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2017 (1) TMI 1146 - ITAT JAIPUR

2017 (1) TMI 1146 - ITAT JAIPUR - TMI - Reopening of the assessment - Held that:- We find that the reasons are contrary to the records. The assessee has, during the course of original assessment furnished all its accounts, Balance Sheets and the Revenue account before the AO. Therefore, there is no material suggesting that the assessee has not disclosed the material facts fully and truly for his assessment. Therefore, respectfully following the judgment of the Hon’ble Bombay High Court rendered .....

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ng or by efficient regulation of the affairs, it is an object of general public utility. Authorities below were not justified in declining the benefit of section 11 read with section 2(15) to the assessee, and in holding that the assessee trust was not covered by advancement of any object of general public utility. The Coordinate Bench has held that even if the activities in the nature of trade, commerce or business etc. are undertaken in the course of actual carrying out of advancement of any o .....

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ction of commercial properties by the Board. This finding of fact is not controverted by the revenue by placing any contrary material on record. Therefore, we do not see any reason to interfere in the order of ld. CIT (A), which is hereby confirmed. - Disallowance of expenses on Haj Yatris - Held that:- We find that the ld. CIT (A) has accepted the contention of the assessee on the ground that it will not make any difference even if such addition Application of income by the Board during the .....

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) of the Act were held to be applicable to the facts of the case. As per section 147 of the Act, the assessment can be reopened if the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Therefore, the reason of the AO was based upon his belief that provisions of section 2(15) were applicable on the facts of the case. Therefore, in our considered view, the AO was justified in reopening the assessment. This ground of the assessee is dismissed .....

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ITA No. 862 to 866/JP/2014, ITA No. 902 to 906/JP/2014 & 21/JP/2013 - Dated:- 20-1-2017 - SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P.C. Parwal (CA) and Shri Prakul Khurana (Advocate) For The Revenue : Smt. Rolly Agarwal (CIT) ORDER PER SHRI KUL BHARAT, JM. This bunch of 11 appeals by the assessee and revenue are directed against the different orders of ld. CIT (Appeals)-II, Jaipur pertaining to assessment years 2005-06, 06-07 & 09-10 to 12-13. Since in a .....

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148 and consequent order passed u/s 147/143(3) is in accordance with the provisions of the Act . 2. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in holding that the contingency and equalization reserve is in the nature of provision made on estimate and not an ascertained liability and accordingly confirming disallowance of ₹ 2,16,00,123/- out of the disallowance of ₹ 5,27,66,150/- made by the AO. 3. The assessee craves right to add, alter or amend any of .....

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of ₹ 3,21,15,960/- thereby, computing the total income of ₹ 9,56,79,740/-. Aggrieved by this order, assessee preferred an appeal before ld. CIT (A), who after considering the submissions partly allowed the appeal. While partly allowing the appeal, the ld. CIT (A) rejected the ground raised against reopening of the assessment and restricted the disallowance of CER to ₹ 2,16,00,123/- and deleted the addition made on account of profit on sale of property through auction. 5. Now t .....

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necessary for assessment. He submitted that all material facts were before the AO in the original proceedings. He further submitted that although subsequently, the income is assessed at NIL as the assessee was declared as local authority under section 10(20) of the Act. But the legality of re-opening of assessment still remains under challenge. 6.2. On the contrary, the ld. D/R has supported the orders of the authorities below and submitted that there is no change of opinion. The AO has not made .....

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risdiction of the AO, undisputedly, the reopening was made after the expiry of 4 years of the original assessment, therefore, in terms of provisions of section 147, the AO was required to demonstrate that assessee has failed to disclose fully and truly all material facts. It is not disputed by the revenue that Balance Sheets and the Revenue account were before the AO during the original assessment as well. Therefore, it cannot be inferred that the assessee has failed to disclose all material fac .....

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ome chargeable to tax has escaped assessment for any assessment year. Under the proviso to section 147, where an assessment has been made under section 143(3), no action shall be taken under that section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, for t .....

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reasons disclosed do not indicate the fulfillment of the jurisdictional requirement, the reopening is invalid. In the present case the reasons as recorded by the AO for reopening the case u/s 148 of the Act reads as under :- Facts of the case are that the assessee filed the return of income for the A.Y. 2005-06 on 29.10.2005 declaring total income at ₹ 1053790/- and the assessment was completed vide order u/ 143(3) dated 22.10.2007 at income of ₹ 40797633/-. The matter is before High .....

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of interest, maintenance and repairs of tools and plants and administrative expenses. These are shown in the debit side of the P&L account with negative sign instead of crediting in P & L account directly. Thus profit is included in sales. When properties are handed over these are shown as sales written off . As a matter of fact a sale price is determined on anticipation basis covering the cost of project. Thus the sale price which is accounted for in the P & L /Works account can be .....

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of property effected/accounted for ₹ 1017157933/- Factors loaded in cost Interest ₹ 89862655/- Maintenance and repairs of tools & plant ₹ 4825430/- Administrative expenses ₹ 98005444/- Gross profit comprised in sales ₹ 192693529/- Net revenue surplus for the year ₹ 1863511/- Claim of Contingency & Equalization Reserve (CER) However, it was found that the assessee has been claiming Contingency & Equalization Reserve (CER) in works account. In this y .....

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e loses on account of sick contracts, if required. Thus this CER is not ascertained liability. It is contingent liability which I not allowable. Thus apparently income to the extent of ₹ 52766150/- has escaped assessment. This escapement was on account of failure of the assessee to disclose the accounts in proper Income from auction of plots- Besides this it is also seen that the assessee does not show profit from auction of plots. It is seen that substantial part of sale is from auction o .....

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ng of sale price in the works account. But in case of auction the profit is more which is not accounted for in P&L. Before auction properties, Reserve price is based on ASP which in normal circumstances would be more than ASP. In case of auction, the property will fetch much more price than the ASP as reserve price is fixed on considering the market value. During assessment proceedings for AY 2009-10 the assessee explained that the difference of reserve price and auction price of plots/shops .....

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s the closing works valuation. As per details filed/available in records the asseee earned sale proceeds from auctioned properties as under - Auction of plots ₹ 84612516/- Auction of shops ₹ 22440687/- Rs.10,70,53,203/- Since complete details are not available it would be reasonable to estimate that the assessee earned 30% on sale price in respect of auctioned property which is not accounted for in the P&L account. Thus there was suppression of income to the extent of R. 3,21,15, .....

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reasons are contrary to the records. The assessee has, during the course of original assessment furnished all its accounts, Balance Sheets and the Revenue account before the AO. Therefore, there is no material suggesting that the assessee has not disclosed the material facts fully and truly for his assessment. Therefore, respectfully following the judgment of the Hon ble Bombay High Court rendered in the case of Dynacraft Air Controls vs. Sneha Joshi & Others, 355 ITR 102 (Bom.), we hereby .....

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. This is revenue s appeal for the same assessment year 2005-06. As we have quashed the assessment in assessee s appeal in ITA No. 862/JP/2014, therefore, we dismiss this appeal of the revenue as the assessee succeeded in the ground of legality of re-opening of the assessment. Moreover, the AO subsequently has assessed the income at Nil, in favour of the assessee. Now we take up appeals for the A.Y. 2006-07 : ITA No. 863/JP/2014 (Assessee s Appeal) : 11. First we take up assessee s appeal in ITA .....

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and not an ascertained liability and accordingly confirming disallowance of ₹ 93,73,063/- out of the disallowance of ₹ 7,48,73,063/-made by the AO. 3. The assessee craves right to add, alter or amend any of the grounds of the appeal. 4. The appropriate cost be awarded to the assessee. 12. Briefly stated the facts of the case are that the assessment under section 147 read with section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was framed vide order dated 2 .....

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ground raised against reopening of the assessment and restricted the disallowance of CER to ₹ 93,73,063/- and deleted the addition made on account of profit on sale of property through auction. 13. Now the assessee as well as revenue are in appeal before us. 14. Ground No. 1 is against reopening of the assessment. 14.1 The ld. Counsel for the assessee reiterated the submissions as made in the written synopsis, which are reproduced as under :- It is submitted that the original assessment i .....

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sment filed the Balance Sheet and the Revenue account (PB 67-69). In course of these proceedings, assessee furnished the works account in which sale value of auction of plots and the contingency charged to work is separately mentioned (PB 65-66). The contingency equalization and reserve fund is also appearing in the Balance Sheet (PB 67) where the opening balance in such fund, addition during the year, utilization from the same and the closing balance of the fund is reflected. The AO after consi .....

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he assessee to disclose fully and truly all material facts. Hence, proceedings u/s 147 initiated by the AO is simply on the basis of change of opinion without taking into consideration, the material on record which shows that income of the assessee is not chargeable to tax at all. Reliance in this connection is also placed on the following cases:- CIT Vs. Eco Media (P) Limited 81 CCH 85 (Mad.)(HC) (2012) CIT Vs. Reliance Energy Ltd. 81 DTR 130 (Bom.) (HC) (2013) Dynacraft Air Controls Vs. Sneha .....

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arudhar Hotels Pvt. Ltd. Vs. DCIT 259 ITR 509 (Raj.) CIT Vs Kelvinator of India Ltd [2002] 256 ITR 1 (Delhi-FB) It is submitted that assessee has filed detailed letter dt. 29.08.2013 objecting the issuance of notice u/s 148 (PB 36-66). However, the AO without disposing of those objections has proceeded to complete the assessment which is against the principle laid by the Supreme Court in case of GKN Driveshafts (India) Ltd. Vs. ITO & Ors. 259 ITR 0019. Further, in the reasons recorded by the .....

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he Act w.e.f. 27.03.08. Both the order of ITAT and CIT was available with the AO before he initiated the proceedings u/s 148. It may also be noted that section 12A (PB 73-74) of the Act has been amended by Finance Act 2014 w.e.f. 01.10.2014 whereby a proviso is inserted to provide that where registration has been granted to the trust or institution u/s 12AA, then the provision of section 11 and 12 shall apply in respect of any income derived from the property held under trust for which assessmen .....

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granted registration w.e.f. 01.04.2008. Hon ble Rajasthan High Court in case of CIT Vs. Jodhpur Development Authority 139 DTR 1 has also held that such authority are entitled to registration u/s 12A r.w.s. 12AA as they fall within the expression advancement of any other object of general public utility . Therefore, once the provisions of section 12A is applied, there cannot be any income to the assessee chargeable to tax which can be said to have escaped assessment. The Ld. CIT(A) without consid .....

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he contrary, the ld. D/R has supported the orders of the authorities below and submitted that there is no change of opinion. The AO has not made any query on this issue, therefore, it cannot be said that it was a case of change of opinion. 14.3. We have already dealt with this issue at length in the assessee s appeal in ITA No. 862/JP/2014 for the A.Y. 2005-06, and allowed the ground of the assessee after following the judgments of the various Hon ble High Courts. No change into facts and circum .....

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djudication. 17. The appeal of the assessee is partly allowed. ITA No. 903/JP/2014 (Revenue s appeal) : 18. This is Revenue s appeal for the A.Y. 2006-07. As we have quashed the assessment in assessee s appeal in ITA No. 863/JP/2014, therefore, we dismiss this appeal of the revenue. Moreover, the AO subsequently, has assessed the income at Nil, in favour of the assessee. ITA No. 21/JP/2013 (Revenue s appeal) : 19. Now we take up Revenue s appeal in ITA No. 21/JP/2013 for the Assessment Year 2009 .....

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and therefore it is not entitled for benefit of exemption u/s 11. (iii) Not appreciating the fact that even if the assessee was registered u/ 12AA by the CIT in pursuance of order of Hon ble ITAT dated 31.03.2009 & 04.05.2012, the AO could deny to allow benefit of section 11 to the assessee in view of newly inserted proviso to section 2(15) and the AO did not allow benefit of section 11 observing that the assessee is hit by the proviso to section 2(15). (iv) Deleting the disallowance of Con .....

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nd the assessment was framed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act) vide order dated 30.12.2011. While framing the assessment, the AO held that the assessee is not a charitable organization, therefore, he disallowed the exemption u/s 11 and computed the income after making disallowance of CER, depreciation, undisclosed profit from auctioned property and expenses on Haz Yatri at ₹ 142,35,90,440/-. The assessee aggrieved by this order, preferred .....

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d. The ld. CIT (A) also deleted the disallowance made on account of estimated profit from auction of the plots. 21. Aggrieved by this, the revenue is in appeal before this Tribunal. 22. It is noticed that there is no ground no. (i). 23. Ground nos. (ii) & (iii) are against allowing exemption u/s 11 of the IT Act. The ld. D/R submitted that the ld. CIT (A) was not justified in granting the exemption. He submitted that the AO has given a finding of fact that the assessee is engaged in the acti .....

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aw. He submitted that there is no dispute with regard to the fact that the activity of the assessee falls within the ambit of general public utility. He submitted that the AO has failed to appreciate the facts of the case in right perspective. He submitted that from the objectives of the assessee, it can be gathered that the assessee is engaged in the charitable activity. He submitted that housing is one of the important aspect of a man s life. The assessee is providing housing to the citizen of .....

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ctivities being undertaken by the assessee. He submitted that under the identical facts, the Hon ble Jurisdictional High Court in the case of CIT vs. Jodhpur Development Authority, 139 DTR 1 (Raj.) has held that the authority is carrying out charitable activities. He further placed reliance on the decision of Coordinate Bench in the case of Hoshiarpur Improvement Trust & Others vs. ITO in ITA No. 200/Asr/2010. Therefore, he supported the order of ld. CIT (A). 23.2. We have heard rival conten .....

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public utility. Authorities below were not justified in declining the benefit of section 11 read with section 2(15) to the assessee, and in holding that the assessee trust was not covered by advancement of any object of general public utility. The Coordinate Bench has held that even if the activities in the nature of trade, commerce or business etc. are undertaken in the course of actual carrying out of advancement of any object of general public utility, till the end of the previous year releva .....

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on Reserve amounting to ₹ 26,99,65,069/-. The ld. D/R supported the order of the AO. 24.1. On the contrary, the ld. Counsel for the assesee supported the order of ld. CIT (A). 24.2. We have heard rival contention, perused the material available on record and gone through the orders of the authorities below. The ld. CIT (A) has decided the issue in para 13 of his order as under :- After going through rival submissions it is seen that CER of ₹ 26,99,65,069/- is not debited in the P& .....

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turn. It was informed by the ld. ARs that source of application of R. 232 crores are Capital loans of R. 27 crores (approx) taken by the appellant and Deposits made by the persons interested in buying houses of ₹ 360 crores odd and alo income of ₹ 98 crore odd shown in the return. The appellant has been held as a charitable organization following Hon ble ITAT Jaipur Bench order dated 4.5.2012 and its income to the extent of application as mentioned in section 11 is exempt from taxati .....

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not see any reason to interfere in the order of ld. CIT (A), which is hereby confirmed. The ground of the revenue is rejected. 25. Ground No. (v) is against deleting the disallowance of depreciation of ₹ 1,73,53,269/-. The ld. D/R supported the order of the AO and submitted that the ld. CIT (A) was not justified in allowing the depreciation. 25.1. The ld. Counsel for the assessee submitted that the issue is covered in favour of the assessee by the judgment of the Hon ble Punjab & Harya .....

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ociety, 330 ITR 21 has held as under :- In the present case, the assessee is not claiming double deduction on account of depreciation as has been suggested by learned counsel for the Revenue. The income of the assessee being exempt the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purposes of the trust. There is no double deduction claimed by the assessee as canvassed by the Revenue. Judgment .....

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ts Education Society (2011) 330 ITR 21 cited above where on the same issue Hon ble Court held : The income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purposes of the trust. There is no double deduction claimed by the assessee as canvassed by the Revenue. 25.2. We have heard rival contentions and perused the material available on record. We find that ld. CI .....

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ing the disallowance. 26.1. On the contrary, the ld. Counsel for the assessee submitted that the AO has made the addition on the basis of conjectures and surmises without any basis and the profit is estimated @ 30% on sale price which as per the AO was not accounted for in the P&L account. 26.2. We have heard rival contentions and perused the material available on record. We find that the ld. CIT (A) has given a finding of fact that the addition has been made at 30% without any basis with th .....

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ditures are not related to the activities of the assessee and cannot be termed as expended for the charitable cause. He submitted that the AO disallowed this expenditure on the basis that the assessee lost its status as charitable organization. 27.1. On the contrary, the ld. Counsel for the assessee has supported the order of the ld. CIT (A). 27.2. We have heard rival contentions and perused the material available on record. We find that the ld. CIT (A) has accepted the contention of the assesse .....

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n the result, appeal of the revenue is dismissed. ITA NO. 864/JP/2014 (Assesee) ITA NO. 904/JP/2014 (Revenue) 28. Now we take up assessee s appeal in ITA No. 864/JP/2014 and revenue s appeal in ITA No. 904/JP/2014 pertaining to assessment year 2010-11. First we take up assessee s appeal in ITA No. 864/JP2014. The assessee has raised the following grounds of appeal :- 1. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the action of the AO in holding that n .....

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ible for exemption u/s 11 & 12. 2.1.The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in not distinguishing the various case laws relied by assessee in holding that the case of the assessee is covered by the first proviso to section 2(15). 3. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in holding that the contingency and equalization reserves is in the nature of provision made on estimate and not an ascertained liability and accordingly .....

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below :- 1. It is submitted that assessee filed the return declaring Nil income on 01.10.2010. There is no assessment made u/s 143(3). The notice u/s 148 was issued on 08.02.2013, i.e. before the expiry of 4 years from the end of the relevant AY. As per section 151 as applicable prior to its amendment w.e.f 01.06.15, in a case where assessment is not made u/s 143(3)/147 i.e., where assessment is made u/s 143(1), no notice shall be issued u/s 148 by an AO who is below the rank of JCIT after the .....

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ourt in case of CIT Vs. SPL S Siddhartha Ltd. 345 ITR 223 has held that if a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether. The same is also not an irregularity curable u/s 292BB. Therefore, the notice issued u/s 148 is illegal and bad in law and thus the assess .....

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commercial while issuing notice u/s 148 on 08.02.2013. So far as AY 2009-10 is concerned, before the issue of notice u/s 148, the Ld. CIT(A) vide its order dt. 26.10.2012 (PB 110-128) has held that assessee is entitled to exemption u/s 11 & 12 and therefore stand of the AO in treating the assessee as not fulfilling charitable purpose is not at all justified. Thus, when before the issue of notice u/s 148, it is held by the Ld. CIT(A) that assessee is a charitable institution eligible for exe .....

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s also submitted that Hon ble ITAT vide its order dt. 31.03.2009 (PB 95-102) directed the Ld. CIT to grant registration to the assessee u/s 12AA. Thereafter, the Ld. CIT vide order dated 29.05.09 (PB 103) has granted registration to the assessee u/s 12AA of the Act w.e.f. 27.03.08. Thereafter, because of insertion of proviso to sec. 2(15) w.e.f. 01.04.2009, the registration granted to the assessee was withdrawn from AY 2009-10 but the Hon ble ITAT vide order dt. 04.05.2012 (PB 104-109) set aside .....

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lso held that such authority are entitled to registration u/s 12A r.w.s. 12AA as they fall within the expression advancement of any other object of general public utility . Therefore, once the provisions of section 12A are applied, there cannot be any income to the assessee chargeable to tax which can be said to have escaped assessment. The Ld. CIT(A) without considering the above factual and legal position has simply held that AO has recorded proper reasons that income chargeable to tax has esc .....

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w and be quashed. 29.2. The ld. D/R opposed the submissions and supported the orders of the authorities below. 29.3. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. The basis of reopening of the assessment was that the proviso 1 & 2 to section 2(15) of the Act were held to be applicable to the facts of the case. As per section 147 of the Act, the assessment can be reopened if the AO has reason to believe that any .....

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missions of the assessee, we have decided the issue as under :- 23.2. We have heard rival contention, perused the material available on record and gone through the orders of the authorities below. We find that the Coordinate Bench has dealt with the identical issue elaborately in the case of Hoshiarpur Improvement Trust & Others vs. ITO in ITA No. 200/Asr/2010. The Coordinate Bench has considered various judgments and came to the conclusion that as long as broader public cause is served, whe .....

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of advancement of any object of general public utility, till the end of the previous year relevant to the assessment year 2016-17, the activities will continue to be covered by the scope of Section 2(15). The year under appeal is 2009-10, therefore, respectfully following the decision of the Coordinate Bench in the case of Hoshiarpur Improvement Trust & Others vs. ITO in ITA No. 200/Asr/2010, we do not see any reason to interfere in the order of ld. CIT (A). Ground Nos. (ii) and (iii) are re .....

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t of the amount of ₹ 18,05,31,330/- credited in the CER fund account, ₹ 10,83,09,615/- in A.Y. 10-11 is utilised in making the payment to Nagar Nigam/Nagar Parisad on handing over the colonies to them for maintenance/freezing of cost. Thus, net amount of ₹ 7,22,21,715/- in A.Y. 10-11 remained unutilised during the year consideration. This amount is meant for payment to Nagar Nigam/other expenses on freezing of cost/handing over of the colonies to Nagar Nigam. This is an ascerta .....

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is in the nature of provision which has been calculated on the basis of approximate rules of thumb by adopting certain percentages which have also varied over a period of time. The CER created in the preceding years has still not been utilized and there is a huge balance in this reserve of ₹ 122.81 crores, for the previous year ending 31.03.2010. This shows that this provision is an estimate and not an ascertained liability. The net amount in the CER of the years which is carried forward i .....

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needs of the public at large. For this purpose it works out the cost of housing project by adding to the cost of land, the cost of development, the cost of construction, other direct cost, interest cost, tools & plants charges, administrative charges and CER. The CER is added for working out the cost of the houses for different income groups as per the principal of costing approved by its Costing & Finance Committee as under:- Income Group Rate of CER upto 2010 Rate of CER after 2010 (PB .....

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rimary schools, dispensaries and community centres, etc.; v) Awards to be paid as a result of litigation, etc. in property disposal; vi) Maintenance and upkeep of colonies after handing over of houses to the allottes till the colony is handed over to municipality/ local bodies. 2. From the above, it can be noted that the contingency charged to works account by crediting to Contingency & Equalization Reserve Fund A/c is not a contingent liability but is a provision for meeting an ascertained .....

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utta Company Ltd. reported at 37 ITR 1 held that difficulty in estimation of value would not convert an accrued liability into a contingent one. In the present case incurring of expenditure is certain. Hence, amount debited under the head contingency to the works account cannot be added to the income. 3. We may further point out that the amount provided on account of contingencies to the works account is not claimed in the profit & loss account. The amount provided on this account is carried .....

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ubmissions it is seen that CER of ₹ 26,99,65,069 is not debited in the P&L Account. The disallowance of the reserve does not affect the appellant s eligibility of claiming exemption u/s 11. Section 11 states that 85% of the total income of the institution should be applied towards the objects for which it was created. The application of the income by the Board during the year of ₹ 232,59,28,849 as specified in Form 10B audit report is much more than the total income of the appell .....

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and its income to the extent of application as mentioned in section 11 is exempt from taxation u/s 11, therefore there is no justification for making the disallowance of ₹ 26,99,65,069/- especially when the reserve has been informed created from the sale proceeds of houses and not appropriated from profit shown in the P&L Account called Revenue account as presumed by the AO. In view of above, the disallowance confirmed by the CIT(A) be deleted and the ground of the department be dismi .....

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at CER of ₹ 26,99,65,069/- is not debited in the P&L account. The disallowance of the Reserve does not affect the appellant s eligibility of claiming exemption u/s 11. Section 11 states that 85% of the total income of the institution should be applied towards the objects for which it was created. As the application of income by the Board during the year of R. 232,59,28,849/- as specified in Form 10B Audit Report is much more than the total income of the appellant shown at ₹ 98,90 .....

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application as mentioned in section 11 is exempt from taxation u/s 11, therefore there is no justification for making the disallowance of ₹ 26,99,65,069/- specially when the Reserve has been informed created from the sale proceeds of houses and not appropriated from profit shown in the P&L account called Revenue account as presumed by the AO. In the light of above facts, we set aside the order of ld. CIT (A) by deleting the disallowance. The ground of the assessee is allowed. 32.4. In .....

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ntingencies and Equalization Reserve (CER) fund was first to be utilized and then further claim can be allowed. (iii) ignoring the fact that the assessee has carried out an accounting mistake by not routing the current year credit & debit of CER through the existing CER provision account. 2.(i) deleting the addition made on account of disallowance of depreciation of ₹ 2,44,51,074/-. (ii) ignoring the fact that the depreciation claimed needs to be examined in two parts (a) depreciation .....

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s appeal, we have already decided identical issue, in the assessee s appeal herein above by setting aside the order of the ld. CIT (A) thereby deleting the disallowance. As no change into facts and circumstances is pointed out by the Revenue, therefore, in conformity with the decision taken in the assessee s appeal in ITA No. 864/JP/2014, we dismiss the grounds of the revenue. 35. As regards Ground Nos. 2(i) to (iii) and Ground No. 3 of the revenue s appeal, we have already decided the identica .....

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rtaining to assessment year 2011-12. First we take up assessee s appeal in ITA No. 865/JP2014. The assessee has raised the following grounds of appeal :- 1. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the action of the AO in holding that the case of the assessee is covered by the first proviso to section 2(15) of the I.T. Act and therefore its object of advancement of general public utility shall not be a charitable purpose and accordingly holding tha .....

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ion made on estimate and not an ascertained liability and accordingly confirming disallowance of ₹ 15,76,30,855/- out of the disallowance of ₹ 28,07,03,370/- made by the AO. 3. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confir4ming the disallowance of Haz Yatri Expenses claimed at ₹ 5,24,970/-. 4. The assessee craves right to add, alter or amend any of the grounds of the appeal. 5. The appropriate cost be awarded to the assessee. 38. Ground No .....

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essee by upholding the order of ld. CIT (A). In the present appeal, the facts are same, therefore, following the decision taken in ITA No. 21/JP/2013, we set aside the order of ld. CIT (A) thereby allowing the grounds of the assessee. 39. Ground No. 2 relates to confirming the disallowance of ₹ 15,76,30,855/- on account of Contingency and Equalization Reserve. We have decided this issue in the revenue s appeal in ITA No. 21/JP/2013 in favour of the assessee by taking into consideration the .....

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erused the material available on record. We find that the ld. CIT (A) has accepted the contention of the assessee on the ground that it will not make any difference even if such addition Application of income by the Board during the year of ₹ 232,59,28,849/- as specified in Form 10B Audit Report is much more than the total income of the appellant shown at ₹ 98,90,80,448/- in the statement of total income filed with the return. This finding of fact is not controverted by the revenue. .....

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ng to the assessment year 2011-12. The ground raised by the revenue are as under :- On the facts and in the circumstances of the case and in law the ld. CIT (Appeals) Jaipur-II Jaipur has erred in :- 1.(i) restricting the disallowance made on account of Contingencies and Equalization Reserve (CER) fund to ₹ 15,76,30,855/- in place of ₹ 28,07,03,370/-. (ii) ignoring the fact that the Opening Balance of Contingencies and Equalization Reserve (CER) fund was first to be utilized and then .....

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er years when the assessee was enjoying benefit u/s 11 & 12. (iii) ignoring the fact that in the year of benefit u/s 11 & 12 the cost of assets have been allowed as application and therefore any further deduction will amount to double deduction. 3. deleting the addition made on account of undisclosed Profit from auctioned property ₹ 41,19,06,949/- 43. As regards Ground nos. 1(i) to (iii) of the revenue s appeal, we have already decided identical issue, in the assessee s appeal here .....

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are dismissed. 45. In the result, appeal of the revenue is dismissed. ITA NO. 866/JP/2014 (Assesee) ITA NO. 906/JP/2014 (Revenue) 46. These two cross appeals ITA No. 866/JP/2014 and ITA No. 906/JP/2014 by the assessee and revenue respectively arise against the order of ld. CIT (A)-II, Jaipur dated 21.10.2014 pertaining to assessment year 2012-13. First we take up assessee s appeal in ITA No. 866/JP2014. The assessee has raised the following grounds of appeal :- 1. The ld. Commissioner of Income .....

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ishing the various case laws relied by assessee in holding that the case of the assessee is covered by the first proviso to section 2(15) of the Act. 2. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in holding that the contingency and equalization reserves is in the nature of provision made on estimate and not an ascertained liability and accordingly confirming disallowance of ₹ 15,03,12,173/- out of the disallowance of ₹ 27,06,31,918/- made by the AO. 47 .....

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of the assessee by upholding the order of ld. CIT (A). In the present appeal, the facts are same, therefore, following the decision taken in ITA No. 21/JP/2013, we set aside the order of ld. CIT (A) thereby allowing the grounds of the assessee. 48. Ground No. 2 relates to confirming the disallowance of ₹ 15,03,12,173/- on account of Contingency and Equalization Reserve. We have decided this issue in the revenue s appeal in ITA No. 21/JP/2013 in favour of the assessee by taking into consid .....

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of the case and in law the ld. CIT (Appeals) Jaipur-II Jaipur has erred in :- 1.(i) restricting the disallowance made on account of Contingencies and Equalization Reserve (CER) fund to ₹ 15,03,12,173/- in place of ₹ 27,06,31,918/-. (ii) ignoring the fact that the Opening Balance of Contingencies and Equalization Reserve (CER) fund was first to be utilized and then further claim can be allowed. (iii) ignoring the fact that the assessee has carried out an accounting mistake by not rout .....

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