TMI Blog2015 (11) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... come has to be held as application of income. Therefore, the CIT(Appeals) has rightly allowed the claim of the assessee. The fact that the meditation hall was handed over to the assessee-trusts is not in dispute. The property tax assessment by local body also stands in the name of two assessee-trusts. Therefore, this Tribunal is of the considered opinion that when the two companies constructed the meditation hall and handed over the same to the assessee-trusts and the property tax assessment stands in the name of assessee-trusts, the assessees are the owners of the property under the provisions of Income-tax Act. Under the Indian law, a land can belong to one person and the building can be owned by other person. In the case before us, the land in which the meditation hall was constructed belongs to a different person, but the building was constructed by the two companies on the funds advanced by the assessee-trusts. After construction, the building was handed over to the assessee-trusts. Therefore, there was transfer of property within the meaning of Section 2(47) of the Act. Under the common law, registration of document is required when the property value exceeds more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration, both the assessees claimed to have received corpus donation. However, the corpus donation claimed to have been received by both the assessees found to have been added to the Capital Fund. The Ld. D.R. further submitted that the assets created out of the accumulated Capital Fund were not reflected in the books of account of both the assessees. The Ld. D.R. further submitted that the assessees have not furnished the complete details of the donors from whom the corpus donation was claimed to have been received. Therefore, the Assessing Officer treated the entire so-called corpus donation said to be received by the assessees as income of the assessees. According to the Ld. D.R., the assessees have also not filed any evidence for application of their fund for charitable purpose. Referring to the assessment orders, the Ld. D.R. submitted that both the assessees transferred their funds to two private companies, namely, M/s Prajit Foundation Pvt. Ltd. and M/s Golden Shelters Pvt. Ltd. According to the Ld. D.R., both the assessees pooled their funds for construction of massive marble structure at Chedulapakkam Village, Varadalapalam Mandal, Chittoor District, Andhra Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land on which the meditation hall was constructed. There was an agreement between Anirjita Properties and M/s Golden Shelters Pvt. Ltd. However, the company claimed in the later stage that there was a lease agreement for a period of 30 years. The Ld. D.R. further pointed out that both the assesseetrusts own vast stretch of land at Kunnawalkam Village in Andhra Pradesh. Therefore, it is not known why the massive construction was put up in a land belonging to other person. According to the Ld. D.R., since the construction was made in the land belonging to Anirjita Properties, and building stands in the name of two companies, which are owned by close relatives of Shri Vijaykumar, one of the trustees, the Assessing Officer rightly found that there was a violation of Section 13(1)(c) and 13(1)(d) of the Act. Therefore, the assessees are not entitled for exemption under Sections 11 and 12 of the Act. According to the Ld. D.R., the CIT(Appeals) misconstrued himself and allowed the claim of the assessees under Section 11 of the Act. 6. On the contrary, Ms. S. Deepa, the Ld. representative for the assessee, submitted that admittedly, both the trusts are registered as charitable trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... representative submitted that the construction was made by the two companies on the funds advanced by the two assessee-trusts. After completion of construction, the companies admittedly handed over the building to the trusts. The property tax assessment stands in the name of assessee-trusts. Therefore, according to the Ld. representative, the property belongs to the trusts and not to the companies. The moment the construction was completed, the physical possession of the property was handed over to the assessees. Therefore, at any stretch of imagination, the Revenue cannot claim that the property belongs to two companies. The Ld. representative further submitted that the property tax was also assessed in the hands of the two assessee-trusts by the respective local bodies. Hence, there is no justification in claiming that the building belongs to the companies. According to the Ld. representative, in fact, the building belongs to the assessee-trusts, therefore, the expenditure incurred by the assessees for construction of the building has to be treated as infrastructural development expenses. The Ld. representative further submitted that the meditation hall was constructed in further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the trusts. The question arises for consideration is when Shri V.Vijaykumar is no longer a trustee of the assessee-trusts, can the funds be advanced to the companies in which the son of Shri V. Vijaykumar and his daughter-in-law are holding shares would amount to diversion of funds to interested person? This Tribunal is of the considered opinion that the moment Shri V. Vijaykumar relinquished his trusteeship, it cannot be said that Shri V. Vijaykumar s son and daughter-in-law are interested persons in the trusts. Therefore, this Tribunal is of the considered opinion that there is no violation of Section 13(1)(d) of the Act. 11. Now coming to corpus donation, the assessees claim that all the details were furnished before the lower authorities. From the material available on record, it appears that all the details were not furnished. Though certain details were furnished, it is a fact that complete details were not furnished before the lower authorities. Therefore, part of the so-called corpus donation has to be treated as income of the assessee-trusts. However, it is not in dispute that the entire corpus donation and other donations were used for the construction of meditat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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