KOTTUR RENGASWAMY MUDALIAR ESTATE Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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S. Kannan, Accountant Member -
(1.) CENTERED as they are on certain common issues, these two appeals by the assessee-trust were heard together and are disposed of by a common order.
(2.) The assessee is a trust which during the relevant point of time had both agricultural and non-agricultural income. In the original assessments relating to the two assessment years in question, in the context of the assessee's claim for exemption under Section 11 of the Act, the assessee's case was that the income applied by it to charitable purposes must be attributed to its non-agricultural income and that, if so attributed, the assessee was entitled to full exemption under Section 11 of the Act. The Assessing Officer, however, took a different line. Finding that both agricultural and non-agricultural income of the assessee were mixed up, he concluded that the income applied to charitable purposes must be regarded as having come out of the two streams of income, namely, agricultural and non-agricultural, on proportionate basis. Proceeding to calculate on the aforesaid basis the non-agricultural income applied to charitable purposes, the Assessing Officer found that there were shortfall in the application of such income to such purposes. Accordingly, he brought the short-falls to tax.
The first appellate authority declined to interfere in the matter. The assessee took up the matter in appeal before the ITAT contending, inter alia, that the assessee was maintaining separate books of account for agricultural and non-agricultural operations and that consequently, the lower authorities were not justified in denying the assessee the benefit of exemption under Section 11 to the full extent. Finding that this plea was raised before them for the first time, the Tribunal set aside the assessment orders and remitted the matter to the first appellate authority for fresh consideration and decision. This was on 30-4-1976.
(3.) ON 21-1-1985 the first appellate authority, in his turn, remitted the matter to the Assessing Officer for fresh consideration and decision.;
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