Commissioner Of Income Tax (Exemptions v. Shri Ram Nagar Trust

R.M. AMBERKAR (Private Secretary) IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J. INCOME TAX APPEAL NO. 1160 OF 2017 Commissioner of Income Tax (Exemptions) ..Appellant Versus Shri Ram Nagar Trust No. 1..Respondent ................... Mr. Suresh Kumar for the Appellant Mr. Suresh Kumar for the Appellant Mr. Madhur Agarwal i/by Ruturaj H. Gujar for the RespondentMr. Madhur Agarwal i/by Ruturaj H. Gujar for the Respondent ................... CORAM : AKIL KURESHI & S.J. KATHAWALLA, JJ. DATE : JUNE 18, 2019. P.C.: 1.This appeal is filed by the Revenue to challenge thejudgment of the Income Tax Appellate Tribunal, Mumbai("the Tribunal" for short) dated 31.5.2016 2.Following question is presented for our consideration:- "Whether on the facts and in the circumstances of the case and inlaw, the Tribunal was justified in holding that the assessee Trust isentitled for the benefit of accumulation of income u/S. 11(2) of theI.T. Act, ignoring the fact that the assessee Trust has not specificallypointed out the particular purpose as per objects for accumulationand hence, not fulfilled the condition fully as required by Section11(2)(a) of the I.T. Act?" 3.Respondent - assessee is a Trust registered under thePublic Trust Act and enjoys registration under Section 12A ofthe Income Tax Act, 1961 ("the Act" for short). For theassessment year 2010-11, the assessee had filed return ofincome which reflected receipt of Rs. 2 Crores arising out ofthe settlement of civil suit filed by the Trust in respect of animmovable property. Under such settlement, the assesseehad agreed to withdraw the suit upon being paid the sum ofRs. 2 Crores. The assessee contended that the receipt wascapital receipt and not exigible to tax alternatively out ofsaid, sum of Rs. 1.89 Crores (rounded off) was accumulatedfor the purpose of trust. The assessee claimed benefit underSection 11(2) of the Act. The Tribunal by the impugnedjudgment held in favour of the assessee upon which theRevenue has filed this appeal. The grounds of objections ofthe Revenue are two fold. Firstly, that the return in Form 10was not filed along with the return and that the accumulationof the income was merely with the specification "for FutureProject". According to the Revenue, this was too general anddid not specify the purpose for which the funds will beutilized in future. 4.Tribunal overruled both the objections. It was held thatthe declaration under 10B was duly filed during the course ofthe assessment. Further, before the CIT(A), the assesseepointed out that its principal activity is of setting up andmanaging hospitals. It had ongoing projects costing morethan Rs. Thousand Crores. A sum of Rs. 1.89 Crores will beutilized for such purpose. The Tribunal relied on variousdecisions including that of Delhi High Court in case of CITV/s. Hotel and Restaurant Association[1] to hold that therequirement of accumulation of the fund for specific purposemust be viewed in light of the ongoing projects of the Trust.The Tribunal noted that the assessee had undertaken thehospital projects with considerable capital expenditure. Theprescription of accumulating the said amount for its furtherprojects must be seen in light of such ongoing project. Wedo not see any error in the view of the Tribunal. No questionof law arises. The appeal is dismissed. [ S.J. KATHAWALLA, J. ] [ AKIL KURESHI, J ] 1[2003] 261 ITR 190 (Del)