TMI Blog2022 (8) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee trust. Therefore, we are inclined to dismiss the appeal of the revenue on the same reasoning mutatis mutandis. Therefore, the revenue stands dismissed. - I.T.A. No. 3079/Mum/2018, 3152/Mum/2018, 3080/Mum/2018 & 3153/Mum/2018 - - - Dated:- 14-6-2022 - SHRI ABY T. VARKEY, JM AND SHRI S. RIFAUR RAHMAN, AM Assessee by: Shri Sukhsagar Syal Revenue by: Shri Rajesh Damor (dR) ORDER PER ABY T. VARKEY, (JM): These aforesaid appeals preferred by the assessee and revenue are against the common order of the Ld. CIT(A)-01, Mumbai dated 23.02.2018 for the A.Y.2012-13. 2. At the outset, it was brought to our notice that the issues involved are no longer res-integra, since the issues are covered in the cases of Group Trust cases where in identical facts law were involved. On this submission of the Ld. AR of the assessee Shri Sukhsagar Sayal, the revenue could not controvert the same. In the light of this back-drop, we note that before us, there are two cross-appeals preferred by two assessee trusts Revenue for AY.2012-13. Therefore, the decision in the lead case will decide the outcome of the other cross appeals also. The lead case, we take into consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has received Rs.17,46,45,721/-, but applied an amount of Rs.12,55,91,477/- only towards objects of the trust which is less than 85% of the receipts as required by the provisions of section 11 of the Act. Further, assesse failed to fulfill the conditions laid in section 11(2). 4. We note from perusal of the aforesaid grounds that the revenue is aggrieved by the action of the Ld. CIT(A) deleting the action of the AO denying exemption claimed by the assessee u/s 10(34) of the Income Tax Act, 1961(hereinafter the Act ) on the dividend income received by the assessee trust. 5. At the outset, the Ld. AR of the assessee drew our attention to the fact that in the assessee s own Group trust case an identical issue arose, and the AO s similar action of denying the exemption claim u/s 10(34) of the Act in respect of dividend income was not accepted by the Ld. CIT(A), who was pleased to allow the same. Against the action of Ld. CIT(A), the revenue preferred similar/identical grounds of appeal raised (supra) in the present assessee s case/appeals before this Tribunal, and the Tribunal upheld the action of Ld. CIT(A). For that the Ld. AR drew our attention to the decision of Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived from property held under trust is section 11 and not any other section. The assessee trust cannot claim alternative exemption under section 10(34) because section 10(34) does not deal with income derived from property held under trust. (iv) On the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing depreciation without appreciating the fact that the assessee has claimed the deduction twice. The assessee trust claimed depreciation and also capital expenditure viz addition to fixed assets in the computation of income which amounted to double deduction. (v)The appellant prays that the order of the A.O. should be restored and order of the CIT(A) should be set aside. 6. From a perusal of the aforesaid grounds raised by the revenue in the Group Trust case Navajbhai Ratan Trust (supra), we find that similar grounds of appeal has been raised by the revenue in the present both appeals before us. We further note that the aforesaid grounds raised by the revenue has been adjudicated in assessee s favour by this Tribunal holding as under: - 11. The first issue to be decided in Revenue s appeal is with regard to the claim of exemption under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty held under trust wholly for charitable or religious purposes. 11.5 It is pertinent to note that vide Finance (No.2) Act, 2014, sub-section (7) was inserted in section 11 of the Act whereby it has been provided that benefits of exemption provided in section 10 shall not be available to any Trust/Institution registered and claiming the benefit of section 11 of the Act. This amendment was brought w.e.f. 1st April, 2015 and therefore, is only applicable to assessment year 2015-16 and onwards. Thus, respectfully following the aforesaid decision of Hon ble Jurisdictional High Court, order passed by the CIT(A), inter-alia, granting benefit of exemption under section 10(34) of the Act in respect of dividend income received by assessee is upheld. Accordingly, ground nos. (i) to (iii) raised in Revenue s appeal are dismissed. 7. Respectfully following the ratio of the decision of this Tribunal in Group Trust case i.e. M/s. Navajbhai Ratan Trust (supra), we are inclined to follow it since the department could not point out any change in facts or law. So on the same reasoning mutandis mutandis, we concur with the action of the Ld. CIT(A) allowing the claim of exemption u/s 10(34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) of the Act. The income that could be derived from such an investment would be dividend income or the capital gains on sale of such investment. However, due to violation of provisions of section 13, income derived from property held under trust is not exempted under section 11 of the Act. The issue which arises in the present case is whether the entire income of the trust shall become ineligible for exemption under section 11 of the Act or it is restricted to only the income derived from prohibited investments. 6.7 Similar issue arose for consideration before the Hon ble Jurisdictional High Court in the case of Sheth Mafatlal Gagalbhai Foundation Trust(supra), wherein the Hon ble Court observed as under: ..the Legislature has clearly indicated its mind in the proviso to section 164(2) when it categorically refers to forfeiture of exemption for breach of section 13(1)(d), resulting in levy of maximum marginal rate of tax only to that part of the income which has forfeited exemption. It does not refer to the entire income being subjected to maximum marginal rate of tax. Further, Hon ble Jurisdictional High Court in the case of CIT v. Audyogik Shikshan Mandal: 261 Taxma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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