TMI Blog2023 (10) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... looking into the facts of the instant case, the appeal of the Department is dismissed. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Kamlesh Makwana, CIT D.R. For the Respondent : Shri M. K. Patel, A.R. ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals)-9, (in short Ld. CIT(A) ), Ahmedabad in Appeal No. CIT(A)-9/10229/DCIT(E)Cir-1/18-19 vide order dated 02.07.2019 passed for Assessment Year 2016-17. 2. The Revenue has taken the following grounds of appeal:- 1. Whether the ld. CIT(A) has erred in law and on facts in allowing the claim of exemptions u/s. 11(1)(a) and 11(2) of the Act to the assessee without appreciating the facts and findings of the AO. 2. Whether the ld. CIT(A) has erred in law and on facts in holding that the assessee has not violated the provisions of Section 11(5) of the Act without appreciating the facts and findings of the AO. 3. The Revenue craves to add, alter, amend, modify, substitute, delete and/or rescind all or any Grounds of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the gold and silver in hand as reflected in balance sheet and the gold and silver purchases during the year are being added to the earlier balances of gold and silver. The Gold has been in possession of the trust for the whole year, which clearly highlights that the nature of purchase of gold was for investment. Our contention is duly supported by the Judgment of Chennai Tribunal in the case of Dy Commissioner of Income Tax (Exemptions) - II v/s. Sri Vekkaliamman Educational and Charitable Trust(2014) 52-Taxman.com 139. In the judgment Hon'ble Court has clearly held that purchasing of gold by the trust on plea of distribution of Gold Medals to be given to Meritorious students was an investment in Gold bullion in violation of section 11(5) of the Income Tax Act, 1961 . Thus, in light of the above mentioned decision Assessee's contention is rejected. The Assessee has clearly violated the provisions of Section 11(5) of the Income tax Act and thus loses the right to claim exemption u/s 11 of the Act in view of Section 13(1)(d) of the Income tax Act, 1961 . The exemption claimed by the Assessee u/s. 11 is hereby disallowed u/s 13(1)(d) of the Income tax Act. The assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be irrelevant and not considered for deciding the issue at hand. Further, as per letter dated 17.06.2019, the appellant has mainly contended that a) There was opening balance of ornaments at Rs. 15,02,86,117.62 as per Schedule H (copy of which has been made available at page-47 of the paper book) and there was addition of new gold ornaments of Rs. 1,04,05,558/-(including the new ornaments, gold and silver of Rs. 96,79,982/-) making the closing balance at Rs. 16,06,91,676/- which is carried over to the balance-sheet. The appellant has furnished the complete details of the purchase of ornaments gold and silver of Rs. 96,79,982/- in the paper book at page -55, On referring to this page, it is seen that the appellant had purchased the gold and silver through 15 bills which included 2 bills for the purchase of silver bullion which was claimed to be used for preparation of various gold and silver ornaments for various, idols of the God in the temple at Mahudi. b) The appellant has also analyzed the relied upon decision of the Chennai Tribunal in the case of Venkaliamman Educational Charitable Trust(supra) and contended that in the past, the practice of purchasing gold an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined from the description of bills raised for job work. The close scrutiny of the bills of job work so raised clearly indicates that the ornaments like lotus made of silver, Ganga Jamuna set made of gold and silver, Divi-Stand made of seasam wood, seat made with lionshaped legs covered with silver foil, Angi made of silver etc, were made out of purchase of silver bullion and used for preparation of gold silver ornaments. The A.O. did not carry out necessary inquiries to hold that there was pure gold and silver lying with the appellant trust which could have been excluded from the modes of investments prescribed in section 11(5) of the Act read with section 11(2)(b) of the Act. Thus, the finding given by the A.O. is an erroneous one and not based on the concrete evidence in his possession. Therefore, the A.O.'s action to resort to section 13(1)(d) of the Act is not found to be fault-free. .. 5.4 After having carefully considered the facts and the evidences placed in the paper book in the form of purchase bills of silver, labour bills, form No.16A for making TDS from labour charges, accounting treatment given to this specific transaction, past settled history on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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