal of the judgment of the Tribunal and the authorities below, it is quite evident that the following undisputed facts emerged in this case : 15.1 As noticed by us above, during the period in issue the demised land had been allotted to the assessee vide an allotment letter dated 22.05.1988, by the Government of India, Ministry of Urban Development. At the relevant point in time, lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact :- (i) allotment of space to the institutional members was subject to the approval of the Government of India; (ii) the assessee was authorised to recover the proportionate cost of land, building and the undivided share in the common areas and facilities to be given to the institutional members. (iii) since the allotment of space was subject to the approval of the Government of India, Ministry of Urban Development, the price at which such space would be allotted would also axiomatically require its approval. In any event, on an appreciation of the evidence placed on record, which included the communication exchanged between the assessee and the allottees/ institutional members, it was evident that the construction and the development of the superstructure was based on a "self-financing model", whereby they would have to pay a proportionate amount of the actual total cost which would include the cost of the land and common facilities. The assessee was at best "a custodian" of funds of the allottees / institutional members. The assessee was in one sense a supervisor of the construction activities carried out on the demised land; (iv) there was no material put on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrongly categorised the institutional members who had been allotted space in the superstructure as substantial contributors in terms of section 13(3) of the IT Act. The allotment of space was, as noticed by the Tribunal, subject to the approval of Government of India and was based on a self-financing model, therefore, there could be no question of the assessee allotting space to the institutional members for a sum which was less than cost price both, with respect to the demised land as well as the common facilities. The total cost in terms of the model evolved by the assessee had to be shared amongst various institutional members on a pro-rata basis. Therefore, as rightly held by the Tribunal, there was no violation of the provisions of section 13(1)(c) of the IT Act as the interest earned on the funds received from institutional members would only reduce the cost which in turn would get proportionately divided amongst the institutional members. 20. The Tribunal has, according to us, correctly appreciated the position prior to 1997 and 1998, in as much as, the activities of the assessee which swayed the CIT in coming to the conclusion that the assessee had deviated from the objec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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