TMI Blog2018 (5) TMI 1911X X X X Extracts X X X X X X X X Extracts X X X X ..... turn was filed and the same was not accompanied by intimation in writing to the AO regarding exercise of the option under Explanation 2 to Section 11(1). The intimation was attached to the revised return filed under Section 139(5), and therefore, the benefit of filing of intimation was denied by the CIT(A). But as per the provision of the Section 139(5) there is no bar for filing intimation with the revised return. The intimation can be filed at any time before the assessment proceedings are completed. Therefore, the Assessing Officer as well as the CIT(A) was not correct in rejecting this claim of the assessee. Therefore, Ground No. 2 of the assessee s appeal is allowed. Granting benefit of Section 11 and 12 - when the assessee is involved in purely commercial activities. From the records we can see that the objects of the assessee was never disputed by the Revenue authorities at any stage. There was no change in the object and the functions of the assessee. The activities which are carried by the assessee was as per the objects and functions. Therefore, Revenue failed to establish that there is any commercial activity. CIT(A) rightly granted benefit of Section 11 and 12 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed with the belated return u/s 139(4) of the Income Tax Act, 1961. ITA No. 2431/DEL/2011 (A.Y 2007-08) Revenue s appeal 1. In the facts and circumstances of the case, the Ld. CIT(A) has erred in granting benefits of Section 11 12 of the Act even when the assessee is involved in purely commercial activities. ITA No. 1470/DEL/2011 (A.Y 2008-09) Revenue s appeal 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing the eligibility for exemption u/s 11 12 of the Income Tax Act, 1961 ignoring the fact the assessee is engaged in business activities and no charitable activity is being done which is the basic requirement for available the exemption u/s 11 of the Act. The assessee is also get hit by provision of section 13(2)(g) r.w.s. of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO amounting to ₹ 1,00,00,59,234/- which is a consequential effect to (1) above. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11 12 of IT Act which is arbitrary, contrary to the principles of natural justice and also misconceived on facts and law as such ought to be deleted. The Ld. AR submitted that the Assessing Officer as well as the CIT(A) were erred in denying the contention of the assessee that advances made for charitable purposes amounting to ₹ 26,87,656/- cannot be construed as application of income. Further, the Ld. AR submitted that the CIT(A) erred in denying the deemed application u/s 11 (1) Explanation 2 of the Income Tax Act on account of unrealized income of ₹ 4,01,16,473/- despite filing the necessary documents/intimation with the revised return u/s 139(5) of the Income Tax Act, 1961. 6. The Ld. DR relied upon the Order u/s 12A and 80G of the Act. The Ld. DR also relied upon the case of PIT Vs Charanjiv Charitable Trust 2014 43 taxmann.com 300 (Delhi)/2014 223 Taxman 71 (Delhi)/2014 267 CTR 305 (Delhi) where Hon ble Delhi High Court held that in case of a charitable trust, is found that provisions of section 13(1 )(c)(ii) read with section 13(3) are not following, trust would lose its exemption in entirety, with result that assessment of its income will be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not correct in denying the claim of application of income on the advances made to the various suppliers/contractors. Therefore, Ground No. 1 of the assessee s appeal is allowed. 8. As relates to Ground No. 2, the claim of assessee amounting to ₹ 4,01,16,473/- in respect of deemed application u/s 11(1) explanation 2 of the Income Tax Act, 1961 fulfills all the conditions prescribed therein. The CIT(A) held that the original return was filed and the same was not accompanied by intimation in writing to the Assessing Officer regarding exercise of the option under Explanation 2 to Section 11(1). The intimation was attached to the revised return filed under Section 139(5), and therefore, the benefit of filing of intimation was denied by the CIT(A). But as per the provision of the Section 139(5) of the Act, there is no bar for filing intimation with the revised return. The intimation can be filed at any time before the assessment proceedings are completed. Therefore, the Assessing Officer as well as the CIT(A) was not correct in rejecting this claim of the assessee. Therefore, Ground No. 2 of the assessee s appeal is allowed. 9. In result, appeal being ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee from assessment year 2009-10 and details have been submitted in this regard that activity has been found to be in the nature of trade, commerce or business and it has been offered for taxation accordingly for assessment year 2009-10. So, amendment effected from A.Y. 2009-10 cannot be proponed for A.Y. 2008-09. Similar issue has been decided by my predecessor while deciding the appeal for assessment year 2003-04, 2004-05, 2005-06 and 2006-07 and by me for assessment year 2007-08. So, respectfully following the earlie4r year s judgments, it is decided that assessee is eligible for exemption u/s. 11 12 of the IT Act. Ground No. 2 of appeal is allowed. 5. Ground No. 3 is consequential as ground No. 2 has already been allowed, appellant gets relief. Ground No. 3 is also allowed. 6. Ground No. 4 pertains to not allowing deduction with regard to provisions for advances written back amounting to ₹ 5,01,613/-. In this regard vide letter dated 12.9.2011 Id. AR of the appellant has submitted that provision for advances written back is with respect to the provisions made in earlier assessment years and not claimed as expenditure while computing the taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary charge in computing the net income. Secondly, the Supreme Court was concerned with the case where the assessee had claimed deduction of the cost of the asset under Section 35(1) of the Act, which allowed deduction for capital expenditure incurred on scientific research. The question was whether after claiming deduction in respect of the cost of the asset under Section 35(1), can the assessee again claim deduction on account of depreciation in respect of the same asset. The Supreme Court ruled that, under general principles of taxation, double deduction in regard to the same business outgoing is not intended unless clearly expressed. The present case is not one of the type, as rightly distinguished by the CIT (Appeals).' 8.1 As facts and circumstances of the appellant are identical, following the judgment of the Hon ble Delhi High Court, it is held that depreciation should be allowed to the appellant. Ground No. 6 of appeal is allowed. There is no need to interfere with the findings of the CIT(A) as the CIT(A) after going through various records given a finding. In fact, the Hon ble Apex Court in case of CIT vs. Rajasthan Gujrati Charitable Found ..... X X X X Extracts X X X X X X X X Extracts X X X X
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