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2015 (8) TMI 1145 - ITAT COCHIN

2015 (8) TMI 1145 - ITAT COCHIN - [2015] 39 ITR (Trib) 349 (ITAT [Coc]) - Unexplained investment/deposit found in the bank deposits - addition under section 69 - CIT(A) delted the addition - Held that:- The bank account standing in the name of the assessee does not belong to the assessee in his individual capacity and he was holding the account in his fiduciary capacity as metropolitan/bishop of the church. Therefore, all the monies credited in the bank account, which stands in the name of the a .....

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im and he does not own anything except his patrimony. Therefore, the property/ money which stands in the name of the assessee has to be considered only in the hands of the church, if at all an addition has to be made. There cannot be any addition in the hands of the present assessee. This Tribunal is of the considered opinion that the Commissioner of Income-tax (Appeals) has rightly deleted the addition. - Decided in favour of assessee. - I.T.A No. 278 to 281/Coch/2014 - Dated:- 6-3-2015 -

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n, all the four appeals were heard together and are disposed of by this common order. 2. The only issue arises for consideration in all these appeals is addition made by the Assessing Officer under section 69 of the Income-tax Act and in respect of investment/deposit found in the bank deposits. 3. Shri M. Anil Kumar, the learned Departmental representative, submitted that the Assessing Officer found a deposit of ₹ 4,40,352 in the bank account maintained in the name of the assessee for the .....

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ned Departmental representative, the original name of the assessee was Joseph Mar Iranius and after he became metropolitan, the name was changed to Most. Rev. Dr. Joseph Marthoma. The Department found a bank account in Federal Bank, Kozhencherry Branch. The account was opened in the name of the assessee during the financial year 2003-04. According to the learned Departmental representative, the assessee also purchased land in his name. The assessee claimed before the Assessing Officer that the b .....

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h stands in the name of the assessee, was not accounted in the books of account of the church or diocese and it was treated as his income, therefore, the Assessing Officer made addition. However, the Commissioner of Income-tax (Appeals) based upon the constitution of the diocese found that the assessee cannot own any property or money except patrimony and all properties/money belonging to the assessee would automatically go to the church or the diocese. Therefore, the money deposited in the bank .....

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ey belonging to the church/diocese was deposited in his bank account. Therefore, the learned Departmental representative submitted that the matter may be remanded back to the file of the Assessing Officer so that the matter can be verified whether the money deposited in the bank account belongs to the assessee or the church/diocese. 4. On the contrary, Shri K. I. John, the learned representative for the assessee, submitted that the addition made by the Assessing Officer for the assessment year 2 .....

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by one Prof. Mathew C Varghese. The learned representative submitted that the said Prof. Mathew C Varghese made a complaint against the chartered accountant (the present representative, who is appearing before this Tribunal) alleging that the property in the individual name of the bishop (assessee) was shown as asset of the church in the balance-sheet. The learned representative submitted that the complaint made to Institute of Chartered Accountants was examined by the disciplinary committee co .....

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hat there is no guilt of professional conduct in showing the land as asset in the balance-sheet of the church. According to the learned representative, this shows that even though the land stands in the name of the assessee being the bishop/metropolitan of the diocese, it does not belong to him. He is holding the same in fiduciary capacity as head of the religious institution. Referring to the Marthoma Syrian Church of Malabar Constitution, the learned representative clarified that a person beco .....

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hereafter accrue to the Church. The further clause in the oath of affirmation is that of movable and immovable properties, assets, bank deposits and investments, whether presently held by the metropolitan/bishop or coming to be held by him hereafter, other than any patrimony and so also any part interests becoming vested in him, in any assets or investments, other than patrimony, after induction into this position, shall belong to Marthoma Syrian Church. According to the learned representative, .....

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fficer that the money belongs to the assessee does not merit consideration. The learned representative further submitted that the deposit made in the bank accounts was received from the member of the church for construction of building in the property purchased in the year 2002. The bank account was opened in the name of the assessee. Referring Page No : 0353 to copy of the bank statement, copy of which is filed by the assessee, the learned representative submitted that the account itself shows .....

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e church for the hermitage for old age people of the church, who lost their spouse. The construction account was given to the church and it was incorporated in the church account which was approved by the supreme body of the church, viz., mandala. Therefore, according to the learned representative, when the money was credited in the bank account its character is a receipt by the church. Therefore, it goes to the church by overriding title as found by the apex court in Radhasoami Satsang v. CIT [ .....

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. The learned representative submitted that the Tribunal apparently followed the judgment of the apex court in CIT v. Bijli Cotton Mills (P.) Ltd. [1979] 116 ITR 60 (SC). 6. Referring to the bank account, the learned representative submitted that the credit entry on October 1, 2003 is ₹ 2,93,343. It is a transfer from the diocese of Adoor to the church. In view of the above, according to the learned representative, the Assessing Officer is not justified in reopening the assessment under se .....

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that arises for consideration is whether deposit made in the bank account which stands in the name of the assessee is the income of the assessee or is it an income of the church. The assessee claims that the moment he became the metropolitan/bishop of the diocese, he cannot own any property, money etc., other than his patrimony. 9. We have carefully gone through the constitution of Marthoma Syrian Church of Malabar. In the oath of affirmation said to be made by the assessee on fidelity, the foll .....

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s, bank deposits held by him on the date of such affirmation and which may go into his possession at a later stage would belong to Marthoma Syrian Church and not to him. We are conscious that the constitution of Marthoma Syrian Church of Malabar is not a statutory provision. At the very same time, when the assessee willingly executed oath of affirmation in favour of the church/religious institution it is binding on him as a contract under the Indian Contract Act. The assessee cannot go beyond hi .....

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ng except his patrimony. Under the Indian Contract Act, this oath of affirmation can be enforced against the assessee by the church. Therefore, this Tribunal is of the considered opinion that all landed properties, bank accounts, assets possessed by the assessee in his individual capacity would be the property of the church. As rightly submitted by the learned representative for the assessee, the money received by the assessee as metropolitan/bishop would go to the church by way of overriding ti .....

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as purchased from the funds of the church in the individual name of the bishop. The building and land was duly approved by the headquarter in the year 2006-07. Therefore, the committee found that there was no professional misconduct on the part of the chartered accountant for showing the property in the balance-sheet of the church. This finding of the disciplinary committee would go to show that the church is the owner of the property as disclosed in the balance-sheet even though the lands stand .....

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