TMI Blog2018 (1) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant : Shri Amit Jain, Sr.D.R For The Respondent : Sh. PJ Khanna, CA ORDER PER BEENA A PILLAI, JUDICIAL MEMBER The present appeal has been filed by revenue against order dated 18/07/16 passed by Ld.CIT(A)-40, New Delhi for assessment year 2012-13 on the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing the assessee s appeal by ignoring the fact that since the assessee continues to hold investment in foreign companies as well as in India companies and has not converted the same in the modes specified u/s 11(5), the trust is not entitled to benefit of section 11 and 12 of the Act. 2. The appellant craves leave to add, to alter or amend any ground of the appeal raised above at the time of the hearing. 2. Brief facts of the case are as under : Assessee is a Trust and filed its return of income declaring nil income on 11/09/12. Ld. AO completed the assessment by making addition in the hands of the assessee at ₹ 94,63,660/-. Ld. AO disallowed the exemption under section 11 and 12 of the Act to assessee by observing as under: It is pertin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust. He has observed that the properties had not been transferred or acquired by the trust because of ongoing litigation in the Court. The Will of late Raja Bahadur Sardar Singh of Khetri was under challenge in the probate proceedings and the same were pending adjudication. It has been stated at the Bar, that the probate proceedings are still pending. Till the Will is probated and it is affirmed that the Will is genuine, the respondent trust would not acquire legal right on the property as such for the purpose of the present Act i.e. Income Tax Act, 1961. In case, probate is denied, the, properties would not devolve on the respondent-trust. At present the legal and factual position is uncertain and inchoate. 6. Thus, the foreign shares have not been transferred in the name of the trust and were/are still in the name of late Raja Bahadur Sardar Singh. Commissioner of Income Tax (Appeals) has noticed that the Will, the shares are to become the corpus of the trust acquisition is dependent upon adjudication of the Probate. Thus, there cannot be violation of Section 11(5) in the facts of the present case. 7. With regard to advance of ₹ 1,10,000/-, Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intenance of these properties - immovable and movable - by maintaining staff and hiring lawyers to fight out the various cases to enable the probate to be allowed by the High Court. These expenditures are essential to save the Trust and its assets and these expenditures have been wrongly disallowed in the assessment order. 8. For Assessment Year 2004-05, the Ld. CIT (A) allowed to the assessee, the benefits of exemption under Sections 11 and 12 of the Act, following the ITAT Order dated 19.12.2008, passed in ITA No.862/Del/2008, in the assessee's case for Assessment Year 2004- 05 (copy at pages 9-11 of the assessee's paper book) and for Assessment Year 2008-09, the Ld. CIT (A) followed Tribunal Order dt.18.02.2011, passed in ITA Nos.5569, 5570 5571/De1/2010 for Assessment Years 2002-03, 2006-07 and 2007-08 (copy at APB pages 16-21). 9. Before us, the Ld. DR has contested the action of the Ld.CIT (A) for both the years under consideration, contending that the Ld. CIT (A) has erred in allowing to the assessee the benefits under Sections 11 and 12 of the Act, ignoring the fact that the assessee continues to hold investment in shares of Indian and foreign companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book; Copies of these orders have also been filed. We have carefully perused these orders. In the orders for the assessment years 1991-92 and 1992-93, the tribunal has not specifically dealt with the question of application of the income of the trust for charitable purposes in India. However, in the order for the assessment year 1993-94 dated 19.2.2002 in ITA No.1359/Del/1997, one of the grounds raised by the assessee (ground no. 6) was that the properties and accumulations could not be applied to charitable objects as the issue of administration was yet to be granted by the Hon'ble High Court and, therefore, the appellant should have been held to have applied and the accumulation for application should have been permitted . After noticing this ground, the tribunal followed its earlier orders for the assessment year 1991-92 and 1992-93 and allowed the assessee's appeal. In paragraph 3 of the order of the tribunal, it was further observed that on being confronted with the earlier orders of the tribunal, the department conceded that the issue of exemption under section 11 is covered in favour of the assessee. This order of the tribunal for the assessment year 1993-94 was fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. In the light of the earlier orders of the tribunal in the matter and there being no change in the facts of the case in the present assessment year vis a vis the facts in the assessment year 2001-02 and 2003-04, we are inclined to uphold the order of the Ld. Commissioner of Income Tax (Appeals) in holding that the assessee is entitled for exemption under section 11 and 12 of the Act. 13. From the above, it is seen that the Tribunal, for the numerous years mentioned above, has upheld the claim of the assessee for emption under Sections 11 and 12 of the Act, as correctly noted by the Ld.CIT(A). The facts for both the years presently before us have not been pointed out by the Department to have undergone any change. Therefore, finding no error whatsoever therein, the orders of the Ld. CIT (A) for both the years under consideration are upheld. Accordingly, the only ground raised in ITA No.2944/Del/2012 is rejected and ground No.1 taken for Assessment Year 2008-09 is also rejected. 2.3. Ld.AR submitted that in assessment orders in subsequent assessment years being 2013-14 and 2014-15 Ld. AO has himself granted exemption under section 11 and 12. A copy of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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