TMI Blog2016 (6) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, we also find that the assessee has been claiming the exemptions benefit under section 11 of the Act for the last several years but the same was not denied therefore in our view principle of consistency should be applied in the instant case. - Decided in favour of assessee. - ITA No.914/Kol/2013 - - - Dated:- 27-4-2016 - Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant Shri Rajat Kr. Kureel, JCIT-SR-DR For The Respndent : Shri S.M.Surana, Advocate ORDER PER Waseem Ahmed, Accountant Member:- This appeal by the Revenue is against the order of Commissioner of Income Tax (Appeals)-Jalpaiguri dated 20.02.2013. Assessment was framed by ITO(Exemp.)-II Kolkata u/s 143(3)/13(1)(c)/13(1)(d) r.w.s.13(2)(b) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 20.12.2010 for assessment year 2008-09. Grounds raised by Revenue are reproduced below:- 1. That on the facts and the circumstances of the case and also in the question of law, the Ld. CIT(A)/Jalpaiguri erred in holding that though no resjudicata or estoppels applies in Income Tax proceedings, consisten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the withdrawal of the exemption u/s 11 of the Act. In compliance thereto the assessee submitted that 1) The purpose to form a private Limited company by way to joint venture is to help the artisans and craftsmen by getting them good remuneration for their work of art and craft in the national and international market. 2) By way of this joint venture it was possible to have the perfect knowledge about the requirement and information regarding the design of the product and reasonable pricing of the product in foreign market. 3) The directors of the company Shri P.S. Chawla and Smt. Roop Mehta are the representative of the society and they have no substantial interest in the company so there is no violation of section 13(2)(h) of the Act. 2.1 However the AO disregarded the plea of the assessee by holding that as per the provisions of section 13(3) of the Act the company is an interested person to the assessee Society. As per section 13(2)(h) of the Act the exemption benefit u/s 11 of the Act will not be available to the society if any fund is invested for any period during the previous year in any concern in which any person referred to in sub section 13(3) has a sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the trust and separate books of accounts are maintained in respect of such business as per section 11(4A) of the Act. The Ld. AR further submitted that in the instant case the provision of section 13(1)(d)(iii) shall not be applied as per the proviso attached to this section which allows such investment if made out of profit and gains. 5. We have heard rival contentions and perused the materials available on record. Before us both the parties relied on the orders of Authorities Below as favourable to them. From the facts of the case, we find that AO disallowed the exemption benefit available to the assessee in Section 11 of the Act for the reason that the investment made by the assessee in the shares of the Private Limited Company is in contravention of the provisions of that Section 11(5) of the Act. However the Ld CIT(A) granted the relief to the assessee on the ground that the investment in share capital was made in the assessment year 2005-06 and the exemption benefit has not been denied in the earlier assessment years also and subsequent assessment year 2009-10 so there is consistency in claiming the exemptions benefit u/s 11 of the Act. Now the question before us arises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sset, not being an investment or deposit in any of the forms or modes specified in sub-section (5) of section 11, where such asset is not held by the trust or institution, otherwise than in any of the forms or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the previous year in which such asset is acquired or the 31st day of march, [1993], whichever is later;] (iii) Any funds representing the profits and gains of business, being profits and gains of any previous year relevant to the assessment year commencing on the 1st day of April, 1984 or any subsequent assessment year. Explanation.- Where the trust or institution has any other income in addition to profits and gains of business, the provisions of clause (iii) of this proviso shall not apply unless the trust or institution maintains separate books of account in respect of such business.] 5.1 From the proviso we find that investment in shares in a Private Limited Company if made out of the profit of business then the exemption benefit shall not be denied to the assessee. In the instant case the assessee claimed to have made the investment out of the fund representing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. One these reasoning, in the absence of any material change justifying the Revenue to take a different view of the matter-and, if there was no change, it was in support of the assessee-we do not think the question should have been reopened and contrary to what had been decided by the CIT in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under ss. 11 and 12 of the IT Act of 1961. After analyzing the provisions of the Act and different decisions of the Hon'ble courts, we find that the investment made by the assessee in the aforesaid Private Limited Company is out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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