TMI Blog2013 (8) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 1,41,05,523/- was due to the assessee. Assessee has no case that any interest was received from such parties to which money was lent. There was no security whatsoever given to the assessee. Thus there was an indirect benefit to Shri P. Subramani, Managing Trustee of the assessee- Trust and this fell clearly within the scope of Section 13(1)(c) r.w.s. 13(2)(a) - Such violation did warrant denial of exemption claimed under Section 11, therefore, CIT(Appeals) fell in error in blindly following the order of preceding assessment year and accepting the case of the assessee - appeal filed by the Revenue is allowed. - I.T.A. No. 1668/Mds/2012 - - - Dated:- 13-6-2013 - Shri Abraham P. George And Shri V. Durga Rao,JJ. For the Appellant : Dr. S. Moharana, CIT-DR For the Respondent : Shri V. Subbarayan, DCIT (Retd.) ORDER Per Abraham P. George, Accountant Member :- In this appeal filed by the Revenue, its grievance is that Commissioner of Income Tax (Appeals)-XII, Chennai, vide his order dated 24.5.2012, held the assessee to be entitled for exemption under Section 11 of Income-tax Act, 1961 (in short 'the Act') and gave a finding that there was no violation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation Ltd. were repayments of loans taken from one M/s Apollo Institute of Hotel Management, Catering and Fashion Technology (AIHMC FT). As per the assessee, the latter concern was also a proprietorship concern of Shri P. Subramani and, therefore, the accounts of M/s Apollo Computer Education and M/s Apollo Computer Education Ltd. had to be seen in a consolidated manner along with the account of M/s AIHMC FT. Further, as per the assessee, a sum of Rs. 3,35,33,535/- was due to M/s AIHMC FT on 1.4.2008 and the payments effected to M/s Apollo Computer Education and M/s Apollo Computer Education Ltd., during the relevant previous year, were based on the directions of M/s AIHMC FT, in satisfaction of the debts due to M/s AIHMC FT. Insofar as Apollo Computer Education Ltd. was concerned, Shri P. Subramani was holding substantial interest and was also a Director and hence it had also to be considered while deciding whether there was any violation under Section 13(1) of the Act. Assessee also pointed out that in the preceding assessment year 2008-09, for similar reasons, exemption under Sections 11 and 12 was denied to it but on appeal, the CIT(Appeals) had allowed the claim. As per the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee to M/s AIHMC FT during the relevant previous year, a sum of Rs. 1,21,04,162/- was reimbursement of construction expenses and this had to be excluded. Thus, as per CIT(Appeals), the amount due from assessee to M/s AIHMC FT was Rs. 2,82,74,697/-. CIT(Appeals) also accepted the contention of the assessee that out of sum of Rs. 5,28,20,234/- paid by the assessee during the relevant previous year to M/s Apollo Computer Education, Rs. 51 lakhs was for training done by M/s Apollo Computer Education Ltd. for the students in assessee's institution. Thus, in the opinion of the CIT(Appeals), when the three concerns were considered together and payments effected for other purposes were excluded, then what was paid was considerably less than what was due from the assessee. Therefore, he held that there was no reason for invoking Section 13(1) of the Act. He held the assessee to be eligible for exemption under Sections 11 of the Act. 6. Now before us, learned D.R., strongly assailing the order of CIT(Appeals), submitted that in the first place, one of the concerns considered for consolidation was a limited company. According to him, the CIT(Appeals) fell in error in holding that acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the financial year 2008-09 relevant to impugned assessment year. A Memorandum of Understanding was entered by M/s AIHMC FT and M/s Murali Builders for such construction on 1.6.2008 and a copy of MOU was produced before the Assessing Officer also. It would clearly show that a sum of Rs. 1,21,04,162/- was paid by M/s AIHMC FT to M/s Murali Builders, for and on behalf of assessee-Trust, for the work done by M/s Murali Builders to the assessee-Trust. Similarly, according to learned A.R., there was an MOU entered by M/s Apollo Computer Education Ltd. also for training the students of the assessee. A billing of Rs. 51 lakhs for the service rendered by the said concern in the month March, 2009 was paid by the assessee on 30.3.2009. Therefore, as per learned A.R., this sum of Rs. 51 lakhs, out of total payment of Rs. 5,28,20,234/- effected to M/s Apollo Computer Education Ltd., during the relevant previous year, had to be excluded. These aspects were properly appreciated by ld. CIT(Appeals). CIT(Appeals) gave a clear finding that effectively a sum of Rs. 31,76,091/- was due from the assessee to the concerns in which Shri P. Subramani was interested, when all such concerns were consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each of these three concerns, during the previous year relevant to assessment year:- During the Financial Year 2008-09 Name of the concern Opening balance as on 01.04.2008 Credits during FY 2008-09 Debits during FY 2008-09 Closing balance as on 31.03.2009 AIHMC FT 3,35,33,535 Cr 45,000 1,74,08,000 1,61,70,535 Cr Apollo Computer Education 1,00,00,000 Dr 39,85,000 1,00,88,553 1,61,03,553 Dr Apollo Computer Education Ltd. 2,15,32,395 Dr 6,02,57,576 5,28,20,234 1,40,95,053 Dr Total 20,01,140 Cr 6,42,87,576 8,03,16,787 1,40,28,071Dr Other transactions with Apollo Computer Education Ltd. which the A.O. has not noticed 20,63,787 Cr .. .. 77,452 Dr Grand Total 40,64,926 Cr 6,42,87,576 8,03,16,787 1,41,05,523 Dr Similarly, summary of the transactions for immediately preceding previous year is also reproduced hereunder:- During the Financial Year 2007-08 Name of the concern Opening balance as on 01.04.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,74,08,000/- against the account of M/s AIHMC FT. It could have charged at least Rs. 1,21,04,162/- to construction expenses account. The fact is that as on 31.3.2009, the books of the assessee showed a sum of Rs. 1,61,70,535/- as due to M/s AIHMC FT. We cannot exclude from Rs. 1,74,08,000/- paid by the assessee to M/s AIHMC FT during the relevant previous year, the sum of Rs. 1,21,04,162/-. The plea of the assessee that the actual balance due from the assessee to M/s AIHMC FT as on 31.3.2009 was Rs. 2,82,74,697/-, was simply accepted by the CIT(Appeals) without appreciating the real facts. 11. Coming to the payment of Rs. 51 lakhs to M/s Apollo Computer Education Ltd., it was argued by the assessee that the payment was made for the training rendered for its students. Admittedly, here also assessee had not passed any entry of like nature in its books of accounts. It is only claiming that an amount of Rs. 51 lakhs was paid for the services rendered by M/s AIHMC FT in March, 2009. There is nothing on record to show how the sum of Rs. 51 lakhs was arrived at except for the contention of the assessee that average monthly bill for computer training in the succeeding financial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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