Shri Gujarat Bhavsar Samaj, Ahmedabad V. The Income Tax Officer (Exemption), Ward-2, Ahmedabad

ITA 1175/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0251 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 11-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Additional evidence
• Section: 80G; 12A

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ I.T.A. NO. 1175/AHD/2017 ( / ASSESSMENT YEAR : 2013-14) SHRI GUJARAT BHAVSAR SAMAJ 1, BHAVSAR CHATRALAY, D.P. SCHOOL, NEW WADAJ, AHMEDABAD- 380013 / VS. ITO (EXEMPTION) WD-2, AHMEDABAD ./ ./ PAN/GIR NO. : AAC TS0 636 G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BANDISH SOPARKAR, AR / RESPONDENT BY : SHRI S. K. DEV, SR. DR / DATE OF HEARING 27/06/2019 !'# / DATE OF PRONOUNCEMENT 28/06/2019 $%/ O R D E R PER SUDHANSHU SRIVASTAVA - JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER DATED 02.03.2017 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD (HEREINAFTER CALLED THE CIT (A)) AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS A TRUST AND IS REGISTERED UNDER SEC. 12A OF THE INCOME TAX ACT, 19 61 (HEREINAFTER ITA NO. 1175/AHD/2017 [SHRI GUJARAT BHAVSAR SAMAJ VS. ITO] A.Y. 2013-14 - 2 - CALLED THE ACT) VIDE APPROVAL DATED 04.02.1993. THE TRUST IS ALSO REGISTERED UNDER SEC. 80G (5) OF THE ACT VIDE APPRO VAL DATED 02.11.2007. AS PER THE OBJECTS OF THE TRUST, THE M AIN OBJECT OF THE TRUST IS TO PROVIDE BUILDING FOR POST FUNERAL ACTIV ITY AND ALSO PROVIDE ACCOMMODATION TO PERSONS COMING TO AHMEDABAD FOR ME DICAL TREATMENT. 2.1 THE RETURN OF INCOME WAS FILED FOR THE RELEVANT ASSESSMENT YEAR DECLARING TOTAL INCOME AT NIL. THE CASE WAS S ELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE AO OBSERVED THAT THE ASSESSEE TRUST HAD RECEIVED RS. 4 7,50,000/- TOWARDS GIRLS CHHATRALAYA CONSTRUCTION FUND WHICH THE ASSESSEE HAD TREATED AS CORPUS DONATION RECEIVED DURING THE YEAR. THE ASSESSEE TRUST WAS REQUIRED TO FURNISH THE NAME AND ADDRESS OF THE DONOR AND THE DIRECTIONS, IF ANY, ISSUED BY THE DON OR SO AS TO TREAT THE DONATIONS OF RS. 47,50,000/- AS CORPUS DONATION . IT WAS SUBMITTED BY THE ASSESSEE TRUST THAT THE ASSESSEE T RUST HAD RECEIVED DONATION OF RS. 50,00,000/- FROM SHRI NATUBHAI BHAV SAR WHO WAS A NON-RESIDENT INDIAN RESIDING IN UNITED STATES OF AM ERICA. IT WAS FURTHER SUBMITTED THAT THE DONATION HAD BEEN RECEIV ED THROUGH M/S. HELENA KAUSHIK WOMENS COLLEGE, MALSISAR, JHUNJHUNU , RAJASTHAN AND THE AMOUNT OF DONATION WAS DIRECTLY CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE TRUST FROM THE SAID M/S. HE LENA KAUSHIK WOMENS COLLEGE. THE AO TOOK THE VIEW THAT THERE W ERE NO ITA NO. 1175/AHD/2017 [SHRI GUJARAT BHAVSAR SAMAJ VS. ITO] A.Y. 2013-14 - 3 - SPECIFIC DIRECTIONS FROM THE DONOR TO APPLY THE DON ATION TOWARDS A PARTICULAR CAUSE AND, THEREFORE, THE DONATION COULD NOT BE TREATED AS CORPUS DONATION. SINCE THE AMOUNT OF THE DONATION H AD BEEN TAKEN DIRECTLY TO THE BALANCE SHEET WITHOUT ROUTING IT TH ROUGH THE INCOME AND EXPENDITURE ACCOUNT, THE DONATION WAS TREATED A S REGULAR INCOME OF THE ASSESSEE. CONSEQUENTLY, AN ADDITION OF RS. 47,50,000/- WAS MADE. 2.2 THE ASSESSEE TOOK THE MATTER BEFORE THE LD. FIR ST APPELLATE AUTHORITY AND THE ASSESSEE REQUESTED THE LD. CIT (A ) TO ADMIT ADDITIONAL EVIDENCES TO VERIFY THE FACT THAT THE DO NATION RECEIVED BY THE ASSESSEE TRUST WAS A CORPUS DONATION. IT WAS S UBMITTED BEFORE THE LD. CIT (A) THAT MR. NATUBHAI BHAVSAR WAS DESIR OUS OF MAKING DONATION FOR THE PURPOSE OF ESTABLISHING BABUBEN PR AHLADJI BHAVSAR WOMAN EDUCATION HOSTEL THROUGH THE ASSESSEE TRUST A ND HE HAD APPROACHED THE SECRETARY OF THE ASSESSEE TRUST FOR THE SAME. THE TRUST HAD INFORMED MR. NATUBHAI BHAVSAR THAT IT HAD NO APPROVAL OF RECEIVE FOREIGN FUNDS AND, THEREFORE, MR. NATUBHAI HAD APPROACHED THE TRUSTEE OF HELENA KAUSHIK EDUCATION FOUNDATION AT USA FOR NECESSARY GUIDANCE TO REMIT THE FUNDS IN INDIA TO T HE TRUST FOR THE PURPOSE FOR ESTABLISHING THE HOSTEL FOR WOMENS EDU CATION. IT WAS FURTHER SUBMITTED THAT THE TRUSTEE OF HELENA KAUSHI K EDUCATION FOUNDATION HAD INFORMED MR. NATUBHAI BHAVSAR THAT H ELENA KAUSHIK ITA NO. 1175/AHD/2017 [SHRI GUJARAT BHAVSAR SAMAJ VS. ITO] A.Y. 2013-14 - 4 - EDUCATION FOUNDATION COULD HELP IN RECEIVING DONATI ON IN USA AND IN SENDING THE FUND TO M/S. HELENA KAUSHIK WOMENS COLLEGE AT RAJASTHAN AS IT WAS HAVING THE NECESSARY PERMISSION TO RECEIVE FOREIGN FUNDS AND WHICH IN TURN COULD BE TRANSFERRE D TO THE ASSESSEE TRUST THROUGH BANKING CHANNELS. THE ASSESSEE ALSO SUBMITTED VARIOUS CORRESPONDENCE/S IN THIS REGARD BEFORE THE LD. CIT (A) AND SUBMITTED THAT IN VIEW OF THE CORRESPONDENCE/S THE FOREIGN FUNDS WHICH WERE TRANSFERRED TO THE ASSESSEE TRUST THROUG H M/S HELENA KAUSHIK WOMENS COLLEGE OF RAJASTHAN, A DIRECT LINK WAS ESTABLISHED AND IN VIEW THEREOF THE DONATION RECEIV ED BY THE ASSESSEE TRUST WAS A CORPUS DONATION AS SPECIFIC DI RECTION WAS EXPRESSED IN THE CORRESPONDENCES WHICH WERE NOW SUB MITTED BEFORE THE LD. CIT (A). IT WAS ALSO SUBMITTED THAT MRS. J ANET, WHO WAS CORRESPONDING ALONG WITH MR. NATUBHAI WAS THE WIFE OF MR. NATUBHAI BHAVSAR AND, THEREFORE, BOTH OF THEM WERE WORKING IN TANDEM TO ENSURE THAT THE FUNDS WERE TRANSFERRED TO THE ASSESSEE TRUST. HOWEVER, THE LD. CIT (A) DID NOT ACCEPT THE ASSESSEES CONTENTION AND DISMISSED THE ASSESSEES APPEAL BY H OLDING THAT THE AO WAS RIGHT IN DENYING THE BENEFIT OF SEC. 11(1)(D ) OF THE ACT AND ADDING THE SAME TO THE INCOME OF THE ASSESSEE. 2.3 NOW, THE ASSESSEE IS BEFORE THIS TRIBUNAL (ITAT ) AND HAS CHALLENGED THE ORDER OF THE LD. CIT (A) BY RAISING IN THE FOLLOWING GROUNDS OF APPEAL:- ITA NO. 1175/AHD/2017 [SHRI GUJARAT BHAVSAR SAMAJ VS. ITO] A.Y. 2013-14 - 5 - 1. THE LEARNED AO HAS ERRED IN LAW AND ON FACTS IN TREATING THE AMOUNT OF RS. 47,50,000/- RECEIVED AS DONATION FOR GIRLS CHHATRALAYA CONSTRUCTION BEING CORPUS DONATION AS GENERAL DONATION AND LD. CIT(A)-9, AHMEDABAD HAS ERRED IN CONFIRMING THE ADDITION EVEN THOUGH THE PURPOSE OF THE DONATION WA S FULLY EXPLAINED TO HIM THAT THE DONATION RECEIVED BY THE APPELLANT TRUST WAS CORPUS DONATION WITH REFERENCE TO THE E-MAIL CORRESPONDENC E OF THE NRI DONOR. 2. THE LD. CIT(A)-9, AHMEDABAD, WHILE CONFIRMING TH E ADDITION, HAS ERRED BOTH IN LAW AND ON FACTS IN NOT GIVING AN Y DIRECTION TO AO TO GRANT DEDUCTION ON ACCOUNT OF THE AMOUNT APPLIED FOR THE OBJECT OF THE TRUST I.E. CONSTRUCTION OF GIRLS CHHATRALAYA WHICH IS EVIDENT FROM THE AUDIT REPORT FOR THE YEAR UNDER CONSIDERAT ION. 3.0 THE LD. AUTHORISED REPRESENTATIVE (AR) REITERAT ED THE SUBMISSIONS AS WERE MADE BEFORE THE LD. CIT (A). HE DREW OUR ATTENTION TO THE COPIES OF E-MAILS PLACED IN THE PA PER BOOK AND HIGHLIGHTED THE FACT THAT IT WAS IMPLICIT IN THE SA ID E-MAILS THAT THE DONATION WAS BEING MADE FOR THE PURPOSE OF BUILDING A GIRLS HOSTEL. IT WAS PRAYED THAT THE ASSESSEES APPEAL BE ALLOWED . 4.0 IN RESPONSE, THE LD. SR. DR PLACED EXTENSIVE RE LIANCE ON THE FINDINGS AND OBSERVATIONS OF THE LD. CIT (A) AS WEL L AS THAT OF THE AO AND SUBMITTED THAT THE ADDITION HAD BEEN RIGHTLY CONFIRMED BY THE LD. CIT (A). 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE BEFORE US FOR CO NSIDERATION IS WHETHER THE AMOUNT OF RS. 47,50,000/- RECEIVED BY T HE ASSESSEE TRUST FROM HELENA KAUSHIK WOMENS COLLEGE, JHUNJHUNU, RAJ ASTHAN CAN BE CONSIDERED TO BE CORPUS DONATION IN THE HANDS OF THE ASSESSEE TRUST. ADMITTEDLY, AND UNDISPUTEDLY, THE AFORESAID AMOUNT WAS NOT ITA NO. 1175/AHD/2017 [SHRI GUJARAT BHAVSAR SAMAJ VS. ITO] A.Y. 2013-14 - 6 - DIRECTLY RECEIVED BY THE ASSESSEE TRUST FROM THE DO NOR SHRI NATUBHAI BHAVSAR BUT WAS ROUTED THROUGH HELENA KAUSHIK WOMEN S COLLEGE, JHUNJHUNU, RAJASTHAN. IT IS PLEA OF THE ASSESSEE T HAT THE AMOUNT WAS NOT DIRECTLY SENT TO THE ASSESSEE TRUST BY SHRI NAT UBHAI BHAVSAR BECAUSE THE ASSESSEE TRUST DID NOT HAVE THE REQUIRE D PERMISSION TO RECEIVE FOREIGN DONATIONS AND HELENA KAUSHIK WOMEN S COLLEGE, JHUNJHUNU, RAJASTHAN HAD THE REQUISITE APPROVAL AND , THEREFORE, THE FUNDS WERE ROUTED THROUGH IT. IT IS SEEN THAT THE SOLE GROUND FOR THE AO TO MAKE THE ADDITION WAS THAT THE INTENTION OF T HE DONOR, WHILE GIVING THE DONATION, WAS NOT A SPECIFIC AND, THEREF ORE, IN ABSENCE OF SPECIFIC DIRECTIONS IT COULD NOT BE SAID THAT IT WA S IN THE FORM OF CORPUS DONATION. ALTHOUGH, THE ASSESSEE COULD NOT FURNISH REQUIRED EVIDENCES BEFORE THE AO, EVIDENCES IN THE IN THE FO RM OF E-MAILS WERE FILED BEFORE THE LD. CIT (A) AND THESE E-MAILS ARE DATED DECEMBER 2011 ONWARDS. COPIES OF THESE E-MAILS HAV E BEEN PLACED IN THE PAPER BOOK FILED BY THE ASSESSEE AND IT HAS BEEN MENTIONED IN THESE E-MAILS THAT THE DONOR MR. NATUBHAI BHAVSAR A ND HIS WIFE JANET HAVE, THROUGH THE GOOD OFFICES OF M/S HELENA KAUSHIK WOMENS COLLEGE, TRANSFERRED THE AMOUNT FOR THE PUR POSE OF FURTHERANCE OF CONSTRUCTION OF GIRLS HOSTEL BY THE ASSESSEE TRUST THAT IS SHRI GUJARAT BHAVSAR SAMAJ. MOST OF THE E-MAILS HAVE JOINTLY BEEN SENT BY MR. NATUBHAI BHAVSAR AND HIS WIFE JANE T. IT IS ALSO UNDISPUTED THAT THE AMOUNT OF DEDUCTION HAD BEEN TR ANSFERRED BY ITA NO. 1175/AHD/2017 [SHRI GUJARAT BHAVSAR SAMAJ VS. ITO] A.Y. 2013-14 - 7 - M/S HELENA KAUSHIK WOMENS COLLEGE TO THE ASSESSEE TRUST THROUGH BANKING CHANNELS. WE HAVE ALSO PERUSED THE REMAND REPORT OF THE AO WHICH ALSO STATES THAT NO FURTHER VERIFICATION W AS REQUIRED IN THIS REGARD. THEREFORE, IN VIEW OF THE PECULIAR FA CTS OF THIS CASE, IT IS OUR CONSIDERED OPINION THAT IN SUBSTANCE THE REQ UIREMENT FOR A SPECIFIC DIRECTION WITH REGARD TO THE CORPUS DONATI ON STANDS FULFILLED BY THE VARIOUS E-MAILS EMANATING FROM MR. NATUBHAI BHAVSAR AND MRS. JANET AND, THEREFORE, THE ASSESSEE SHOULD BE G RANTED THE BENEFIT OF THE IMPUGNED AMOUNT BEING TREATED AS CORPUS DONA TION. ACCORDINGLY, ACCEPTING THE CONTENTIONS OF THE LD. A R, WE ALLOW THE GROUNDS RAISED BY THE ASSESSEE AND DIRECT THE AO TO TREAT THE IMPUGNED DONATION AS CORPUS DONATION. 6. IN THE FINAL RESULT, THE APPEAL OF THE ASSESSE E STANDS ALLOWED. SD/- SD/- (AMARJIT SINGH) (SUDHANSHU SRIV ASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 28/06/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < THIS ORDER PRONOUNCED IN OPEN COURT ON 28 /06/2019