Calcutta High Court
Exemption vs Future Education & Research on 7 September, 2022
O-86
ITAT/371/2017
IA No.GA/2/2017 (Old No.GA/3666/2017)
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX
EXEMPTION, KOLKATA
-Versus-
FUTURE EDUCATION & RESEARCH
TRUST "NIMPHOOL"
Appearance:
Mr. Soumen Bhattacharya, Adv.
...for the appellant.
BEFORE:
The Hon'ble JUSTICE T.S. SIVAGNANAM
-And-
The Hon'ble JUSTICE SUPRATIM BHATTACHARYA
Date : 7th September, 2022.
The Court : This appeal filed by the revenue under
Section 260A of the Income Tax Act, is directed against the
order dated 8th February, 2017 passed by the Income Tax
Appellate Tribunal, "A" Bench, Kolkata (the Tribunal) in
ITA No.1031/Kol/2013 and CO No.69/Kol/2013 for the
assessment year 2009-10.
2
The revenue has raised the following substantial
question of law for consideration:
(i) Whether on the facts and in the circumstances
of the case the learned Tribunal was justified
in law to hold that the quantum of income not
qualifying for exemption under Section 11 of
the said Act should be restricted partly to the
tune of Rs.11.93 lakhs and not wholly for the
purpose of taxation?
We have heard Mr. Soumen Bhattacharya, learned
standing counsel for the appellant/revenue. None appears
for the respondent/assessee.
On going through the order passed by the
Commissioner of Income Tax (Appeals)[CIT(A)] which order
was affirmed by the learned tribunal, we find that the
entire matter is factual. In fact, the CIT(A) and the
learned tribunal had granted partial relief to the
respondent/assessee by examining the factual position. The
endeavour of the learned standing counsel for the
appellant/revenue is to convince this Court that the
learned tribunal erred in restricting the rejection of the
claim for exemption only to the tune of Rs.11.93 lakhs and
not for the entire sum. In support of his contention the
learned standing counsel for the appellant/revenue has
referred to the decision of the Hon'ble Supreme Court in
the case of Director of Income Tax Vs. Bharat Diamond
Bourse, reported in (2003) 179 CTR SC 225 and has drawn our
attention to paragraph 36 of the said judgment. On going
through the said decision, we find that it was rendered
considering the factual position in the said case and the
said decision will not render any assistance to the case of
the revenue before us. On the factual aspect the learned
tribunal has rendered the following finding :
"On examination of the order of Authorities Below
and other relevant records, we find that flat was purchased
at Alipore in the financial year 2009-10 on 23.09.2009
which was registered in the name of trustee and his wife.
The total cost of flat purchased was for Rs.2,25,60,000/-
as evident from the indenture of conveyance which is placed
on page 7 of the paper book. Further, the same was told in
the financial year 2010-11 dated 08.02.2011 for Rs.2.50
crores as evident from the indenture of conveyance which is
placed on record. Thus the benefit of Rs.24.40 lacs was
derived by the trustee and his wife on the sale-purchase of
Alipore property. Admittedly, assessee made investment of
Rs.1.10 crores in the purchase of the said property located
at Alipore. Therefore, in our considered view, the assessee
is entitled for the share of profit to the extent of its
investment i.e. Rs.24.40 lacs x 1.10 crores divide by
Rs.2.25 crores = 11.93 lacs. So this amount of profit has
to be taxed under the IT Act as the provision of Sec.
13(1)(c) of the Act as the provisions has been contravened
to this extent on the basis of available facts and
circumstances. We also find that there is no dispute with
regard to amount of Rs.1.10 crores which was financed by
the trust has come back to the trust. Therefore, the amount
of profit to the extent of Rs.11.93 lacs has to be subject
to tax in the relevant year in which the profit was
derived. As such, the assessee will not be eligible for
claiming exemption u/s 11 of the Act for the amount of
profit of Rs.11.93 lacs but the entire exemption claimed by
the assessee cannot be denied."
The learned tribunal had also taken note of the
decision in the case of CIT Vs. Fr. Mullers Charitable
Institutions, reported in 363 ITR 230 (Kar.) and the
decision in the case of DIT(E) Vs. Sheth Mafatlal Gagalbhai
Foundation Trust, reported in (2001) 249 ITR 533 (Bom) and
held that in the event of violation of the provisions of
Section 13(1)(c) of the Act, the amount of benefit applied
to the specified persons will not be eligible for exemption
under Section 11 and, therefore, the benefit under Section
11 of the Act to the extent of Rs 11.93 lakhs was held to
be not available to the assessee in the assessment year
2011-12. Thus, the finding having been rendered taking note
of the peculiar facts and situation, we find that there is
no substantial question of law arising for consideration in
this appeal. Accordingly, the appeal (ITAT/371/2017) fails
and is dismissed.
Consequently, the connected application for stay
(IA No.GA/2/2017) stands closed.
(T.S. SIVAGNANAM, J.)
(SUPRATIM BHATTACHARYA, J.)
S.Das/
