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John Oakey & Mohan Ltd.Employees Provident Fund Trust Mohan Nagar Ghaziabad vs. ITO, Ward 4(2) New Delhi
January, 30th 2014

                    DELHI BENCHES : "E" NEW DELHI

                    BEFORE SMT. DIVA SINGH, JM AND
                     SHRI J.SUDHAKAR REDDY, A.M.

                           ITA no. 367/Del/2013
                         Assessment Year : 2009-10

John Oakey & Mohan Ltd.              vs.   ITO, Ward 4(2)
Employees Provident Fund Trust             New Delhi
Mohan Nagar


(Appellant)                                      (Respondent)

                  Appellant by:- Shri C.S.Aggarwal, Sr.Counsel
                                 Shri Ravi Pratap Mall, Adv.

                   Respondent by:- Shri Keyur Patel, Sr.D.R.



      This is an appeal filed by the assessee directed against the order of the

Ld.Commissioner of Income Tax (Appeals)-VIII, New Delhi dated 18.10.2012

pertaining to the AY 2009-10 on the following revised grounds.

1.   That the learned CIT(A) has erred both on facts and in law in upholding the
      order of the assessment.
2.    That the learned CIT(A) has erred both on facts and in law in upholding
      the findings of   the A.O. in treating John Oakey & Mohan Limited
      Employees Provident Fund Trust as unrecognized on an assumption that

      the assessee had not made compliance to the provisions of Sub-Rule 5 of
      Rule 77 of the Income Tax Rules 1962. Such a finding of learned A.O. and
      learned CIT(A) were erroneous when it overlooked the fact that, the
      assessee had filed an application for recognition of provident fund trust,
      in Form No. 40C of the Income Tax Rules and was pending with the CIT
      the prescribed authority.
3.    That the learned CIT(A) has further erred in upholding the addition made
      by the learned A.O. of Rs. 11,85,747/- representing an interest earned on
      investment on the basis that the provident fund trust was not recognized.
3.1   That the learned CIT(A) has overlooked the provisions of section 10(25) of
      the Act before sustaining the addition of Rs. 11 ,85,7471- and ignoring the
      factual substratum of the case.
4.    Further, the learned CIT(A) has erred in upholding the addition made on
      account of interest distributed to the members out of the income earned of
      Rs. 11,85,7471- since he treated the trust as unrecognized.
4.1   The findings of the learned A.O. and learned CIT(A) in the order of
      assessment and appellate order both are misconceived and contrary to
      the evidence on record and the statutory provisions.
5.    That in any case and without prejudice, on one hand the learned CIT(A)
      upheld the addition made of Rs. 11,85,747/- and on the other hand again
      brought to tax Rs. 11,75,9001-. The said action in sustaining both the
      additions are erroneous when none of them were sustainable both on facts
      and in law.
6.    That the learned CIT(A) has further erred in sustaining an addition of Rs.
      11,75,900/- paid as interest on incorrect assumption of fact and in law
7.    That, the learned CIT(A) has erred in confirming the addition ofRs.
      25,65,0001- the non-refundable loans on the ground that, funds has been
      treated as unrecognized by the A.O. The learned CIT(A) has overlooked
      that the assessee did comply with the statutory provisions of law. Further
      in sustaining the addition learned CIT(A) has completely overlooked the

      facts on record.
8.    That the learned CIT(A) has erred in holding that the assessee had failed
      to comply with the provisions laid down in Rule 74(4) of the Income Tax
      Rules and in any case and without prejudice the same could not have
      been held as sufficient to hold that the amounts aggregating to Rs.
      49,26,6471- is income taxable of the assessee for the instant
9.    In any case and without prejudice addition sustained by the learned
      CIT(A) aggregating to Rs. 49,26,647/- be directed to be deleted and it be
      held that, the learned A.O. had misconceived the facts.

2.    The Ld.Counsel for the assessee      moved an application u/s 29 of the

Income Tax Appellate Tribunal Rules, 1963 for the admission of additional

evidence,   which is an order of the Ld.CIT(A) dated 24.10.2013, wherein he

being the prescribed authority, granted recognition       to the assessee as a

recognized Provident Fund. It was submitted that the said order was passed

on 24.10.2013     i.e. after the disposal of the appeal by the Ld.CIT(A) on

18.10.2012 and as such the assessee could not file the above order of Ld.CIT

and the Ld.Commissioner of Income Tax (Appeals) had no benefit of this order.

3.    The Ld.D.R. opposed the contentions of the assessee and submitted that

this additional evidence should not be admitted.

4.    After hearing rival contentions we are of the considered opinion that this

is a fit case for admission of additional evidence in the form of an office order

dt. 24.10.2013, wherein the Ld.CIT(A), Delhi II, New Delhi accorded recognition

of the assessee's P.F.Trust with effect from 1st April,2007. This order goes to

the root of the matter. Hence we admit the same and restore the issue to the

file of the AO to take into consideration this new development and adjudicate

the issue de novo in accordance with law.

5.    In the result the appeal of the assessee is allowed for statistical


         Order pronounced in the Open Court on 23rd January, 2014.

                   Sd/-                               Sd/-

           (DIVA SINGH)                         (J.SUDHAKAR REDDY)
         JUDICIAL MEMBER                       ACCOUNTANT MEMBER

Dated: the 23rd January, 2014


Copy of the Order forwarded to:
  1. Appellant; 2.Respondent; 3.CIT; 4.CIT(A); 5.DR; 6.Guard File
                                                  By Order

                                                    Asst. Registrar
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