Trust’s Gold/Silver Purchase for Making Ornaments for Temple Idols Can’t Be Held as Invalid Investment u/s 11(5)

Case Details: ACIT (Exemption) v. Shri Mahudi Madhupuri Jain Shwetamber Murtipujak Trust - [2023] 156 taxmann.com 342 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• • Smt. Annapurna Gupta, Accountant Member & Siddhartha Nautiyal, Judicial Member
  • Kamlesh Makwana, CIT D.R. for the Appellant.
  • M.K. Patel, A.R. for the Respondent.

Facts of the Case

The assessee was a religious trust, which was approved under section 12A. The Assessing Officer (AO) disallowed the assessee’s claim of exemption under section 11 on an assumption of facts that assessee had made an investment in gold and silver in violation of the provisions of section 11(5)(b).

On appeal, the CIT(A) held that assessee had not made any investments in gold and silver in violation of the provisions of Section 11(5)(b). Aggreived-revenue filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that CIT(A) has correctly observed that AO erred in facts and law in disallowing the entire claim of exemption to the assessee on the ground that it violated the provisions of section 11(5).

The Commissioner (Appeals) observed that the assessee had purchased gold and silver along with silver bullion, which were used to prepare various gold and silver ornaments for multiple idols of the God in the temple. Further, the assessee had purchased silver bullion through two bills.

The remaining bills were for making the gold-coated silver ornaments, for which the assessee trust had also deducted the TDS. By any stretch of the imagination, it could not be said that the assessee had purchased the gold and silver in its raw form to keep with it and show investment purely for gold and silver only.

It was also observed that on the similar set of facts, the assessee was subject to scrutiny assessment for various years, and no additions have been made in the hands of the assessee. Therefore, without any change in facts, the principle of res judicata should apply.

List of Cases Reviewed

• • CIT v. Excel Industries Ltd. [2013] 38 taxmann.com 100/219 Taxman 379/358 ITR 295 (SC) (para 6) followed.

List of Cases Referred to

• • CIT v. Excel Industries Ltd. [2013] 38 taxmann.com 100/219 Taxman 379/358 ITR 295 (SC) (para 6).