ACIT, CC-3, JAIPUR V. ST.WILFRED EDUCATION SOCIETY, JAIPUR

ITA 1202/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9842 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 17-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: DILEEP SHIVPURI
• Keywords: Capital asset; Depreciation; Question of law; Cancellation of registration; Reassessment proceedings; Capital expenditure; Set aside
• Section: 271(1)(c); 143(3); 142(1); 12AA; 143(2); 69A; 43; 13; 32; 131; 69; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1202-1205/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15, 2015-16, 2016-17 & 2017-18 ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-03, JAIPUR CUKE VS. M/S ST. WILFRED EDUCATION SOCIETY, SECTOR-10, MEERA MARG, MANSAROVAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABAS4029H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI B. K. GUPTA (CIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI DILEEP SHIVPURI (ADV.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 17/12/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 02/01/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE FOUR APPEALS FILED BY THE REVENUE AGAINS T THE CONSOLIDATED ORDER OF LD. CIT(A)-4, JAIPUR DATED 19 .08.2019 FOR A.YS 2014-15, 2015-16, 2016-17 & 2017-18 RESPECTIVE LY. SINCE THE COMMON ISSUES ARE INVOLVED, ALL THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OFF BY THIS CONSOLIDATED ORDER. FACTUAL MATRIX OF THE CASE 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE SOCIETY IS ENGAGED IN PROVIDING EDUCATIONAL SERVICES THROUGH 1 9 EDUCATIONAL ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 2 INSTITUTES AT JAIPUR, AJMER AND MUMBAI UNDER THE UM BRELLA OF ST. WILFRED GROUP OF COLLEGES. THE ASSESSEE SOCIETY WAS REGISTE RED U/S 12AA OF THE ACT, 1961 VIDE LETTER NO. CIT/T&J/U/S 12A/1594 DATE D 02.01.2004 ISSUED BY THE LD. CIT-1, JAIPUR. THE ASSESSEE WAS A LSO GRANTED APPROVAL U/S 10(23C)(VI) OF THE ACT, 1961 VIDE NOTIFICATION NO. 10/2007-08 DATED 28.12.2007. 3. FOR A.Y 2014-15, THE ASSESSEE FILED ITS RETURN O F INCOME DECLARING TOTAL INCOME AT NIL ON 26.09.2014. THEREAFTER, A SE ARCH WAS CONDUCTED ON 11.12.2016 IN THE CASE OF M/S INTEGRAL URBAN COO PERATIVE BANK LTD TO WHICH THE ASSESSEE BELONGS AND THEREAFTER, A NOT ICE U/S 153C WAS ISSUED ON 22.12.2017 AND IN COMPLIANCE THEREOF, THE ASSESSEE FILED ITS RETURN OF INCOME ON 13.01.2018 DECLARING TOTAL INCO ME AT NIL CLAIMING EXEMPTION OF RS. 6,34,41,423/- U/S 10(23C)(VI) OF T HE ACT. THEREAFTER, THE NOTICE U/S 143(2) WAS ISSUED ON 11.07.2018 AND NOTICE U/S 142(1) ISSUED ON 17.07.2018 ASKING VARIOUS DETAILS/INFORMA TION FROM THE ASSESSEE SOCIETY. THE SAID DETAILS/INFORMATION WERE SUBSEQUENTLY SUBMITTED BY THE ASSESSEE AND EXAMINED BY THE ASSES SING OFFICER. 4. DURING THE PENDENCY OF REASSESSMENT PROCEEDINGS, THE LD. PR. CIT (CENTRAL), RAJASTHAN, JAIPUR PASSED ORDERS WITHDRAW ING APPROVAL GRANTED U/S 10(23C)(VI) ON 14.12.2018 AND APPROVAL U/S 12AA WAS ALSO WITHDRAWN VIDE LETTER NO. 267 ON 14.12.2018 ON THE GROUNDS OF DIVERSION OF THE FUNDS OF THE ASSESSEE SOCIETY FOR PERSONAL PURPOSES, NON GENUINE SCHOLARSHIP EXPENSES AND ADDITION TO FI XED ASSET CLAIMED BY THE ASSESSEE SOCIETY IN VIEW OF THE PAYMENT MADE TO RAJASTHAN HOUSING BOARD. THE ASSESSING OFFICER ACCORDINGLY HE LD THAT THE PENDING REASSESSMENT PROCEEDINGS HAVE TO BE COMPLETED IN VI EW OF THE ORDERS ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 3 PASSED BY THE LD. PR. CIT(CENTRAL), RAJASTHAN, JAIP UR WITHDRAWING THE APPROVAL U/S 10(23C)(VI) OF THE ACT AS WELL AS WITH DRAWAL OF REGISTRATION U/S 12AA OF THE ACT. 5. A SHOW CAUSE NOTICE DATED 21.12.2018 WAS ACCORDI NGLY ISSUED AND SERVED UPON THE ASSESSEE SOCIETY TO SHOW CAUSE AS TO WHY THE SURPLUS OF INCOME AND EXPENDITURE ACCOUNT MAY NOT B E TAXED SUBJECT TO OTHER DISALLOWANCES AS MAY BE NOTICED DURING THE CO URSE OF REASSESSMENT PROCEEDINGS. IN RESPONSE, THE ASSESSEE FILED ITS SUBMISSIONS WHICH WERE CONSIDERED BUT NOT FOUND ACC EPTABLE TO THE ASSESSING OFFICER. AS PER THE ASSESSING OFFICER, AL L ISSUES AND DISCREPANCIES ARE ALREADY DISCUSSED IN DETAIL IN TH E ORDERS PASSED BY THE LD. PR. CIT(CENTRAL), RAJASTHAN, JAIPUR WITHDRAWING THE APPROVAL U/S 10(23C)(VI) OF THE ACT AS WELL AS WITHDRAWAL OF REG ISTRATION U/S 12AA OF THE ACT AND ASSESSEE WAS NOT ABLE TO PROVE THE GENU INENESS OF THE SCHOLARSHIP EXPENSES CLAIMED AND IT WAS PROVED THAT THE ASSESSEE SOCIETY HAS DIVERTED THE FUNDS FOR THE BENEFIT OF T HE TRUSTEES. THE ASSESSEE HAS NOT FURNISHED ANY VALID REASONS AS TO WHY THE SURPLUS SHOULD NOT BE TAXED AFTER CONSIDERING THE TRUST AS NORMAL AOP WHICH IS TO BE ASSESSED TO TAX WHEN THE EXEMPTION IS ALREADY WITHDRAWN. THE ASSESSEE SOCIETY HAS ONLY REITERATED WHAT HAS ALREA DY BEEN DISCUSSED IN DETAIL IN THE PROCEEDINGS BEFORE THE LD PR. CIT (CE NTRAL), JAIPUR AND NO NEW FACTS HAS COME ON RECORD. THEREAFTER, THE ASSES SING OFFICER HAS REPRODUCED THE ORDER PASSED BY THE PR. CIT(CENTRAL) , JAIPUR WITHDRAWING THE APPROVAL U/S 10(23C)(VI) OF THE ACT AS WELL AS SECTION 12AA AND BASIS THE SAME, THE BENEFIT OF SECTION 11 AND 12 WERE DENIED TO THE ASSESSEE SOCIETY AND THE SURPLUS OF RS. 6,34 ,41,423/- SHOWN IN THE INCOME & EXPENDITURE ACCOUNT WAS TAXED WITHOUT PROVIDING ANY ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 4 EXEMPTION U/S 10(23C)(VI) OF THE ACT. THE ASSESSING OFFICER FURTHER HELD THAT THE ASSESSEE HAS CLAIMED BOGUS/NON GENUINE SCH OLARSHIP EXPENSES ON THE BASIS OF WHICH THE APPROVAL U/S 10(23C)(VI) HAS BEEN WITHDRAWN AND THEREFORE, AN AMOUNT OF RS. 25,83,142/- WAS DIS ALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE SOCIETY AN D IMPUGNED ASSESSMENT ORDER DETERMINING TOTAL INCOME AT RS. 6, 60,24,570/- WAS PASSED ON 28.12.2018 U/S 143(3) READ WITH SECTION 1 53C OF THE ACT. 6. FOR A.Y 2015-16, UNDER IDENTICAL SET OF FACTS AN D CIRCUMSTANCES OF THE CASE, THE SURPLUS AMOUNTING TO RS. 6,65,39,611/ - SHOWN IN THE INCOME AND EXPENDITURE ACCOUNT WAS BROUGHT TO TAX. IN ADDITION, DISALLOWANCE WAS MADE TOWARDS BOGUS SCHOLARSHIP EXP ENSES AMOUNTING TO RS. 27,94,931/- AND THE TOTAL INCOME WAS ASSESSE D AT RS. 6,93,34,540/- VIDE ORDER DATED 28.12.2018 U/S 143(3 ) R.W.S 153C OF THE ACT. 7. FOR A.Y 2016-17, UNDER IDENTICAL SET OF FACTS AN D CIRCUMSTANCES OF THE CASE, THE SURPLUS AMOUNTING TO RS. 11,18,05,539 /- WAS BROUGHT TO TAX BESIDES BOGUS SCHOLARSHIP EXPENSES AMOUNTING TO RS. 53,70,250/- WAS DISALLOWED. FURTHER, THE ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS. 47,10,589/- TOWARDS DEPRECIATION ON B UILDING FOR THE REASON THAT THE ASSESSEE SOCIETY HAS NO OWNERSHIP R IGHTS OVER THE LAND AND SUBSEQUENTLY NO DEPRECIATION CAN BE CLAIMED ON THE BUILDING CONSTRUCTED ON THE SAID LAND. ACCORDINGLY, THE TOTA L INCOME WAS ASSESSED AT RS. 12,18,86,380/- VIDE ORDER DATED 28. 12.2018 U/S 143(3) READ WITH SECTION 153C OF THE ACT. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 5 8. FOR A.Y 2017-18, UNDER IDENTICAL SET OF FACTS AN D CIRCUMSTANCES OF THE CASE, THE SURPLUS AMOUNTING TO RS. 13,65,62,014 /- WAS BROUGHT TO TAX. FURTHER, THE ASSESSING OFFICER HAD DISALLOWED BOGUS SCHOLARSHIP EXPENSES AMOUNTING TO RS. 9,74,954/- AND HAS ALSO D ISALLOWED DEPRECIATION CLAIMED ON BUILDING OF RS. 1,15,17,420 /-. FURTHER, AN AMOUNT OF RS. 1,56,59,500/- WAS BROUGHT TO TAX AS U NEXPLAINED MONEY U/S 69A OF THE ACT. ACCORDINGLY, TOTAL INCOME WAS D ETERMINED AT RS. 16,47,13,890/- VIDE ORDER DATED 28.12.2018 PASSED U /S 143(3) READ WITH SECTION 153B(1)(B) OF THE ACT. 9. THEREAFTER, THE ASSESSEE HAD MOVED IN APPEAL BE FORE THE TRIBUNAL AGAINST THE WITHDRAWAL OF APPROVAL U/S 10( 23C)(VI) AS WELL AS CANCELLATION OF REGISTRATION U/S 12AA OF THE ACT AN D HAS ALSO FILED APPEALS IN THE QUANTUM PROCEEDINGS BEFORE THE LD CI T(A) FOR EACH OF THE ASSESSMENT YEARS. 10. THE TRIBUNAL VIDE ORDER DATED 18.03.2019 IN ITA NO. 9 AND 10/JP/2019 HAS DIRECTED TO RESTORE THE APPROVAL U/S 10(23C)(VI) FROM THE DATE THE SAME WAS WITHDRAWN AND CANCELLED BY TH E LD. PR. CIT(CENTRAL), RAJASTHAN, JAIPUR. SIMILARLY, THE REG ISTRATION U/S 12AA WAS DIRECTED TO BE RESTORED FROM THE DATE THE SAME WAS WITHDRAWN BY THE LD. PR. CIT (CENTRAL), JAIPUR. 11. THEREAFTER, WHEN APPEALS IN THE QUANTUM PROCEE DINGS WERE TAKEN UP BY THE LD CIT(A), THE ORDER OF THE TRIBUNAL REST ORING THE APPROVAL U/S 10(23C)(VI) AS WELL AS THE REGISTRATION U/S 12AA WA S AVAILABLE ON RECORD AND TAKING THE ORDER OF THE TRIBUNAL INTO CONSIDERA TION AND EXAMINATION OF THE MATTER ON MERITS, THE LD CIT(A) VIDE ITS CON SOLIDATED ORDER DATED ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 6 14.08.2019 HAS GRANTED RELIEF TO THE ASSESSEE SOCIE TY FOR ALL THE YEARS UNDER CONSIDERATION AGAINST WHICH THE REVENUE IS NO W IN APPEAL BEFORE US. GROUNDS OF APPEAL 12. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESS EE SOCIETY ON THE FOLLOWING GROUNDS OF APPEAL AGAINST WHICH THE REVEN UE IS IN APPEAL AND THE SAID GROUNDS OF APPEAL ALONG WITH FIGURES FOR T HE RESPECTIVE YEARS HAVE BEEN TABULATED AS UNDER: GROUNDS OF APPEAL 2014-15 2015-16 2016-17 2017-18 1 SURPLUS OF INCOME OVER EXPENDITURE ACCOUNT 63441423 66539611 11805339 136562014 2 BOGUS S CHOLARSHIP EXPENSES 2583142 2794931 5370250 974954 3 DEPRECIATION ON BUILDING NOT APPLICABLE NOT APPLICABLE 4710589 11517420 4 UNEXPLAINED CASH U /S 69A 15659500 13. WE SHALL NOW TAKE UP EACH OF THESE GROUNDS OF A PPEAL AND THE RELEVANT CONTENTIONS TAKEN AND MATERIAL RELIED UPON BY BOTH THE PARTIES. TAXING SURPLUS AS PER INCOME AND EXPENDITURE ACCOUN T (A.Y 2014-15 TO A.Y 2017-18) 14. AS WE HAVE NOTED ABOVE, FOR EACH OF THE YEARS U NDER CONSIDERATION, THE ASSESSING OFFICER HAS BROUGHT TH E SURPLUS OF INCOME OVER EXPENDITURE TO TAX IN THE HANDS OF THE ASSESSE E SOCIETY FOR THE REASON THAT THE APPROVAL U/S 10(23C)(VI) AS WELL AS REGISTRATION U/S 12AA HAS BEEN WITHDRAWN BY LD. PR. CIT(CENTRAL), RA JASTHAN, JAIPUR. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 7 THE REASON FOR THE WITHDRAWAL OF THE APPROVAL BY TH E LD. PR. CIT(CENTRAL), JAIPUR RELATES TO DIVERSION OF FUNDS OF THE TRUST FOR PERSONAL PURPOSES, NON GENUINE SCHOLARSHIP EXPENSES AND ADDITION TO FIXED ASSET CLAIMED THE ASSESSEE SOCIETY IN VIEW OF THE PAYMENT MADE TO RAJASTHAN HOUSING BOARD. WE FIND THAT EACH OF T HESE ISSUES HAVE BEEN DEALT WITH AT LENGTH BY THE CO-ORDINATE BENCH WHILE RESTORING APPROVAL U/S 10(23C)(VI) AS WELL AS REGISTRATION U/ S 12AA AND FOLLOWING THE SAME, THE LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER NOT TO TAX THE SURPLUS OF INCOME OVER THE EXPENDITURE. 15. DURING THE COURSE OF HEARING, THE LD CIT DR HAS RELIED ON THE FINDINGS OF THE ASSESSING OFFICER AND THE LD COUNSE L FOR THE ASSESSEE HAS SUPPORTED THE FINDINGS OF THE LD CIT(A). 16. WE FIND THAT THE SOLE REASON FOR THE ASSESSING OFFICER IN TAXING THE SURPLUS OF INCOME OVER EXPENDITURE ACCOUNT WAS WITHDRAWAL OF APPROVAL U/S 10(23C)(VI) AND REGISTRATION U/S 12AA. FURTHER, THE ASSESSING OFFICER HAS SOLELY RELIED ON THE FINDINGS OF THE LD. PR. CIT(CENTRAL), JAIPUR WHILE WITHDRAWING THE APPROVAL U/S 10(23C)(VI) AND REGISTRATION U/S 12AA AND THERE IS NO SEPARATE AND INDEPENDENT FINDINGS RECORDED BY THE ASSESSING OFFICER IN ANY OF THE ASS ESSMENT YEARS INVOLVED IN TAXING THE SURPLUS INCOME AND GIVEN THA T THE GROUNDS ON WHICH THE APPROVAL/REGISTRATION HAS BEEN WITHDRAWN BY THE LD. PR. CIT(CENTRAL), JAIPUR HAS BEEN DEALT WITH AT LENGTH BY THE CO-ORDINATE BENCH VIDE ORDER DATED 18.03.2019 AND THE APPROVAL U/S 10(23C)(VI) AND REGISTRATION U/S 12AA HAS SINCE BEEN RESTORED, WE DO NOT SEE ANY INFIRMITY IN THE FINDINGS OF THE LD. CIT(A) WHO HAS TAKEN INTO CONSIDERATION THE RESTORATION OF APPROVAL SO GRANTE D BY THE TRIBUNAL AND ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 8 IN ABSENCE OF ANY OTHER REASONS/FINDING RECORDED BY THE ASSESSING OFFICER, IN GRANTING THE NECESSARY RELIEF TO THE AS SESSEE SOCIETY WHEREIN THE SURPLUS INCOME WAS DIRECTED NOT TO BE BROUGHT T O TAX. THE RELEVANT FINDINGS OF THE CO-ORDINATE BENCH RESTORING THE APP ROVAL U/S 10(23C)(VI) AND REGISTRATION U/S 12AA ARE REPRODUCED AS UNDER:- 58. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE FINDINGS OF THE LD P R.CIT RELATING TO DIVERSION OF FUND OF THE ASSESSEE SOCIETY FOR PERSONAL PURPOSES, NON- GENUINE SCHOLARSHIP EXPENSES AND PAYMENTS MADE TO RAJASTHAN HOUSING BOA RD IN CONTRAVENTION OF SECTION 11(5) READ WITH SECTION 13(1)(C) OF THE ACT CANNOT BE SUSTAINED. THESE ARE MERELY APPREHENSION WHICH HAVE BEEN RAISED BY T HE LD. PR. CIT AND THERE IS NO CREDIBLE EVIDENCE ON RECORD WHICH CAN CONCLUSIVE LY DEMONSTRATE THAT THE ASSESSEE IS NOT WORKING AS PER THE OBJECTS FOR WHIC H REGISTRATION WAS INITIALLY GRANTED, THAT THE ACTIVITIES OF THE ASSESSEE'S SOCI ETY ARE NOT GENUINE OR ANY PERSONAL BENEFIT HAS BEEN DERIVED BY ANY PERSON SO DEFINED U/S 13(3) OF THE ACT. THE CASE OF THE ASSESSEE THEREFORE DOESN'T FAL LS U/S 12AA(3) AND 12AA(4) OF THE ACT. IN LIGHT OF OUR DETAILS DISCUSSION AND FINDINGS, THE REGISTRATION OF THE ASSESSEE SOCIETY U/S 12AA IS HEREBY DIRECTED TO BE RESTORED FROM THE DATE THE SAME WAS WITHDRAWN AND CANCELLED BY THE LD. PR. CIT IN TERMS OF THE IMPUGNED ORDER. 60. IN ITA NO. 10/JP/2019, THE ASSESSEE HAS CHALLENGED THE WITHDRAWAL OF THE EXEMPTION GRANTED U/S 10(23C)(VI) OF THE ACT. BOTH THE PARTIES HAVE FAIRLY SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTAN CES OF THE CASE AS IN ITA NO. 9/JP/2019 AND FOLLOWING THE SAME REASONING, THE LD. PR. CIT HAS WITHDRAWN THE EXEMPTION BY INVOKING 15TH PROVISO TO SECTION 10(23C) OF THE ACT AND SIMILAR CONTENTIONS HAVE BEEN RAISED BY BOT H THE PARTIES. THEREFORE, OUR FINDINGS AND DIRECTIONS AS CONTAINED IN ITA NO. 09/JP/2019 SHALL APPLY MUTATIS MUTANDIS TO THIS MATTER AS WELL. THE EXEMPT ION GRANTED TO THE ASSESSEE SOCIETY U/S 10(23C)(VI) OF THE ACT IS HERE BY DIRECTED TO BE RESTORED FROM THE DATE THE SAME WAS WITHDRAWN AND CANCELLED BY THE LD. PR. CIT IN TERMS OF THE IMPUGNED ORDER. 17. IN LIGHT OF AFORESAID DISCUSSION, THE GROUND OF APPEAL SO TAKEN BY THE REVENUE FOR EACH OF THE YEARS UNDER CONSIDERATI ON IS HEREBY DISMISSED. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 9 NON GENUINE SCHOLARSHIP EXPENSES (A.Y 2014-15 TO A. Y 2017-18) 18. THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE SCHOLARSHIP EXPENSES FOR EACH OF THE YEARS UNDER CONSIDERATION AGAIN ON THE BASIS THE ORDER OF WITHDRAWAL OF APPROVAL U/S 10(23C)(VI) AND REGISTRATION U/S 12AA PASSED BY THE LD. PR. CIT(CENTRAL), JAIPUR. TH E LD. CIT(A) HAS REFERRED TO THE FINDINGS OF THE CO-ORDINATE BENCH W HILE RESTORING THE APPROVAL U/S 10(23C)(VI) AND REGISTRATION U/S 12AA AND HAS HELD THAT THE SCHOLARSHIP PAYMENTS ARE GENUINE PAYMENT AND TH E ADDITIONS SO MADE BY THE ASSESSING OFFICER WAS DIRECTED TO BE DE LETED. 19. DURING THE COURSE OF HEARING, THE LD CIT DR HAS RELIED ON THE FINDINGS OF THE ASSESSING OFFICER AND THE LD COUNSE L FOR THE ASSESSEE HAS SUPPORTED THE FINDINGS OF THE LD CIT(A). 20. GIVEN THAT THE ASSESSING OFFICER HAS SOLELY REL IED ON THE FINDINGS OF THE LD. PR. CIT(CENTRAL), JAIPUR WHILE WITHDRAWI NG THE APPROVAL U/S 10(23C)(VI) AND REGISTRATION U/S 12AA AND THERE IS NO SEPARATE AND INDEPENDENT FINDINGS BY THE ASSESSING OFFICER IN AN Y OF THE ASSESSMENT YEARS INVOLVED AND GIVEN THAT THE MATTER RELATING T O SCHOLARSHIP EXPENSES HAS BEEN DEALT WITH AT LENGTH BY THE CO-OR DINATE BENCH VIDE ORDER DATED 18.03.2019 AND WHICH HAS BEEN FOLLOWED BY THE LD CIT(A), WE DO NOT SEE ANY INFIRMITY IN THE FINDINGS OF THE LD. CIT(A) IN GRANTING THE NECESSARY RELIEF TO THE ASSESSEE SOCIETY. THE R ELEVANT FINDINGS OF THE CO-ORDINATE BENCH ARE REPRODUCED AS UNDER:- 31. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE L D PR CIT HAS ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 10 RAISED CERTAIN APPREHENSION ABOUT NON-VERIFIABILITY AND GENUINENESS OF THE SCHOLARSHIP PAYMENTS MADE BY THE ASSESSEE SOCIETY TO ITS 301 STUDENTS DURING THE FINANCIAL YE AR 2013-14. THE BASIS OF SUCH APPREHENSION IS THAT NOTICES U/S 133( 6) ISSUED BY THE ASSESSING OFFICER TO SIXTEEN STUDENTS WERE NOT COMPLIED WITH AND IN TWO CASES, NOTICES WERE RETURNED UNSERVED, A ND THREE STUDENTS HAVE DENIED RECEIVING THE SCHOLARSHIP DURI NG THE FINANCIAL YEAR 2013-14. FURTHER, THESE STUDENTS WER E NOT PRODUCED FOR VERIFICATION AND IT WAS CONCLUDED THAT THE ASSESSEE HAS MISUSED FUNDS WHICH WERE CLAIMED AS EXPENSES IN THE GUISE OF SCHOLARSHIP PAYMENTS. IN RESPONSE, THE ASSESSEE SOCIETY HAS SUBMITTED THAT ALL SCHOLARSHIP PAYMENTS HAVE BEEN P AID THROUGH ACCOUNT PAYEE CHEQUES AND EXCEPT IN CASE OF ONE STU DENT WHO DIDNT PRESENT THE CHEQUE, ALL THE CHEQUES HAVE BEE N CLEARED AND PAYMENTS ARE DULY REFLECTED IN THE ASSESSEES BANK ACCOUNT. FURTHER, STUDENTS WERE PRODUCED FOR VERIFICATION BE FORE THE ITO AND AN AFFIDAVIT OF ASSESSEES ACCOUNTANT WHO ACCOM PANIED THE STUDENTS FOR VERIFICATION HAS BEEN PLACED ON RECORD AND CONFIRMATION LETTERS FROM THE STUDENTS HAVE ALSO BE EN FILED. 32. FIRSTLY, WE FIND THAT THE APPREHENSION RAISED B Y THE LD PR CIT IS BASED ON PROCEEDINGS CONDUCTED BY THE ASSESSING OFFICER FOR AY 2014-15 WHEREBY THE AO HAS ISSUED THE SUMMONS TO THE STUDENTS AND BASIS THAT, HE HAS REACHED CERTAIN PRE LIMINARY FINDINGS AS THE ASSESSING OFFICER HAS FINALLY PASSE D THE ASSESSMENT ORDER FOR AY 2014-15 MUCH AFTER THE CONC LUSION OF THE PRESENT PROCEEDINGS BEFORE THE LD PR.CIT. WE TH EREFORE FIND THAT THE LD PR.CIT HAS PROCEEDED ON THE PRELIMINARY FINDINGS ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 11 ARRIVED AT BY THE ASSESSING OFFICER. THEREAFTER, EV EN THOUGH HE HAS ISSUED THE SHOW-CAUSE TO THE ASSESSEE DURING TH E IMPUGNED PROCEEDINGS, HOWEVER, HIS FINDINGS REFLECT THAT HE WAS GUIDED SOLELY BY THE INITIAL AND PRELIMINARY FINDINGS SO A RRIVED BY THE ASSESSING OFFICER AND HAS NOT CARRIED OUT ANY INDEP ENDENT EXAMINATION AND VERIFICATION OF THE TRANSACTIONS UN DER CONSIDERATION. THERE IS NOTHING IN LAW WHICH PREVEN TS THE PR.CIT TO RELY ON THE FINDINGS OF THE ASSESSING OFFICER, A T THE SAME TIME, HE SHOULD CARRY OUT INDEPENDENT EXAMINATION AND VER IFICATION AND THE FINAL FINDINGS SO ARRIVED AT SHOULD REFLECT HIS THOUGHT PROCESS AND THE REASONING. HOWEVER, IN THE INSTANT CASE, WE FIND THAT LD PR.CIT IS GUIDED BY THE FINDINGS OF THE ASSESSING O FFICER AND SUCH FINDINGS WHICH HAVE EVEN NOT ATTAINED FINALITY AS F AR AS PASSING OF THE ASSESSMENT ORDER FOR AY 2014-15 IS CONCERNED WH ICH WAS PASSED SUBSEQUENT TO PASSING OF THE IMPUGNED ORDER. 33. HAVING SAID THAT, THOUGH THERE HAVE BEEN CONTRA DICTORY CLAIMS REGARDING PRODUCTION OF STUDENTS FOR VERIFIC ATION BEFORE THE ASSESSING OFFICER. AT THE SAME TIME, IN OUR CONSIDE RED VIEW, MERE NON-APPEARANCE OF CERTAIN STUDENTS FOR VERIFICATION CANNOT BE A SOLE BASIS TO RAISE A QUESTION MARK ON THE WHOLE SC HEME AND GENUINENESS OF SCHOLARSHIP PAYMENTS TO OVER 301 STU DENTS ON A SAMPLE SURVEY SIZE OF AROUND 8% AND BASIS THE SAME, TO ARRIVE AT A FINDING THAT THE ASSESSEE HAS MISUSED FUNDS WHICH WERE CLAIMED AS EXPENSES IN THE GUISE OF SCHOLARSHIP PAY MENTS. WE FIND THAT THE DOCUMENTS PRODUCED BY THE ASSESSEE SO CIETY IN SUPPORT OF THE SCHOLARSHIP PAYMENTS HAVE NOT BEEN C ONSIDERED. THE SCHOLARSHIP PAYMENTS HAVE BEEN PAID TO THE REGU LAR STUDENTS ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 12 WHO ARE ENROLLED IN VARIOUS COURSES CONDUCTED BY TH E EDUCATIONAL INSTITUTIONS RUN BY THE ASSESSEE SOCIETY. DURING TH E COURSE OF HEARING, THE LD AR STATED AT THE BAR THAT THE CRITE RIA FOR SUCH SCHOLARSHIP HAS BEEN WELL LAID DOWN IN TERMS OF ECO NOMIC CONDITION OF THE STUDENTS AND THEIR PARENTS, PAST A CADEMIC RESULTS, ETC AND THERE IS A WELL LAID DOWN PROCESS FOR SEEKING APPLICATION FROM THE STUDENTS AND AFTER DUE VERIFIC ATION AND APPROVAL FROM THE HEAD OF THE EDUCATIONAL INSTITUTI ON, SCHOLARSHIP PAYMENTS ARE SANCTIONED AND SUBSEQUENTLY DISBURSED TO THE STUDENTS. IT IS ALSO NOT THE CASE OF THE REVENUE TH AT THESE ARE NOT REGULAR STUDENTS WHICH WERE ENROLLED WITH THE ASSES SEES EDUCATIONAL INSTITUTIONS AND THAT THEY WERE NOT ELI GIBLE TO RECEIVE THE SCHOLARSHIP AS PER THE POLICY FRAMED BY THE ASS ESSEES EDUCATIONAL INSTITUTIONS. THE CONFIRMATION LETTERS FILED BY THE STUDENTS HAVE BEEN PLACED ON RECORD AND THE CONTENT S THEREOF HAVE NOT BEEN DISPUTED. WE ALSO FIND THAT THE PAYME NTS HAVE BEEN MADE THROUGH ACCOUNT PAYEE CHEQUES TO ALL THES E STUDENTS AND ALL THE CHEQUES HAVE BEEN CLEARED (EXCEPT IN CA SE OF ONE STUDENT) AND THE SAID PAYMENTS HAS BEEN DULY REFLEC TED IN THE ASSESSEES BANK ACCOUNT. IN RESPECT OF THREE STUDEN TS WHO HAVE DENIED RECEIVING THE SCHOLARSHIP, THE ASSESSEE HAS SUBMITTED DUE EXPLANATION IN TERMS OF ONE OF THE STUDENT (YUVRAJ SINGH) HAVING NOT PRESENTED THE CHEQUE NO. 780228 FOR PAYMENT OF RS 3306 AND THE ENTRY FOR SUCH PAYMENTS BEEN REVERSED IN TH E BOOKS OF ACCOUNTS ON 31.3.2015, AND IN RESPECT OF OTHER TWO STUDENTS NAMELY ANSHU AGARWAL AND POOJA KUMAR JAIN, COPY OF THEIR SCHOLARSHIP FORMS DULY APPROVED BY THE PRINCIPAL, S T. WILFREDS COLLEGE FOR GIRLS, COPY OF ACCOUNT PAYEE CHEQUES IS SUED IN THEIR ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 13 FAVOUR BEARING CHEQUE NO. 780912 DATED 13.01.2014 F OR RS 3,180 CLEARED ON 10.02.2014 AND CHEQUE NO. 780917 DATED 1 3.01.2014 FOR RS 3,180 CLEARED ON 17.02.2014 RESPECTIVELY AND COPY OF THEIR CONFIRMATIONS ADDRESSED TO DCIT(EXEMPTION), CIRCLE 1, JAIPUR ARE AVAILABLE ON RECORD. THEREFORE, THERE IS NOTHING ON RECORD TO SUGGEST THAT THE SCHOLARSHIP PAYMENTS ARE NOT GENUI NE AND THE AMOUNT HAS BEEN WITHDRAWN BY THE ASSESSEE SOCIETY I N THE GUISE OF SCHOLARSHIP EXPENSES. FURTHER, THERE IS NOTHING ON RECORD WHICH REMOTELY SUGGESTS THAT THE AMOUNT SO CLAIMED BY THE ASSESSEE SOCIETY AS SCHOLARSHIP EXPENSES HAVE REACH ED BACK IN THE HANDS OF THE ASSESSEE SOCIETY AND THE LATTER HA S MISUSED SUCH FUNDS. WE THEREFORE FOUND THE APPREHENSION SO RAISE D BY THE LD PR.CIT BASED ON PRELIMINARY ENQUIRIES DRAWN BY THE ASSESSING OFFICER ARE NOT TENABLE AND SUSTAINABLE IN THE LIGH T OF CLEAR EVIDENCE ON RECORD BROUGHT BY THE ASSESSEE SOCIETY THAT THESE ARE GENUINE PAYMENTS OF SCHOLARSHIP TO ITS STUDENTS AS PER WELL LAID DOWN SCHOLARSHIP POLICY AND THEREFORE, SUCH AP PREHENSION HAS NO LEGAL LEGS TO STAND AND THE SAME CANNOT BE A BASIS TO DISALLOW THE CLAIM OF THE SCHOLARSHIP EXPENSES. 34. FURTHER, SEEKING CONFIRMATIONS FROM THE STUDENT S AS TO WHETHER THEY HAVE RECEIVED THE AMOUNT IS NO DOUBT P ART OF AN INVESTIGATE EXERCISE AND THE OFFICER IS DULY AUTHOR IZED UNDER LAW, HOWEVER SOLELY GUIDED BY NONRECEIPT OF CONFIRMATION AND THAT TOO, FROM FEW STUDENTS CANNOT BE SOLE BASIS FOR DENIAL O F CLAIM IN THE HANDS OF THE ASSESSEE SOCIETY. EVEN WHERE CERTAIN S CHOLARSHIP EXPENSES REMAINS UNVERIFIED, THE SAME AT BEST MAY B E A BASIS TO DISALLOW THE SAID EXPENSES LIMITED TO THE EXTENT IT REMAIN ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 14 UNVERIFIED, HOW THE SAME CAN BE BASIS TO HOLD THAT THE ASSESSEE SOCIETY HAS MISUSED THE FUNDS OF THE SOCIETY IN GAR B OF WHOLE OF THE SCHOLARSHIP EXPENSES AND IF THE SAID ANALOGY IS ACCEPTED, THEN EVERY EXPENSE CLAIM WHERE THE SAME IS NOT PROVED BY PERSONAL APPEARANCE OF THE PERSON TO WHOM SUCH PAYMENT HAS B EEN MADE WOULD BE A BASIS TO HOLD THAT THE ASSESSEE SOCIETY HAS MISUSED THE FUNDS OF THE SOCIETY. TO OUR MIND, AS THE ASSES SEE SOCIETY HAS DOCUMENTATION TO SUPPORT ITS CLAIM, SUCH APPREHENSI ON IS ILL- FOUNDED AND IS NOT SUPPORTED BY WELL ESTABLISHED LE GAL PROPOSITION AND RULE OF LAW. 35. FURTHER, WE FIND THAT THE REVENUE AUTHORITIE S HAVE TO APPRECIATE THAT A STUDENT STUDYING IN A COLLEGE OR UNIVERSITY CANNOT BE EQUATED WITH A REGULAR VENDOR OR A SERVIC E PROVIDER. A STUDENT INVOLVEMENT IS LIMITED TO THE EDUCATIONAL S PHERE AND TO A LIMITED EXTENT WHERE HE/SHE AND THEIR PARENTS/GUARD IANS ARE REQUIRED TO PAY HIS FEES AND RECEIVE SCHOLARSHIP WH EREVER HE/SHE IS ELIGIBLE FOR THE SAME AND NOTHING BEYOND THAT. A S AGAINST THAT, A VENDOR OR A SERVICE PROVIDER IS IN THE BUSINESS O F SUPPLY OF GOODS AND PROVISION OF SERVICES AND IS RUNNING A CO MMERCIAL ESTABLISHMENT WHERE HE MAINTAINS ITS RECORDS AND RE PORTS HIS RECEIPTS AND EXPENSES AND IS SUBJECT TO SCRUTINY OF THE TAX AUTHORITIES. THEREFORE, THE LATTER IS IN A POSITION AND IS EXPECTED TO TIMELY RESPOND AND CO-OPERATE IN THE PROCEEDINGS BEFORE THE TAXING AUTHORITIES AND IN CASE OF NON-COMPLIANCE, H E CAN BE FASTENED WITH APPROPRIATE PENALTY ACTIONS. HOWEVER, A STUDENT WHO IS STUDYING OR HAS RECENTLY PASSED OUT OF HIS/H ER COLLEGE OR UNIVERSITY AND WHO IS ISSUED SUMMONS UNDER SECTION 131, HE OR ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 15 SHE IS NOT EXPECTED TO APPRECIATE AND RESPOND IN TH E MANNER AS EXPECTED FROM ANY OTHER SERVICE PROVIDER. THEREFORE , WHERE THERE IS A NONCOMPLIANCE ON PART OF CERTAIN STUDENTS TO R ESPOND TO SUCH NOTICES/SUMMONS IN A TIMELY MANNER AND IN SOME CASE S, WHERE THEY HAVE RESPONDED THOUGH WITH WRONG FACTS, THE AU THORITIES HAVE TO APPRECIATE THE SAME IN A MORE REALISTIC MAN NER RATHER THAN IN A RITUALISTIC MANNER AND THEIR CONCLUSIONS SHOULD NOT BE GUIDED SOLELY BY NON-APPEARANCE OF CERTAIN STUDENTS BEFORE THEM. IN OTHER WORDS, UNLESS THE REVENUE AUTHORITIES ARE CEASED OF SUFFICIENT MATERIAL OR INFORMATION AND SUCH MATERIA L/INFORMATION IS CREDIBLE ENOUGH TO PROVE THAT THE ASSESSEE SOCIETY IS WITHDRAWING THE FUNDS OF THE SOCIETY IN THE GUISE OF SCHOLARSHI P EXPENSES SYSTEMATICALLY OVER A PERIOD OF TIME AND SUCH FUNDS ARE NOT REACHING THE STUDENTS CONCERNED IN WHOSE NAME THE S CHOLARSHIP PAYMENTS HAVE BEEN SHOWN TO HAVE BEEN MADE, IN SUCH A CASE, THE AUTHORITIES HAVE ALL THE RIGHT AND THE JURISDIC TION TO PROCEED AGAINST THE SOCIETY. HOWEVER, IN THE INSTANT CASE, THERE IS NOTHING ON RECORD WHICH HAS BEEN BROUGHT ON RECORD TO PROVE SUCH MIS- MANAGEMENT AND DIVERSION OF SOCIETY FUNDS. 36. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIR ETY OF FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED VI EW, SCHOLARSHIP PAYMENTS ARE GENUINE PAYMENTS MADE BY T HE ASSESSEE SOCIETY AND THERE IS NO BASIS TO HOLD THAT THE ASSESSEE SOCIETY HAS MISUSED THE SOCIETY FUNDS IN GUISE OF S CHOLARSHIP PAYMENTS. THEREFORE, THE SAID FINDINGS OF THE LD PR CIT CANNOT BE SUSTAINED AND CANNOT BE MADE A BASIS TO HOLD THAT T HE ASSESSEE ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 16 SOCIETY IS NOT CARRYING OUT ITS ACTIVITIES AS PER I TS OBJECTS AND THE EXEMPTION GRANTED UNDER SECTION 12AA SHOULD BE WITH DRAWN. 21. IN LIGHT OF AFORESAID DISCUSSION, THE GROUND OF APPEAL TAKEN BY THE REVENUE FOR EACH OF THE YEARS UNDER CONSIDERATION I S HEREBY DISMISSED. DEPRECIATION ON BUILDING (A.Y 2016-17 & 2017-18) 22. FOR A.Y 2016-17, THE RELEVANT FACTS AND FINDING S OF THE ASSESSING OFFICER ARE CONTAINED AT PARA 8 TO 8.3 OF THE ASSES SMENT ORDER WHICH WE DEEM IT APPROPRIATE TO REPRODUCE AS UNDER:- 8. IT IS TO PERTINENT TO MENTION HERE THAT FROM THE PERUSAL OF THE AUDITED FINAL ACCOUNTS OF THE SOCIETY, IT WAS G ATHERED THAT THE ASSESSEE-SOCIETY HAS PURCHASED LAND OF 10,70,34,538 /- DURING THE F.Y. 2013-14. 8.1 IT WAS OBSERVED THAT THE PAYMENT OF 6,73,70,930 /- WAS MADE BY THE ASSESSEE TO 'RHB' TOWARDS ALLOTMENT OF LAND BY RHB TO M/S ADARSH GYAN VIDYALAYA SAMITI. A COPY OF 'AGREEMENT TO SELL' BETWEEN M/S ADARSH GYAN VIDYALY A SAMITI AND M/S SAINT WILFRED EDUCATION SOCIETY (ASS ESSEE) WAS ALSO SUBMITTED. NO REGISTRY OR TITLE TRANSFER W AS ACTUALLY MADE IN THIS CASE EVEN AFTER LAPSE OF CONSIDERABLE TIME SPAN. IT IS ALSO RELEVANT TO MENTION HERE THAT AS P ER THE CONDITIONS OF ALLOTMENT, THE RAJASTHAN HOUSING BOAR D (RHB) HAS STIPULATED THAT THE SOCIETY TO WHICH LAND HAS B EEN ALLOTTED CANNOT BE TRANSFERRED BY IT TO ANY OTHER P ERSON. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 17 THEREFORE, THE CLAIM OF THE ASSESSEE THAT IT HAS PU RCHASED THE LAND IS PATENTLY FALSE AS IT IS ILLEGAL FOR M/S ADARSH GYAN VIDYALYA SAMITI TO SELL/TRANSFER THE LAND TO THE AS SESSEE- SOCIETY. 8.2 ALSO, THIS IS A CASE OF 'USE OF SOCIETY FUND ' FOR THE BENEFIT OF M/S ADARSH GYAN VIDHALAYA SOCIETY (A RELATED ENTITY U/S 13(3)) WHICH IS IN VIOLATION OF THE PROVISIONS OF SECTION 13(3) OF THE ACT. FURTHER, IT IS AGAINST THE OBJECTS OF THE SOCIETY, AS IT IS DIVERSION OF FUNDS. HENCE, IT IS CLEAR THAT THE ASSESSEE HAS MADE PAYME NT FOR PURCHASE OF LAND BY ITS SISTER CONCERN ADARSH GYAN SOCIETY. THE ASSESSEE HAS ONLY PRESENTED A PURPORTED AGREEMENT T O SALE WHICH IS ILLEGAL. IN THIS CASE, THE ASSESSEE HAS, BY MAKI NG PAYMENT ON BEHALF OF ADARSH GYAN SOCIETY, USED PART OF ITS INC OME FOR THE DIRECT BENEFIT OF ITS SISTER CONCERN ADARSH GYAN SO CIETY AND HAS THEREFORE VIOLATED PROVISIONS OF SECTION 13(1)( C) AND CONSEQUENTLY, SECTION 11 AND 12 WILL NOT BE APPLICA BLE IN THE CASE OF THE ASSESSEE. 8.3 ON THE BASIS OF ABOVE DISCUSSION, EXEMPTION U/S 10(23C)(VI) AND APPROVAL U/S 12AA WAS WITHDRAWN IN THE CASE OF THE ASSESSEE. FROM PERUSAL OF THE STATEMENT S OF ACCOUNTS OF THE ASSESSEE, IT WAS OBSERVED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION AMOUNTING TO 47,10,589/- O N THE BUILDING ON THE SAME LAND. SINCE, THE AGREEMENT TO SALE IS ALREADY ILLEGAL WHICH PROVES THAT THE ASSESSEE HAS NO OWNERSHIP OF THE LAND AND SUBSEQUENTLY NO DEPRECIAT ION CAN ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 18 BE CLAIMED ON BUILDING CONSTRUCTED ON THE LAND IN Q UESTION. THE ASSESSEE IN NO MANNER OR FORM CAN JUSTIFY THE C LAIM OF DEPRECIATION WHEN IT HAS ALREADY VIOLATED PROVISION S OF SEC. 13(1)(C) AND CONSEQUENTLY SECTION 11 & 12 BY ILLEGA LLY TRANSFERRING THE LAND IN ITS BOOKS. THEREFORE, DEPR ECIATION AMOUNT TO 47,10,589/- IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U /S 271(1)(C) ARE INITIATED FOR CONCEALMENT OF INCOME. 23. SIMILARLY FINDINGS HAVE BEEN RECORDED BY THE AS SESSING OFFICER FOR A.Y 2017-18 WHEREBY HE HAS DISALLOWED DEPRECIATION CLAIM OF RS 1,15,17,420/-. ON APPEAL, THE LD. CIT(A) HAS HE LD THAT THE MATTER HAS BEEN EXTENSIVELY EXAMINED BY THE CO-ORDINATE BE NCH AT PARA 37 TO 58 OF ITS ORDER DATED 18.03.2019 AND RELYING ON THE SAME, IT WAS HELD THAT THE BONAFIDE OF PAYMENT MADE TO RHB AND CONSEQ UENT EXPENDITURE ON STRUCTURE THEREOF IS ESTABLISHED BY THE TRIBUNAL S FINDINGS AND CONSIDERING THE SAME, THE CLAIM OF DEPRECIATION CAN NOT BE DENIED TO THE ASSESSEE SOCIETY AND THE ASSESSING OFFICER WAS DIRE CTED TO ALLOW DEPRECIATION CLAIM OF RS. 47,10,589/- AND RS. 1,15, 17,420/- FOR A.Y 2016-17 AND 2017-18 RESPECTIVELY. 24. IN THIS REGARD, THE LD. CIT DR SUBMITTED THAT T HE LD. CIT(A) HAS NOT TAKEN INTO CONSIDERATION THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2014 W.E.F 01.04.2015 BY WAY OF INSERTION OF S UB-SECTION(6) TO SECTION 11 WHICH READS AS UNDER:- (6) IN THIS SECTION WHERE ANY INCOME IS REQUIRED T O BE APPLIED OR ACCUMULATED OR SET APART FOR APPLICATION, THEN, FOR SUCH PURPOSES THE INCOME SHALL BE DETERMINED WITHOUT ANY DEDUCTION ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 19 OR ALLOWANCE BY WAY OF DEPRECIATION OR OTHERWISE IN RESPECT OF ANY ASSET, ACQUISITION OF WHICH HAS BEEN CLAIMED AS AN APPLICATION OF INCOME UNDER THIS SECTION IN THE SAME OR ANY OTH ER PREVIOUS YEAR. 25. IT WAS SUBMITTED BY THE LD CIT DR THAT WHERE TH E ASSESSEE SOCIETY HAS ALREADY CLAIMED AND ALLOWED THE CAPITAL EXPENDITURE ON CONSTRUCTION OF BUILDING AS AN APPLICATION OF INCOM E, THE ASSESSEE SOCIETY CANNOT BE ALLOWED DEPRECIATION CLAIM ON THE SAID BUILDING IN VIEW OF SPECIFIC EMBARGO PLACED BY VIRTUE OF SECTIO N 11(6) OF THE ACT. FURTHER, HE RELIED ON THE FINDINGS OF THE ASSESSING OFFICER. 26. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THERE IS NO DISPUTE THAT THIS AMENDMENT IS APPLICABLE FOR THE TWO YEARS UNDER CONSIDERATION I.E. A.Y 2016-17 AND 2017-18 RESPECTI VELY AND HE HAS NO OBJECTION WHERE THE MATTER IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO CARRY OUT NECESSARY VERIFICATION IN THIS REGARD. FURTHER, RELIANCE WAS PLACED ON HONBLE KERALA HIGH COURT IN CASE OF CIT VS. PARTHAS TRUST [2001] 116 TAXMAN 282 (KERALA), THE H ONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS. GENERAL MARKETING & M FG. CO. LTD., [1989] 86 TAXMAN 488 (CALCUTTA) AND THE HONBLE SUPREME CO URT IN CASE OF CIT VS. PODAR CEMENT (P.) LTD. [1997] 92 TAXMAN 541 (SC) FOR THE LEGAL PROPOSITION THAT THE ASSESSEE WOULD BE ENTITLED TO DEPRECIATION ON BUILDING CONSTRUCTED BY THE ASSESSEE SOCIETY EVEN T HOUGH THE LAND ON WHICH BUILDING IS CONSTRUCTED IS NOT REGISTERED IN THE NAME OF THE ASSESSEE SOCIETY. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 20 27. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSE D THE MATERIAL AVAILABLE ON RECORD. THE CASE OF THE REVENUE IS THA T SINCE THE ASSESSEE SOCIETY HAS NO OWNERSHIP OVER THE LAND, NO DEPRECIA TION CAN BE CLAIMED ON THE BUILDING CONSTRUCTED ON THE SAID LAND. WE N OTE THAT THE COORDINATE BENCH HAS RECORDED A FINDING THAT LAND I S IN EFFECTIVE POSSESSION OF THE ASSESSEE SOCIETY AND BUILDING HAS BEEN CONSTRUCTED THEREON WHERE THE EDUCATIONAL ACTIVITIES HAVE BEEN CARRIED OUT BY THE ASSESSEE SOCIETY. IN OTHER WORDS, THE BUILDING HAS BEEN CONSTRUCTED BY THE ASSESSEE SOCIETY AND USED IN FURTHERANCE OF EDU CATIONAL OBJECTIVES OF THE ASSESSEE SOCIETY, THEREFORE THE TEST OF USAG E HAS BEEN SATISFIED FOR CLAIMING DEPRECIATION. 28. REGARDING THE TEST OF OWNERSHIP, IT IS TRUE THA T AN AGREEMENT TO SELL HAS BEEN ENTERED INTO BY THE ASSESSEE SOCIETY AND A FORMAL SALE DEED HAS NOT ENTERED INTO AND THE SAME IS PENDING A PPROVAL FROM RAJASTHAN HOUSING BOARD AND THE RELEVANT FINDINGS O F THE COORDINATE BENCH AT PARA 51 OF ITS ORDER DATED 18.03.2019 READ S AS UNDER: 51. WE THEREFORE FIND THAT THE ASSESSEE SOCIETY HAS EN TERED INTO AN AGREEMENT TO SELL WITH ADARSH GYAN VIDHALAYA SAMITI WHEREIN THE FORMER HAS AGREED TO PURCHASE AN INSTITUTIONAL PLOT OF LAND WH ICH HAS BEEN ALLOTTED TO THE LATTER VIDE CONVEYANCE CUM PERPETUAL LEASE DEED FOR 99 YEARS BY THE RAJASTHAN HOUSING BOARD. THERE ARE ENABLING PROVISI ONS IN THE CONVEYANCE CUM PERPETUAL LEASE DEED WHICH ALLOWS SUCH TRANSFER SUBJECT TO APPROVAL AND SANCTION OF RAJASTHAN HOUSING BOARD. NECESSARY PERM ISSION HAS BEEN SOUGHT FROM THE RAJASTHAN HOUSING BOARD FOR SUCH TRANSFER IN FAVOUR OF THE ASSESSEE SOCIETY AND THE SAME IS CURRENTLY AWAITED AND ON RE CEIPT THEREOF, FORMAL SALE DEED SHALL BE EXECUTED IN FAVOUR OF THE ASSESSEE SO CIETY. THE ASSESSEE SOCIETY HAS ALREADY PAID SUBSTANTIAL AMOUNT OF RS 6.73 CROR ES, OUT OF TOTAL PURCHASE CONSIDERATION OF RS 7.54 CRORES IN TERMS OF AGREEME NT TO SELL, DIRECTLY TO RAJASTHAN HOUSING BOARD. FURTHER, THE ASSESSEE SOCI ETY IS IN EFFECTIVE POSSESSION OF THE SAID PLOT OF LAND AS IT HAS SINCE BUILT A SCHOOL BUILDING ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 21 THEREON AND CARRYING ON ITS EDUCATIONAL ACTIVITIES AND THE FEES SO RECEIVED HAVE BEEN REFLECTED IN ITS BOOKS OF ACCOUNTS. HOWEVER, THE FACT THAT A FORMAL SALE DEED HAS NOT B EEN EXECUTED IN FAVOUR OF THE ASSESSEE SOCIETY CANNOT BE HELD AS BA SIS FOR DENIAL OF CLAIM OF DEPRECIATION AS HELD IN CASE OF CIT VS PARTHUS TRUST (SUPRA) , WHERE THE HONBLE KERALA HIGH COURT REFERRING THE DECISIONS OF THE HONBLE SUPREME COURT IN CASE OF M YSORE MINERALS LTD REPORTED IN 239 ITR 775 HAS HELD AS UNDER: THE QUESTION OF LAW REFERRED IN THIS CASE IS WHETH ER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WAS THE TRIBUNAL RIGHT I N LAW AND FACT IN HOLDING THAT THE ASSESSEE IS ENTITLED TO DEPRECIATION? THE FACTS ARE AS FOLLOWS : THE ASSESSEE IS A PRIVATE TRUST. WHILE COMPLETING T HE ASSESSMENT, THE ASSESSING OFFICER DISALLOWED THE ASSESSEE'S CLAIM FOR DEPRECI ATION ON CERTAIN BUILDINGS. ACCORDING TO THE ASSESSING OFFICER, THE BUILDINGS H AD NOT BEEN REGISTERED IN THE NAME OF THE ASSESSEE-TRUST. ON APPEAL, THE FIRS T APPELLATE AUTHORITY HELD THAT THE ASSESSEE WAS ENTITLED TO DEPRECIATION ON T HE BUILDINGS AS THEY WERE CONSTRUCTED BY THE TRUST (THOUGH THE LAND ON WHICH THEY STOOD WAS NOT REGISTERED IN THEIR NAME). THE TRIBUNAL HELD THAT E VEN IF THE LAND DOES NOT BELONG TO HIM, THE ASSESSEE WOULD BE ENTITLED TO DE PRECIATION. THE TRIBUNAL ALSO HELD THAT THERE IS NOTHING IN SECTION 32 WHICH BARS SUCH A CLAIM BEING MADE. 2. THE LEARNED COUNSEL FOR THE DEPARTMENT SRI P.K. RA VINDRANATHA MENON BROUGHT TO OUR NOTICE THE FOLLOWING DECISION IN KAL PAKA TRUST HOME (P.) LTD. V. CIT [1988] 172 ITR 364 (KER.) , WHEREIN IT WAS HELD THAT THE DEPRECIATION CANNOT BE CLAIMED BY SOMEONE WITHOUT A NY REAL CONNECTION WITH THE ASSET AND THE CLAIMANT MUST BE ONE WITH MUCH MO RE THAN SOME THREADS OF RIGHTS. DEPRECIATION IS CLAIMABLE ONLY BY THE OWNER WHO USES THE ASSETS IN QUESTION. IN THAT CASE, THIS COURT HELD THAT THE TR IBUNAL WAS JUSTIFIED IN DISALLOWING THE CLAIM OF DEPRECIATION OF THE ASSESS EE IN RESPECT OF ITS BUILDING ON THE GROUND THAT THE ASSESSEE WAS NOT THE OWNER O F THE BUILDING. ANOTHER DECISION CITED WAS IN PARTHAS TRUST V. CIT [1988] 169 ITR 334 1 (KER.) (FB) . THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE A DECISION OF THE SUPREME COURT IN CIT V. PODAR CEMENT (P.) LTD. [1997] 226 ITR 625 2 AND ANOTHER DECISION OF THE SUPREME COURT IN MYSORE MIN ERALS LTD. V. CIT [1999] 239 ITR 775 1 . IN PODAR CEMENT (P.) LTD.'S CASE (SUPRA), THE SUP REME COURT HAS HELD AS FOLLOWS : '. . . THOUGH UNDER THE COMMON LAW 'OWNER' MEANS A PERSON WHO HAS GOT VALID TITLE LEGALLY CONVEYED TO HIM AFTER COMPLYING WITH THE REQUIREMENTS OF LAW SUCH AS THE TRANSFER OF PROPERTY ACT, THE RE GISTRATION ACT, ETC., IN ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 22 THE CONTEXT OF SECTION 22 OF THE INCOME-TAX ACT, 19 61, HAVING REGARD TO THE GROUND REALITIES AND FURTHER HAVING REGARD TO THE O BJECT OF THE INCOME-TAX ACT, NAMELY, TO TAX THE INCOME, 'OWNER' IS A PERSON WHO IS ENTITLED TO RECEIVE INCOME FROM THE PROPERTY IN HIS OWN RIGHT. THE REQUIREMENT OF REGISTRATION OF THE SALE DEED IN THE CONTEXT OF SEC TION 22 IS NOT WARRANTED.' (P. 627) IN MYSORE MINERALS LTD.'S CASE (SUPRA), THE SUPREME COURT WAS CONSIDERING THE DEPRECIATION UNDER SECTION 32 OF THE ACT. THE S UPREME COURT HELD AS FOLLOWS : 'SECTION 32 OF THE INCOME-TAX ACT, 1961, CONFERS A BENEFIT ON THE ASSESSEE. THE PROVISIONS SHOULD BE SO INTERPRETED AND THE WOR DS USED THEREIN SHOULD BE ASSIGNED SUCH MEANING AS WOULD ENABLE THE ASSESSEE TO SECURE THE BENEFIT INTENDED TO BE GIVEN BY THE LEGISLATURE TO THE ASSESSEE. IT IS ALSO WELL-SETTLED THAT WHERE THERE ARE TWO POSSIBLE INTERPRETATIONS OF A TAXING PROVISION, THE ONE WHICH IS FAVOURABLE TO TH E ASSESSEE SHOULD BE PREFERRED. SECTION 32 OF THE ACT ALLOWS CERTAIN DEDUCTIONS, ON E OF THEM BEING DEPRECIATION OF BUILDINGS, ETC., OWNED BY THE ASSES SEE AND USED FOR THE PURPOSES OF THE BUSINESS OR PROFESSION. THE TERMS ' OWN', 'OWNERSHIP' AND 'OWNED' ARE GENERIC AND RELATIVE TERMS. THEY HAVE A WIDE AND ALSO A NARROW CONNOTATION. THE MEANING WOULD DEPEND ON THE CONTEXT IN WHICH THE TERMS ARE USED. CIT V. PODAR CEMENT (P.) LTD. [1997] 226 ITR 625 (SC) , IS A CASE UNDER THE INCOME-TAX ACT AND HAS TO BE TAKEN AS A TREND- SETTER IN THE CONCEPT OF OWNERSHIP. ASSISTANCE FROM THE LAW LAID DOWN THEREIN CAN BE TAKEN FOR FINDING OUT THE MEANING OF THE TERM 'OWNED' AS OCCURRING IN SECTION 32(1) OF THE ACT. THE TERM 'OW NED' AS OCCURRING IN SECTION 32(1) OF THE INCOME-TAX ACT MUST BE ASSIGNE D A WIDER MEANING. ANYONE IN POSSESSION OF PROPERTY IN HIS OWN TITLE E XERCISING SUCH DOMINION OVER THE PROPERTY AS WOULD ENABLE OTHERS B EING EXCLUDED THEREFROM AND HAVING THE RIGHT TO USE AND OCCUPY TH E PROPERTY AND/OR TO ENJOY ITS USUFRUCT IN HIS OWN RIGHT WOULD BE THE OW NER OF THE BUILDING THOUGH A FORMAL DEED OF TITLE MAY NOT HAVE BEEN EXE CUTED AND REGISTERED AS CONTEMPLATED BY THE TRANSFER OF PROPERTY ACT, TH E REGISTRATION ACT, ETC. 'BUILDING OWNED BY THE ASSESSEE', THE EXPRESSION AS OCCURRING IN SECTION 32(1) OF THE INCOME-TAX ACT, MEANS THE PERSON WHO H AVING ACQUIRED POSSESSION OVER THE BUILDING IN HIS OWN RIGHT USES THE SAME FOR THE PURPOSES OF THE BUSINESS OR PROFESSION THOUGH A LEG AL TITLE HAS NOT BEEN CONVJEYED TO HIM CONSISTENTLY WITH THE REQUIREMENTS OF LAWS SUCH AS THE TRANSFER OF PROPERTY ACT AND THE REGISTRATION ACT, ETC. GENERALLY SPEAKING, DEPRECIATION IS AN ALLOWANCE FOR THE DIMI NUTION IN THE VALUE DUE TO WEAR AND TEAR OF A CAPITAL ASSET EMPLOYED BY AN ASSESSEE IN HIS BUSINESS. THE VERY CONCEPT OF DEPRECIATION SUGGESTS THAT THE TAX BENEFIT ON ACCOUNT OF DEPRECIATION LEGITIMATELY BELONGS TO ONE WHO HAS INVESTED IN THE CAPITAL ASSET AND IS UTILISING THE CAPITAL ASSE T AND THEREBY LOSING GRADUALLY THE INVESTMENT CAUSED BY WEAR AND TEAR, A ND WOULD NEED TO REPLACE THE SAME BY HAVING LOST ITS VALUE FULLY OVE R A PERIOD OF TIME. IT IS ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 23 WELL-SETTLED THAT THERE CANNOT BE TWO OWNERS OF THE PROPERTY SIMUNTANEOUSLY AND IN THE SAME SENSE OF THE TERM. T HE INTENTION OF THE LEGISLATURE IN ENACTING SECTION 32 OF THE ACT WOULD BE BEST FULFILLED BY ALLOWING DEDUCTION IN RESPECT OF DEPRECIATION TO TH E PERSON IN WHOM FOR THE TIME-BEING VESTS THE DOMINION OVER THE BUILDING AND WHO IS ENTITLED TO USE IT IN HIS OWN RIGHT AND IS USING THE SAME FOR T HE PURPOSES OF HIS BUSINESS OR PROFESSION. ASSIGNING ANY DIFFERENT MEA NING WOULD NOT SUBSERVE THE LEGISLATIVE INTENT.' (P. 775) IN THIS CASE THERE IS NO DISPUTE THAT THE ASSESSEE HAS PUT UP THE STRUCTURE. IT IS ALSO WELL-KNOWN CONCEPT THAT THE PROPERTY MAY BELON G TO ONE PERSON AND THE STRUCTURE MAY BELONG TO ANOTHER PERSON. IN VIEW OF THE ABOVE FACTS AND IN THE LIGHT OF THE SUPREME COURT DECISIONS, WE ANSWER THE QUESTION IN THE AFFIRMATIVE AND IN FAVOU R OF THE ASSESSEE. 29. FURTHER, THE ASSESSING OFFICER REFERRING TO THE ORDER OF LD. PR. CIT(CENTRAL), JAIPUR HAS HELD THAT THE ASSESSEE SOC IETY HAS VIOLATED PROVISIONS OF SECTION 13(1)(C) IN THIS REGARD AND O N THE BASIS OF SAME, EXEMPTION U/S 10(23C)(VI) AND APPROVAL U/S 12AA WAS WITHDRAWN IN THE CASE OF THE ASSESSEE SOCIETY AND CONSEQUENTLY, SECT ION 11 AND 12 WILL NOT BE APPLICABLE IN THE CASE OF THE ASSESSEE. IN THIS REGARD, WE FIND THAT THE MATTER HAS BEEN EXAMINED AT LENGTH BY THE COORDINATE BENCH WHEREIN IT WAS HELD THAT THE ASSESSEE SOCIETY HAS NOT VIOLATED PROVISIONS OF SECTION 13(1)(C) READ WITH SECTION 13 (3) OF THE ACT AND THE RELEVANT FINDINGS OF THE COORDINATE BENCH READS AS UNDER: 51. WE THEREFORE FIND THAT THE ASSESSEE SOCIETY HAS EN TERED INTO AN AGREEMENT TO SELL WITH ADARSH GYAN VIDHALAYA SAMITI WHEREIN THE FORMER HAS AGREED TO PURCHASE AN INSTITUTIONAL PLOT OF LAND WH ICH HAS BEEN ALLOTTED TO THE LATTER VIDE CONVEYANCE CUM PERPETUAL LEASE DEED FOR 99 YEARS BY THE RAJASTHAN HOUSING BOARD. THERE ARE ENABLING PROVISI ONS IN THE CONVEYANCE CUM PERPETUAL LEASE DEED WHICH ALLOWS SUCH TRANSFER SUBJECT TO APPROVAL AND SANCTION OF RAJASTHAN HOUSING BOARD. NECESSARY PERM ISSION HAS BEEN SOUGHT FROM THE RAJASTHAN HOUSING BOARD FOR SUCH TRANSFER IN FAVOUR OF THE ASSESSEE SOCIETY AND THE SAME IS CURRENTLY AWAITED AND ON RE CEIPT THEREOF, FORMAL SALE DEED SHALL BE EXECUTED IN FAVOUR OF THE ASSESSEE SO CIETY. THE ASSESSEE SOCIETY ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 24 HAS ALREADY PAID SUBSTANTIAL AMOUNT OF RS 6.73 CROR ES, OUT OF TOTAL PURCHASE CONSIDERATION OF RS 7.54 CRORES IN TERMS OF AGREEME NT TO SELL, DIRECTLY TO RAJASTHAN HOUSING BOARD. FURTHER, THE ASSESSEE SOCI ETY IS IN EFFECTIVE POSSESSION OF THE SAID PLOT OF LAND AS IT HAS SINCE BUILT A SCHOOL BUILDING THEREON AND CARRYING ON ITS EDUCATIONAL ACTIVITIES AND THE FEES SO RECEIVED HAVE BEEN REFLECTED IN ITS BOOKS OF ACCOUNTS. 52. IN LIGHT OF ABOVE FACTUAL MATRIX, AS FAR AS PROXIM ATE AND IMMEDIATE BENEFIT OF SUCH PAYMENT OF RS 6.73 CRORES IS CONCER NED, IT IS THE ASSESSEE SOCIETY WHICH IS BENEFITTED WHEREBY IT HAS BUILT A SCHOOL BUILDING WHEREIN IT IS CARRYING ON ITS EDUCATIONAL ACTIVITIES. AT THE SAME TIME, IT CANNOT BE RULED OUT THAT ADARSH GYAN VIDHALAYA SAMITI IS NOT BENEFITTED BY SUCH PAYMENT BY THE ASSESSEE SOCIETY ON ITS BEHALF TO RAJASTHAN HOUSING BOARD. HAD THE ASSESSEE SOCIETY NOT STEPPED-IN AND MADE THE PAYMENT TO RAJA STHAN HOUSING BOARD, ADARSH GYAN VIDHALAYA SAMITI WAS LIKELY TO DEFAULT ON ITS PAYMENTS AS PER STIPULATED TIME FRAME AND IN ALL LIKELIHOOD, THE AL LOTMENT OF THE PLOT OF LAND WOULD HAVE GOT TERMINATED. THEREFORE, TILL THE TIME THE APPROVAL OF RAJASTHAN HOUSING BOARD IS NOT RECEIVED FOR TRANSFER IN FAVOU R OF THE ASSESSEE SOCIETY, THE PLOT OF LAND STAND IN NAME OF THE ADARSH GYAN V IDHALAYA SAMITI AND CONVEYANCE DEED HAS NOT BEEN EXECUTED IN FAVOUR OF THE ASSESSEE SOCIETY. AT THE SAME TIME, SUCH RIGHT OVER THE LAND IS NOT AN A BSOLUTE RIGHT AS THE SAME IS SUBJECT TO THE TERMS OF 'AGREEMENT TO SELL' ENTERED INTO WITH THE ASSESSEE SOCIETY AND AT LEAST TO THE EXTENT OF PAYMENT MADE BY THE ASSESSEE SOCIETY TO THE TUNE OF RS 6.73 CRORES, THE LATTER CAN ENFORCE ITS RIGHT OVER SUCH LAND IN PRIORITY TO ANY THIRD PARTY. 53. HAVING SAID THAT, THE QUESTION THAT ARISES FOR CON SIDERATION IS WHETHER BY ENTERING INTO THE SUBJECT TRANSACTION, THE ASSESSEE SOCIETY HAS VIOLATED THE PROVISIONS OF SECTION 13(1)(C) READ WITH SECTION 13 (3) OF THE ACT AS INVOKED BY THE LD PR.CIT. 54. AS PER LD PR. CIT, ADARSH GYAN VIDYALYA SOCIETY AN D THE ASSESSEE SOCIETY HAVE THREE COMMON MEMBERS/TRUSTEES AND THEREFORE, M /S ADARSH GYAN VIDYALYA SOCIETY IS A RELATED ENTITY WITHIN THE MEA NING OF SECTION 13(3) OF THE ACT AND SOCIETY FUNDS HAVE BEEN USED FOR THE BENEFI T OF ADARSH GYAN VIDHALAYA SOCIETY IN VIOLATION OF THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT. THE ARGUMENT OF THE ASSESSEE SOCIETY IS THAT NO EVI DENCE HAS BEEN PLACED ON RECORD BY THE REVENUE WITH REGARD TO ANY DIRECT OR INDIRECT BENEFIT FLOWING TO THE TRUSTEES/MEMBERS OF THE SOCIETY WHICH MIGHT BRI NG IT WITHIN THE AMBIT OF SECTION 13(1) R.W.S.13(3) OF THE ACT AND FURTHER, T HE MATTER DOES NOT FALL WITHIN ANY OF THE CLAUSES OR SUB-CLAUSES OF SECTION 13(3) OF THE ACT. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 25 55. IN ORDER TO APPRECIATE THE RIVAL CONTENTIONS, WE A GAIN REFER TO THE PROVISIONS OF SECTION 13(3) OF THE ACT. THE CLAUSES FROM (A) TO (CC) OF SECTION 13(3) ARE NOT APPLICABLE IN THE INSTANT CASE AS THE RE IS NOTHING ON RECORD THAT SUGGEST THAT THE COMMON MEMBERS HAVE BEEN BENEFITTE D IN THEIR INDIVIDUAL AND IN THEIR OWN RIGHT BY SUCH TRANSACTION. THE CLA USE (D) TALKS ABOUT ANY RELATIVE OF ANY SUCH AUTHOR, FOUNDER, PERSON, MEMBE R, TRUSTEE OR MANAGER OF THE ASSESSEE SOCIETY WHICH IS ALSO NOT A CASE BEFOR E US. THE CLAUSE (E) TALKS ABOUT ANY CONCERN IN WHICH ANY OF THE PERSONS REFER RED TO IN CLAUSES (A), (B), (C), (CC) AND (D) HAS A SUBSTANTIAL INTEREST. IF WE WERE TO READ THE SAID CLAUSE (E) IN THE CONTEXT OF PRESENT FACTS, IT MEANS ADARS H GYAN VIDYALYA SOCIETY, BEING A CONCERN IN WHICH MEMBERS/TRUSTEES OF THE AS SESSEE SOCIETY HAVE A SUBSTANTIAL INTEREST. THE TERM 'SUBSTANTIAL INTEREST IN A CONCERN' HAS BEEN DEFINED IN EXPLANATION 3 TO MEAN 56. THAT IS, MEMBERS AND TRUSTEES OF THE ASSESSEE SOCI ETY EITHER INDIVIDUALLY OR COLLECTIVELY ARE ENTITLED AT ANY TIME DURING THE PREVIOUS YEAR, TO NOT LESS THAN TWENTY PER CENT OF THE PROFITS OF SUCH CONCERN I.E, ADARSH GYAN VIDYALYA SOCIETY. IN THE PRESENT CASE, THE CASE OF THE REVEN UE IS THAT THERE ARE THREE COMMON MEMBERS/TRUSTEES IN BOTH THE SOCIETIES AND T HEREFORE, THESE ARE RELATED ENTITIES AND ARE COVERED BY PROVISIONS OF S ECTION 13(3) OF THE ACT. ON PERUSAL OF RECORDS, WE FIND THAT THERE ARE FIFTEEN MEMBERS IN THE EXECUTIVE COMMITTEE OF SAINT WILFRED EDUCATION SOCIETY AND EQ UALLY NUMBER OF MEMBERS IN THE EXECUTIVE COMMITTEE OF ADARSH GYAN VIDYALYA SOCIETY. THE PRESIDENT OF THE ASSESSEE SOCIETY IS HOLDING THE POST OF SECRETA RY IN ADARSH GYAN VIDYALYA SOCIETY. FURTHER, TWO MEMBERS WHO ARE EDUCATIONIST AND DOCTOR BY PROFESSION ARE COMMON IN BOTH THE SOCIETIES. HOWEVER, MERELY H AVING COMMON MEMBERS IN BOTH THE SOCIETIES ARE NOT SUFFICIENT TO HOLD TH E SOCIETIES AS RELATED ENTITIES WITHIN THE MEANING OF SECTION 13(3) OF THE ACT. WHA T HAS TO BE PROVED IS THAT THESE COMMON MEMBERS HOLD SUBSTANTIAL INTEREST IN T HE RELATED ENTITY IN THEIR OWN RIGHT EITHER INDIVIDUALLY OR COLLECTIVELY AND T HAT TOO, BY ENTITLEMENT TO NOT LESS THAN 20% OF PROFITS IN SUCH RELATED ENTITY. HO WEVER, THERE IS NOTHING ON RECORD EITHER IN THE IMPUGNED ORDER OF THE LD PR.CI T OR BROUGHT TO OUR NOTICE DURING THE COURSE OF HEARING BY THE LD CIT DR THAT THESE COMMON MEMBERS ARE ENTITLEMENT TO ANY PROFITS AND THAT TOO, EXCEED ING THE PRESCRIBED THRESHOLD IN ADARSH GYAN VIDYALYA SOCIETY. PER CONT RA, THE LD AR SUBMITTED THAT ADARSH GYAN VIDYALYA SOCIETY IS AN OLD SOCIETY REGISTERED UNDER THE RAJASTHAN SOCIETIES REGISTRATION ACT IN YEAR 1961-6 2 VIDE REGISTRATION NO. 03/1961-62 AND BY VIRTUE OF BEING A REGISTERED SOCI ETY, IT CANNOT TRANSFER ANY SURPLUS TO ITS MEMBERS AND SUCH SURPLUS, IF ANY HAS TO BE DEPLOYED IN THE SOCIETY AND EVEN IN THE EVENT OF WINDING UP, THE AS SETS AND FUNDS OF THE ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 26 SOCIETY HAVE TO BE TRANSFERRED TO ANY OTHER REGISTE RED SOCIETY WITH SIMILAR OBJECTS. IN LIGHT OF THE SAME, WE DON'T FIND ANY LE GAL BASIS TO HOLD THAT ADARSH GYAN VIDYALYA SOCIETY IS A RELATED ENTITY WITHIN TH E MEANING OF SECTION 13(3) OF THE ACT. IN ABSENCE THEREOF, EVEN WHERE IT IS HE LD THAT SOME BENEFIT HAS FLOWN TO ADARSH GYAN VIDYALYA SOCIETY, THE PROVISIO NS OF SECTION 13(1)(C) ARE NOT ATTRACTED IN THE INSTANT CASE. 57. FURTHER, WE NOTE THAT THE LD PR.CIT HAS RAISED AN APPREHENSION AT THE TIME OF ISSUANCE OF SHOW-CAUSE THAT THE PAYMENT TO RAJAS THAN HOUSING BOARD ON BEHALF OF ADARSH GYAN VIDYALYA SOCIETY IS NEITHER A LOAN NOR A DONATION BUT APPEARS TO BE AN INVESTMENT NOT ALLOWABLE U/S 11(5) OF THE ACT AND THEREAFTER, TOWARDS THE END OF HIS ORDER WHILE GIVI NG HIS CONCLUDING FINDINGS HAS HELD THAT THE PAYMENT MADE IS IN CONTRAVENTION OF SECTION 11(5) R/W SECTION 13(1)(C) OF THE ACT. HOWEVER, HOW THE PAYME NT IS IN CONTRAVENTION OF SECTION 11(5) HAS NOT BEEN SPELT OUT IN HIS ORDER. IF WE LOOK AT THE PROVISIONS OF SECTION 11(5), IN CLAUSE (X), IT PROVIDES FOR INVES TMENT IN IMMOVEABLE PROPERTY AS ONE OF THE PERMISSIBLE MODE OF INVESTMENT OF AMO UNT OF INCOME WHICH IS ACCUMULATED OR SET-APART FOR BEING NOT INCLUDED IN THE TOTAL INCOME OF THE PERSON IN RECEIPT OF INCOME. IN THE INSTANT CASE, T HE ASSESSEE SOCIETY HAVING ENTERED INTO AN AGREEMENT TO SELL WITH ADARSH GYAN VIDYALYA SOCIETY AND HAVING PAID A SUBSTANTIAL AMOUNT IN CONSIDERATION F OR PURCHASE OF LAND AND IN POSSESSION OF THE SAID LAND HAS CLEARLY MADE AN INV ESTMENT IN AN IMMOVEABLE PROPERTY THOUGH THE SAME IS SUBJECT TO APPROVAL OF RAJASTHAN HOUSING BOARD AND SIGNING OF THE FINAL CONVEYANCE DEED. ACCORDING LY, IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRETY OF FACTS AND CIRCUM STANCES OF THE CASE, THE PAYMENT TO RAJASTHAN HOUSING BOARD IS NOT IN CONTRA VENTION OF SECTION 11(5) R/W SECTION 13(1)(C) OF THE ACT. THEREFORE, THE FIN DINGS OF THE LD PR CIT CANNOT BE SUSTAINED AND CANNOT BE MADE A BASIS TO HOLD THA T THE ASSESSEE SOCIETY IS NOT CARRYING OUT ITS ACTIVITIES AS PER ITS OBJECTS AND THE EXEMPTION GRANTED UNDER SECTION 12AA SHOULD BE WITHDRAWN. 58. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE FINDINGS OF THE LD PR.CIT RELATING TO DIVERSION OF FUND OF THE ASSESSEE SOCIETY FOR PERSONAL PURPOSES, NON- GENUIN E SCHOLARSHIP EXPENSES AND PAYMENTS MADE TO RAJASTHAN HOUSING BOARD IN CON TRAVENTION OF SECTION 11(5) READ WITH SECTION 13(1)(C) OF THE ACT CANNOT BE SUSTAINED. THESE ARE MERELY APPREHENSION WHICH HAVE BEEN RAISED BY THE L D. PR. CIT AND THERE IS NO CREDIBLE EVIDENCE ON RECORD WHICH CAN CONCLUSIVELY DEMONSTRATE THAT THE ASSESSEE IS NOT WORKING AS PER THE OBJECTS FOR WHIC H REGISTRATION WAS INITIALLY GRANTED, THAT THE ACTIVITIES OF THE ASSESSEE'S SOCI ETY ARE NOT GENUINE OR ANY ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 27 PERSONAL BENEFIT HAS BEEN DERIVED BY ANY PERSON SO DEFINED U/S 13(3) OF THE ACT. THE CASE OF THE ASSESSEE THEREFORE DOESN'T FAL LS U/S 12AA(3) AND 12AA(4) OF THE ACT. IN LIGHT OF OUR DETAILS DISCUSSION AND FINDINGS, THE REGISTRATION OF THE ASSESSEE SOCIETY U/S 12AA IS HEREBY DIRECTED TO BE RESTORED FROM THE DATE THE SAME WAS WITHDRAWN AND CANCELLED BY THE LD. PR. CIT IN TERMS OF THE IMPUGNED ORDER. 30. FURTHER, LD CIT DR HAS SUBMITTED DURING THE COU RSE OF HEARING THAT WHERE THE ASSESSEE SOCIETY HAS ALREADY CLAIMED AND ALLOWED THE CAPITAL EXPENDITURE ON CONSTRUCTION OF BUILDING AS AN APPLICATION OF INCOME, THE ASSESSEE SOCIETY CANNOT BE ALLOWED DEPR ECIATION CLAIM ON THE SAID BUILDING IN VIEW OF SPECIFIC EMBARGO PLACE D BY VIRTUE OF SECTION 11(6) OF THE ACT. THERE IS NO DISPUTE THAT THESE PR OVISIONS INTRODUCED BY THE FINANCE, ACT 2014 ARE APPLICABLE FOR BOTH THE Y EARS UNDER CONSIDERATION. THEREFORE, IT IS A MATTER OF RECORD AND IT CAN BE EXAMINED BY THE ASSESSING OFFICER AS TO WHETHER THE CAPITAL EXPENDITURE SO INCURRED BY ASSESSEE SOCIETY HAS BEEN CLAIMED AS AN APPLICATION OF INCOME IN ANY OF THE YEARS UNDER CONSIDERATION OR I N THE EARLIER YEARS. THEREFORE, FOR THIS LIMITED PURPOSE, THE MATTER IS SET-ASIDE TO THE FILE OF THE ASSESSING OFFICER AND THE GROUND OF APPEAL SO T AKEN BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ADDITION OF UNEXPLAINED CASH U/S 69A (A.Y 2017-18) 31. BRIEFLY, THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH OPERATIONS CONDUCTED AT THE PREMISES OF INTEGRAL UR BAN CO-OPERATIVE BANK LIMITED, CASH AMOUNTING TO RS 1,56,59,000 HAS BEEN FOUND IN POSSESSION OF THE BANK. THE AO HAS TREATED THE SAI D CASH AS UNEXPLAINED MONEY IN HANDS OF THE ASSESSEE SOCIETY FOR REASON THAT ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 28 THE SAME WAS NOT RECORDED IN THE BOOKS OF INTEGRAL BANK NOR ENTERED IN THE CASH BOOKS OF ACCOUNTS OF THE ASSESSEE SOCIETY AND TRANSFERRED DIRECTLY TO THE BANK, THAT THE FEE WAS COLLECTED FR OM STUDENTS IN OLD DENOMINATION ILLEGALLY WITH AN OBJECTIVE OF CONVERT ING IN NEW DENOMINATION NOTES AND THAT THAT THERE WAS CERTAIN DISCREPANCY IN INVENTORY OF OLD & NEW DENOMINATION NOTES. ACCORDIN GLY, ADDITION OF RS 1,56,59,500 WAS MADE AS UNEXPLAINED MONEY U/S 69 A OF THE ACT. 32. ON APPEAL, THE LD CIT(A) HELD THAT THE ISSUE OF CASH FOUND AT THE PREMISES OF URBAN CO-OPERATIVE BANK WAS DULY EXAMIN ED BY THE TRIBUNAL AS THE SAME WAS ONE OF THE REASONS FOR WIT HDRAWAL OF APPROVAL U/S 10(23C)(VI) AND SECTION 12AA OF THE AC T AND REFERRED TO THE RELEVANT FINDINGS OF THE TRIBUNAL WHICH ARE CON TAINED IN PARA 18- 23 WHICH READS AS UNDER: '18. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PURSUED THE MATERIAL AVAILABLE ON THE RECORD. DURIN G THE COURSE OF SEARCH OPERATIONS CONDUCTED AT THE PREMISES OF I NTEGRAL URBAN CO-OPERATIVE BANK LIMITED, CASH AMOUNTING TO RS 1,5 6,59,000 HAS BEEN FOUND IN POSSESSION OF THE BANK AT ITS CLE ARING HOUSE ROOM. THE STATEMENT OF GENERAL MANAGER OF THE BANK, SHRI HARISH GUPTA WAS RECORDED U/S 131 ON 9.12.2016. IN RESPONS E TO QUESTION NO. 30, HE HAS STATED THAT THE SAID AMOUNT OF RS 1,56,59,000 HAS BEEN RECEIVED DURING LAST 4-5 DAYS TILL 8.12.2016. IN RESPONSE TO QUESTION NO. 34 WHERE HE WAS ASKED A S TO WHO HAS SENT THE SAID AMOUNT OF RS 1,56,59,000 TO THE B ANK, HE HAS STATED THAT THE SAID AMOUNT IS THE FEES COLLECTION OF SAINT WILFRED COLLEGE AND HAS BEEN SENT BY SHRI KESHAV BADAYA. IN RESPONSE TO QUESTION NO. 41, HE HAS STATED THAT THE SAID AMOUNT HAS BEEN ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 29 KEPT IN THE CUSTODY OF BRANCH MANAGER, SHRI DILIP M AHESWARI AND CASHIER, SHRI VIKRAM SINGH SHEKAWAT. THE STATEMENT OF SHRI VIKRAM SINGH SHEKAWAT WAS ALSO RECORDED U/S 131 ON 10.12.2016 AND HE HAS ALSO BEEN ASKED SPECIFIC QUESTIONS REGAR DING THE SOURCE OF SAID AMOUNT OF RS 1,56,59,000. IN RESPONS E TO QUESTION NO. 13, HE HAS STATED THAT THE SAID AMOUNT HAS BEEN RECEIVED IN 2-4 TIMES IN THE FIRST WEEK OF DECEMBER 2016. IN RE SPONSE TO QUESTION NO. 14 ; HE HAS STATED THAT THE SAID AMOUNT HAS BEEN RECEIVED FROM SAINT WILFRED COLLEGE, MANSAROVAR. TH EREFORE, WE FIND THAT THERE IS A CONSISTENCY IN THE STATEMENT O F BANK'S EMPLOYEES WHEREIN THEY HAVE CONFIRMED THAT THE SOUR CE OF CASH OF RS 1,56,59,000 FOUND IN POSSESSION OF THE BANK A T ITS PREMISES IS THE AMOUNT OF FEES COLLECTION OF SAINT WILFRED C OLLEGE, MANSAROVAR. NOW, COMING TO THE STATEMENT OF ACCOUNT ANT OF THE ASSESSEE SOCIETY, MR. GANESH NARAYAN GUPTA RECORDED U/S 131 OF THE ACT ON 9.12.2016. IN RESPONSE TO QUESTION NO. 8 , HE HAS STATED THAT SAINT WILFRED COLLEGE HAS ONLY ONE BANK ACCOUNT IN FORM OF CURRENT ACCOUNT MAINTAINED WITH MANSAROVAR BRANCH OF INTEGRAL URBAN CO-OPERATIVE BANK LIMITED. IN RESPON SE TO QUESTION NO. 11, HE HAS STATED THAT APPROX. RS 2 CR ORE FEES HAVE BEEN COLLECTED IN CASH DURING THE PERIOD 1.12.2016 TO 9.12.2016. FURTHER, THE TAX AUTHORITIES DURING THE COURSE OF S URVEY HAVE GONE THROUGH THE RECEIPT VOUCHERS ISSUED BY THE SAI NT WILFRED COLLEGE TO ITS STUDENTS TOWARDS RECEIPTS OF FEES AN D OTHER CHARGES COLLECTED FROM STUDENTS AS IS EVIDENT FROM QUESTION NO. 13 RAISED BY THE SURVEY TEAM TO GANESH NARAYAN GUPTA WHEREIN THERE IS REFERENCE TO VOUCHERS AND RECEIPTS AS PER WHICH FEE S AND OTHER RELATED CHARGES HAVE BEEN COLLECTED IN CASH AMOUNTI NG TO RS 2.15 ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 30 CRORES FROM THE STUDENTS. FURTHER, WE REFER TO THE STATEMENT OF SHRI MAHAVIR PRASAD, ANOTHER ACCOUNTANT OF THE ASSE SSEE SOCIETY WHOSE STATEMENT WAS RECORDED U/S 131 ON 9.12.2016. IN RESPONSE TO QUESTION NO. 19, HE HAS STATED THAT THE Y ISSUE RECEIPT TO THE STUDENTS AGAINST DEPOSIT OF THEIR FEES AND S UBSEQUENTLY IN RESPONSE TO QUESTION NO. 51, HE HAS AGAIN CONFIRMED THAT STUDENTS HAVE BEEN GIVEN RECEIPT AGAINST DEPOSIT OF THEIR FEES AND THE SAME IS RECORDED IN THE COMPUTERS. FURTHER, IN RESPONSE TO QUESTION NO. 9 WHEREIN HE WAS ASKED THE STATUS OF C ASH IN HAND, HE HAS STATED THAT THEY PREPARE A DAILY COLLECTION SHEET AND BASED ON THE SAME, THE DAILY COLLECTION IS DEPOSITED IN T HE BANK. FURTHER, HE HAS STATED THAT THEY UPDATE THE BOOKS L ATER AS AND WHEN THEY GET TIME. IN RESPONSE TO QUESTION NO. 10, HE HAS FURTHER STATED THAT BOOKS HAVE BEEN UPDATED TILL 30 .11.2016 AND FOR THE REMAINING DAYS, VOUCHERS HAVE BEEN PREPARED BUT THEY COULDN'T DO THE ENTRY. IF WE CORRELATE THE SAID STA TEMENTS OF ACCOUNTANTS OF THE ASSESSEE SOCIETY WITH THE STATEM ENTS OF THE BANK'S EMPLOYEES, WE FIND THAT THE SAID STATEMENTS CORROBORATES THE FACT THAT THE SOURCE OF CASH FOUND IN THE POSSE SSION OF THE BANK IS THE FEES COLLECTED FROM STUDENTS BY SAINT W ILFRED COLLEGE. IT IS ALSO CLEAR ON CLOSE EXAMINATION OF THESE STAT EMENTS THAT THE FEE RECEIPTS ARE ISSUED TO THE STUDENTS AT THE TIME OF RECEIVING THE FEES FROM THEM, THESE RECEIPTS ARE UPDATED IN THE I NDIVIDUAL STUDENT REGISTER MAINTAINED ONLINE IN THE COMPUTER SYSTEM, DAILY CASH COLLECTION SUMMARIES AND RELATES VOUCHERS ARE PREPARED. THE SAID FEE RECEIPTS AND VOUCHERS WERE AVAILABLE O N RECORD AT THE TIME OF SURVEY AND HAS IN FACT BEEN EXAMINED BY THE SURVEY TEAM AND ARE VERY MUCH PART OF BOOKS OF ACCOUNTS MA INTAINED BY ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 31 THE ASSESSEE SOCIETY IN REGULAR COURSE OF ITS ACTIV ITIES. THEREFORE, ONCE THE SOURCE OF CASH HAS BEEN ESTABLISHED TO BE FEES COLLECTED FROM THE STUDENTS, SUCH FEES HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNTS AND THE CASH HAS BEEN PHYSICALLY FOUND IN POSSESSION OF THE ASSESSEE'S BANK, THERE IS NO BASIS TO HOLD THAT THERE IS ANY DIVERSION OF FINDS OF THE ASSESSEE SOCIETY. IN FACT , THE ID PR CIT HAS ALSO NOT RECORDED ANY CATEGORICAL FINDING THAT FUNDS OF THE ASSESSEE SOCIETY HAVE ACTUALLY BEEN DIVERTED, RATHE R HE HAS ONLY CAST SUSPICION REGARDING INTENDED APPLICATION AND D IVERSION OF FUNDS BY THE ASSESSEE SOCIETY FOR THE PERSONAL BENE FIT OF THE BADAYA FAMILY. THE BASIS OF SUCH SUSPICION, AS WE H AVE NOTED FROM HIS FINDINGS IS THE NON-RECORDING OF FEE RECEI PTS IN THE BOOKS MAINTAINED BY THE ASSESSEE SOCIETY AS FOUND AT THE TIME OF SURVEY ON 9.12.2016 AND THE INVOLVEMENT OF SHRI KESHAV BAD AYA IN THE FUNCTIONING OF THE ASSESSEE SOCIETY AND THE BANK. I N ORDINARY COURSE WHERE THERE IS MOVEMENT OF CASH, ONCE THE CA SH IS DEPOSITED IN THE BANK ACCOUNT, NECESSARY ENTRIES AR E MADE IN THE CASH BOOK. IN THE INSTANT CASE, THERE SEEMS TO BE C ERTAIN SLIPPAGES ON PART OF THE ASSESSEE SOCIETY IN TERMS OF NOT UPDATING ITS CASH BOOK WHEN THE CASH WAS RECEIVED AND SENT F OR DEPOSIT IN ITS BANK ACCOUNT AND AT THE TIME OF SURVEY, IT WAS NOT UPDATED. AT THE SAME TIME, AS WE HAVE NOTED ABOVE, THE FACT OF THE MATTER IS THAT FEE RECEIVED FROM THE STUDENTS IS RECORDED IN THE BOOKS OF ACCOUNTS AS CORROBORATED BY FEE RECEIPTS, INDIVIDUA L STUDENT REGISTER MAINTAINED ONLINE IN THE COMPUTER SYSTEM, DAILY CASH COLLECTION SUMMARIES AND RELATES VOUCHERS. THESE DO CUMENTS ORE WRITTEN/PRINTED DOCUMENTS AVAILABLE ON RECORD AND A RE VERY MUCH PART OF BOOKS OF ACCOUNTS MAINTAINED IN THE REGULAR COURSE AND ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 32 CLEARLY FALL IN THE INCLUSIVE DEFINITION OF BOOKS O F ACCOUNTS SO DEFINED U/S 2(12A) OF THE ACT. SUCH FEE RECEIPTS AN D RELATED VOUCHERS HAVE BEEN EXAMINED BY THE SURVEY TEAM AT T HE TIME OF SURVEY AS EVIDENT FROM THE QUESTION NO. 13 RAISED T O GANESH KUMAR GUPTA, THE ACCOUNTANT OF THE ASSESSEE SOCIETY WHERE THE TAX OFFICIAL HAS ASKED A QUESTION THAT BASED ON PER USAL OF VOUCHERS, IT IS APPARENT THAT AFTER 21.11.2016, FEE S AND OTHER RELATED CHARGES HAVE BEEN COLLECTED IN CASH AMOUNTI NG TO RS 2.15 CRORES. THEREFORE, WE FIND THAT THOUGH THE CASH BOO K HAS NOT BE UPDATED AT THE TIME OF SURVEY IN TERMS OF RECORDING THE MOVEMENT OF CASH FOR DEPOSIT IN ITS BANK ACCOUNT, C ASH INWARD IN FORM OF FEES COLLECTED FROM THE STUDENTS HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS AS DEMONSTRATED BY FEE REC EIPTS, INDIVIDUAL STUDENT REGISTER, DAILY CASH COLLECTION SHEETS AND RELATED VOUCHERS PREPARED BY THE ASSESSEE SOCIETY. WE THEREFORE FIND THAT THERE WAS SUSPICION IN THE MIND OF AUTHOR ITIES THAT ASSESSEE'S FUNDS HAVE BEEN DIVERTED AS THE CASH BOO K DOESN'T REFLECT ANY OUTWARD MOVEMENT OF CASH. FURTHER, EVEN THE BANK HAS NOT RECORDED SUCH FUNDS AND THERE ARE ALLEGATIO NS REGARDING EXCHANGE OF OLD CURRENCY NOTES WITH NEW NOTES. TO O UR MIND, ONCE THE CASH IS FOUND IN POSSESSION OF THE BANK WH ERE THE ASSESSEE MAINTAINS ITS BANK ACCOUNT AND IT IS CONFI RMED BY THE BANK OFFICIALS THAT THE CASH SO FOUND BELONG TO THE ASSESSEE SOCIETY, THERE IS NO BASIS TO HOLD ANTO SUCH SUSPIC ION AS FAR AS THE ASSESSEE SOCIETY IS CONCERNED. 19. NOW, IN TERMS OF INVOLVEMENT OF SHRI KESHAV BAD AYA AND INTENDED BENEFIT OF SUCH FUNDS SO FOUND IN THE POSS ESSION OF THE ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 33 BANK FOR THE PERSONAL BENEFIT OF THE BADAYA FAMILY, THE ID AR DRAWN OUR REFERENCE, DURING THE COURSE OF HEARING, AT THE CONSTITUTION OF THE EXECUTIVE COMMITTEE OF SAINT WI LFRED EDUCATION SOCIETY WHERE WE FIND THAT SHRI KESHAV BADAYA HOLDS THE POST OF THE SECRETARY AND HIS UNCLE, SHRI SURESH KUMAR IS T HE PRESIDENT OF THE SOCIETY. FURTHER, OUR REFERENCE WAS DRAWN TO TH E LIST OF BOARD OF DIRECTORS OF THE INTEGRATED URBAN CO-OPERATIVE B ANK LTD AND WE FIND THAT NONE OF THESE TWO PERSONS OR ANY OTHER BA DAYA FAMILY MEMBER IS HOLDING THE POST OF DIRECTORS. FURTHER, T HE ID AR HAS STATED AT THE BAR THAT NEITHER SHRI KESHAV BADAYA N OR ANY OTHER MEMBERS OF THE BADAYA FAMILY HOLD ANY STAKE OR FINA NCIAL INTEREST/SHAREHOLDING IN INTEGRATED URBAN CO-OPERAT IVE BANK LTD. THEREFORE, THE ONLY COMMON LINKAGE BETWEEN THE TWO ENTITIES IS THE INVOLVEMENT OF SHRI KESHAV BADAYA WHO IS HOLDIN G THE POST OF SECRETARY IN THE ASSESSEE SOCIETY AND ALSO HOLDING THE POST OF CHIEF EXECUTIVE OFFICER IN THE INTEGRATED URBAN CO-OPERAT IVE BANK LTD. FROM WHERE HE IS GROWING HIS REMUNERATION AND THE Q UESTION IS WHETHER THE PROVISIONS OF SECTION 13(3) ARE ATTRACT ED IN THE INSTANT CASE. IN THIS REGARD, WE REFER TO THE PROVISIONS OF SECTION 13(3) WHICH READS AS UNDER: ***** NOT REPRODUCED FOR THE SAKE OF BREVITY*** 21. THAT IS, MEMBERS AND TRUSTEES OF THE ASSESSEE S OCIETY EITHER INDIVIDUALLY OR COLLECTIVELY ARE ENTITLED AT ANY TI ME DURING THE PREVIOUS YEAR, TO NOT LESS THAN TWENTY PER CENT OF THE PROFITS OF SUCH CONCERN I.E, INTEGRAL URBAN CO-OPERATIVE BANK. IN T HE PRESENT CASE, THE SAID CONDITION IS NOT SATISFIED AS NONE OF THE MEMBERS AND TRUSTEES OF THE ASSESSEE SOCIETY INCLUDING THAT OF BADAYA FAMILY ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 34 HOLDS ANY FINANCIAL INTEREST IN THE INTEGRAL URBAN COOPERATIVE BANK. MERELY ON ACCOUNT OF SHRI KESHAV BADAYA, BEING THE CHIEF EXECUTIVE OFFICER OF THE INTEGRAL URBAN CO-OPERATIVE BANK AND ALSO HOLDING THE POST OF THE SECRETARY TO THE ASSESSEE SOCIETY, IN O UR VIEW, WILL NOT MAKE THE INTEGRAL URBAN CO-OPERATIVE BANK AND THE A SSESSEE SOCIETY AS RELATED ENTITY IN TERMS OF SECTION 13(3) OF THE ACT. 22. NOW, IN ORDER TO INVOKE THE PROVISIONS OF SECTI ON 13(1)(C) OF THE ACT, THE QUESTION THAT ARISE FOR CONSIDERATI ON IS WHETHER SHRI KESHAV BADAYA, BEING A RELATED PERSON IN RELATION T O THE ASSESSEE SOCIETY HAS ACTUALLY BENEFITED DIRECTLY OR INDIRECT LY BY VIRTUE OF CASH BELONGING TO THE ASSESSEE SOCIETY FOUND IN THE POSS ESSION OF THE INTEGRAL URBAN CO-OPERATIVE BANK WHERE HE HOLD THE POSITION OF CHIEF EXECUTIVE OFFICER. THE PROVISIONS OF SECTION 13(1)(C) STATES THAT IF ANY PART OF THE INCOME DURING THE PREVIOUS YEAR USED OR APPLIED DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF A NY PERSON REFERRED TO SUB-SECTION (3) TO SECTION 13 OF THE ACT. IT THU S TALKS ABOUT THE USAGE OR APPLICATION I.E, THERE HAS TO BE ACTUAL UT ILIZATION OR APPLICATION OF FUNDS FOR THE BENEFIT OF THE RELATED PERSON. IT DOESN'T CONTEMPLATE A SITUATION OF INTENDED OR FUTURE APPLI CATION OF SUCH FUNDS FOR THE BENEFIT OF SUCH PERSON. IN THE INSTAN T CASE, FIRSTLY THE FUNDS BELONGING TO THE ASSESSEE SOCIETY HAVE BEEN P HYSICALLY FOUND IN THE POSSESSION OF THE BANK AT ITS STRONG ROOM AN D NOT IN POSSESSION OF SHRI KESHAV BADAYA. SECONDLY, SUCH FU NDS HAVE NOT BEEN USED OR APPLIED AND HAVE BEEN PHYSICALLY FOUND AND THUS, THERE IS NO BENEFIT WHICH CAN BE SAID TO HAVE ACTUA LLY BEEN GAINED BY SHRI KESHAV BADAYA EITHER DIRECTLY OR INDIRECTLY IN HIS INDIVIDUAL CAPACITY BY HAVING SUCH FUNDS IN THE POSSESSION OF THE BANK. IN LIGHT OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE PROVISIONS OF ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 35 SECTION 13(1)(C) ARE NOT ATTRACTED IN THE INSTANT A ND THE CONTENTIONS SO ADVANCED BY THE REVENUE AND THE LD. CIT DR CANNOT BE ACCEPTED. 23. WE THEREFORE FIND THAT IT WAS MERELY A SUSPICIO N GATHERED THROUGH THE PRELIMINARY ENQUIRY CONDUCTED DURING TH E SURVEY AND SEARCH OPERATIONS. A SUSPICION HOWSOEVER STRONG CAN NOT BE A BASIS TO DENY A LEGIBLE CLAIM OF THE ASSESSEE UNLESS AND UNTIL IT IS SUPPORTED BY VERIFIABLE EVIDENCE ON RECORD BROUGHT OUT THROUGH THE PROCESS OF DETAILED INVESTIGATION. IN THE HANDS OF THE INTEGRATED BANK WHERE THE CASH WAS PHYSICALLY FOUND IN ITS PRE MISES, NO ADDITION HAS BEEN MADE ON ACCOUNT OF UNACCOUNTED CA SH AND THERE IS ALSO NO FINDING REGARDING ILLEGAL EXCHANGE OF OL D CURRENCY VIS-- VIS NEW CURRENCY AS EVIDENT FROM THE ASSESSMENT ORD ER PASSED IN CASE OF THE INTEGRATED BANK FOR AY 2017-18. THE SAM E RATHER SUPPORTS THE CASE OF THE ASSESSEE SOCIETY THAT THE CASH SO FOUND BELONGS TO THE ASSESSEE SOCIETY AND THE DEPARTMENT HAS THUS ACCEPTED THE SAID FACT AND IT HAS ATTAINED FINALITY . FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT OLD CURRENCY WHICH IS NOT A LEGAL TENDER CANNOT BE BROUGHT TO TAX. THEREFORE, UNLESS AND UNTIL THERE IS A FINDING BY THE APPROPRIATE AUTHORITY THAT THER E WAS ANY ILLEGALITY IN THE ACT OF THE ASSESSEE IN ACCEPTING THE FEES IN OLD CURRENCY, THE SAME CANNOT BE HELD AGAINST THE ASSES SEE SOCIETY. THEREFORE, WE FIND THAT IT IS A CASE OF MERE SUSPIC ION AND NOT A CONCLUSIVE FINDING AND EVEN THE DEPARTMENT ITSELF H AS GIVEN A CLEAN CHIT TO THE BANK. AS FAR AS THE ASSESSEE SOCIETY IS CONCERNED, BANK OFFICIALS AS WELL AS THE ASSESSEE'S RECORDS CONCLUS IVELY PROVE THAT THE FUNDS SO FOUND ARE FEES COLLECTED FROM THE STUD ENTS DULY ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 36 RECORDED IN THE BOOKS OF ACCOUNTS AND INFACT, SUCH AMOUNT HAS BEEN SEIZED BY THE DEPARTMENT WHICH FURTHER PROVES THAT THERE WAS NO DIVERSION OF FUNDS AND NO APPLICATION FOR PERSON AL BENEFIT OF ANY PERSON. THEREFORE, THERE IS NO BASIS TO SUSTAIN THE FINDINGS OF THE ID PR CIT. ONLY IN A SCENARIO, WHERE IT IS PROVED BEYO ND DOUBT THAT THE FUNDS OF THE ASSESSEE SOCIETY HAVE ACTUALLY BEE N DIVERTED FOR PURPOSES OTHER THAN THE STATED OBJECTS OF THE ASSES SEE SOCIETY, IT CAN BE SAID THAT SUCH FUNDS HAVE NOT BEEN UTILIZED FOR THE PURPOSES THE EXEMPTION UNDER THE INCOME TAX ACT HAS BEEN GRA NTED TO THE ASSESSEE SOCIETY AND TO THE EXTENT OF SUCH DIVERSIO N, THE PROVISIONS OF SECTION 11 AND 12 SHALL NOT APPLY. FURTHER, WHER E THE REVENUE THROUGH ITS INVESTIGATION FINDS THAT THERE IS ACTUA L DIVERSION OF FUNDS OF THE ASSESSEE SOCIETY AND SUCH DIVERSION HAS ACTU ALLY RESULTED IN DIRECT/INDIRECT BENEFIT OF THE RELATED PERSONS SO D EFINED U/S 13(3) OF THE ACT, THE ACTIVITIES AND THE CONDUCT OF THE ASSE SSEE SOCIETY WILL SURELY COME UNDER THE CLOUD. IN THE INSTANT CASE, T HE CASH HAS BEEN PHYSICALLY FOUND IN POSSESSION OF THE ASSESSEE 'S BANK AND THE SAID CASH BELONGS TO THE ASSESSEE SOCIETY AS CORROB ORATED BY THE STATEMENTS OF THE BANK EMPLOYEES, THERE IS THUS NO BASIS TO HOLD THAT THERE IS ANY DIVERSION OF FUNDS OF THE ASSESSE E SOCIETY FOR THE PERSONAL BENEFIT OF BADAYA FAMILY AND THE SAME CANN OT BE A BASIS TO WITHDRAWN THE EXEMPTION SO GRANTED TO THE ASSESS EE SOCIETY U/S 12AA OF THE ACT.' 33. THEREAFTER, THE LD CIT(A) HAS RECORDED HIS OWN INDEPENDENT FINDINGS AFTER DETAILED EXAMINATION OF THE MATTER A S UNDER: 10. I HAVE PERUSED THE WRITTEN SUBMISSIONS SUBMITT ED BY THE LEARNED A/R AND THE ORDER OF AO. ALONG WITH THE REP LY I HAVE ALSO ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 37 PERUSED THE REPLY FILED BY THE APPELLANT BEFORE HON BLE ITAT JAIPUR IN RESPECT TO CASH. BESIDES THE RECEIPTS AND ACKNOWLEDGMENT ISSUED IN RESPECT TO CASH. SAME WERE REPRODUCED BEF ORE THE HON'BLE ITAT JAIPUR TOO. PERUSAL OF REPLY FILED BY THE APPELLANT AND ORDER B Y HON'BLE ITAT JAIPUR INDICATES THE FOLLOWING: 10.2 THAT THE CASH UNDISPUTEDLY BELONG TO STUDENT S WHICH HAVE DEPOSITED THE SAME WITH THE APPELLANT SOCIETY PREDO MINANTLY FROM 01-12-216 TO 08-12-2016. SAME IS CLEAR FROM THE VAR IOUS STATEMENTS RECORDED DURING THE COURSE OF SURVEY AT THE APPELLANT SOCIETY, AND ALSO THE STATEMENT RECORDED AT THE PRE MISES OF INTEGRAL BANK COOPERATIVE. NOTICEABLY THE STATEMENT S ARE; 1) STATEMENT OF GANESH NARAIN GUPTA ACCOUNTANT, APPELL ANT DATED 09-12-2016 (REFER QUES. 11) 2) STATEMENT OF HARISH GUPTA GM, INTEGRAL COOPERATIVE BANK LTD DATED 11-12-2016 (REFER QUES. 13, 30, 34 41) 3) STATEMENT OF VIKRAM SINGH, CASHIER, INTEGRAL COOPER ATIVE BANK LTD DATED 10-12-2016 (REFER QUES. 14 & 21) 10.3 THAT THE CASH UNDISPUTEDLY BELONG TO THE APPEL LANT SOCIETY AS IT IS CONSISTENTLY EVIDENT FROM THE STATEMENT OF BANK EMPLOYEES AND ALSO THE STATEMENT OF THE ACCOUNTANT OF THE APP ELLANT. 10.4 ALL THESE STATEMENT ARE CONSISTENT & CONFIRMS THE FACT THAT CASH OF 1,56,59,500/- WAS FEES DEPOSITED FROM STUDENT OF APPELLANT SOCIETY. PHOTOCOPIES OF SAMPLE RECEIPTS W ERE PLACED ON ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 38 RECORD. THE FACT THAT SAME IS FEE RECEIVED FROM THE STUDENT WAS ALSO FACT VERIFIED BY THE SURVEY TEAM AT THE SPOT. THIS FACT IS ALSO MENTIONED BY HON'BLE ITAT JAIPUR IN ITS ORDER. 10.5 THAT SUCH CASH ACCUMULATION OF FEE RECEIVED FROM THE STUDENTS FROM 01-12-2016 ONWARDS. THE RECEIPTS OF CASH WAS EVIDENT FROM THE RECEIPTS ISSUED TO THE STUDENT FRO M TIME TO TIME. THE RECEIPTS ISSUES FIND A CORRESPONDING ENTRY IN T HE COMPUTER WHERE DATE WISE RECEIPT FROM THE STUDENT ARE ENTERE D BY THE DATA ENTRY OPERATOR. THUS THE FEE COLLECTED IS DULY RECO RDED IN THE BOOKS OF ACCOUNTS AS IS EVIDENT FROM THE FEE RECEIP TS, INDIVIDUAL STUDENT REGISTER, DAILY CASH COLLECTION SHEET AND R ELATED VOUCHERS PREPARED BY THE APPELLANT. 11. ADMITTEDLY THE CASH BOOK WAS NOT UPDATED NOR WA S EXIT OF CASH TO THE BANK WAS RECORDED IN THE CASH BOOK. YET THE NATURE & SOURCE OF CASH WAS ADEQUATELY EXPLAINED AS IT IS THE FEE FROM THE STUDENT RECEIVED OVER PERIOD OF TIME WHICH IS DULY ATTRIBUTABLE TO EACH OF THE STUDENT (WITH NAME & ID S AVAILABLE), THE RECEIPTS ISSUED TO THEM AND CORRESPONDING ENTRY IN THE FEE REGISTER MAINTAINED IN THE COMPUTER. NOTICEABLY, A POINTED OUT EARLIER, THE SURVEY TEAM HAS EXAMINED THE RECEIPT V OUCHERS ISSUED BY THE APPELLANT AND NOTHING ADVERSE IS NOTE D BY THEM NOR ADVERSELY COMMENTED UPON BY THE LD. AO. THUS ME RELY THERE IS NO DEBIT ENTRY IN THE CASH BOOK IT IS NOT PRUDENT TO HOLD THE CASH AS UNEXPLAINED WHEN OTHER IT IS DULY ENTER ED IN THE OTHER BOOKS OF ACCOUNTS AS DEFINED IN THE SECTION 2 (12A) OF THE I.T. ACT. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 39 11.2 THUS THE IT IS NOT THE CASE THAT THE CASH SO F OND IS UNEXPLAINED. SUCH CASH IS DULY EXPLAINED BY THE DOC UMENTARY EVIDENCE WHICH IS MAINTAINED IN THE REGULAR COURSE AND NO SUSPICION IS CASH ON THEM. IT MAY BE POINTED OUT TH AT FOLLOWING IS THE DATE WISE COLLECTION OF CASH WHICH HIS DULY REFLECTED IN THE CASH BOOK: DATE AMOUNT (IN RS.) 01.12.2017 9,87,037 02.12.2017 14,58,400 03.12.2017 16,60,730 04.12.2017 4,08,140 05.12.2017 22,46,415 06.12.2017 28,11,255 07.12.2017 31,04, 060 08.12.2017 27,38,816 09.12.2017 15,00,895 TOTAL 1,69,15,748/ - 11.3 THUS THE CASH FOUND FORM THE APPELLANT IS DULY SUPPORTED FORM THE FEE COLLECTION FROM THE STUDENT. I HAVE AL SO EXAMINED THE ASPECT OF FEE COLLECTION IN CASH AND IN CHEQUE FOR VARIOUS QUARTERS FOR 2 FINANCIAL YEARS. THE DETAILS ARE AS UNDER: F.Y. 2015 F.Y. 2016-17 QUARTER CASH CHEQUE TOTAL % OF CASH TO TOTAL QUARTER CASH CHEQUE TOTAL % OF CASH TO TOTAL APRIL- JUNE 7231255 2728399 9959654 72.6 APRIL- JUNE 7687345 2744364 10431709 73.67 JULY- SEPTEMBER 86001040 4230336 90231376 95.31 JULY- SEPTEMBER 98127627 4543212 102670839 95.57 OCTOBER- DECEMBER 63306437 3514758 66821195 94.74 OCTOBER- DECEMBER 66292102 1035449 67327551 98.46 JANUARY- MARCH 8349309 4140201 12489510 66.85 JANUARY- MARCH 6150893 3920601 10071494 61.07 ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 40 TOTAL 164888041 14613694 179501735 TOTAL 178257967 12243626 190501593 11.4 FROM THE TABLE ABOVE ONE CAN INFER THAT BY AND LARGE THE APPELLANT IS RECEIVING THE FEE IN CASH IN EACH OF T HE QUARTER. SAME IS ALSO EVIDENT FROM THE CASH BOOK OR FEE COLLECTION R EGISTER AS THE RANGE OF FEE ACCEPTED FROM EACH STUDENT IN EACH QUARTER I S 4000 TO 6000. THE PROPORTION OF FEE IN CASH TO THE TOTAL FEE RECEIVED IN EACH OF THE QUARTER IS BY AND LARGE SAME THOUGH THERE IS MINOR INCREASES IN THE OCTOBER-DECEMBER QUARTER OF 2017. THE MINOR INCREAS E DOES NOT TO POINT OUT TOWARDS ANY INFIRMITY, IN MY VIEW AS THE FEE IS DULY ACCOUNTED FOR IN THE BOOKS SO ALSO. ASPECT OF ACCEPTANCE OF OLD CURRENCY NOTES BY APPEL LANT 12. I HAVE EXAMINED THE ASPECT OF ACCEPTANCE OF OLD CURRENCY NOTES BY THE APPELLANT AFTER 08-11-2016. OUT OF THE TOTAL CA SH FOUND AND SEIZED OF RS. 156,59,500 THE CURRENCY IN NEW NOTES AND OLD NO TES IS AS UNDER: OLD CURRENCY RS. 1002 500 NEW CURRENC Y RS. 14657 000 TOTAL SEIZED RS. 1565 9500 12.2 POST DEMONETIZATION THE GOI BARRED USING OLD NOTES AND ONLY AT FEW PLACES THE OLD NOTES WERE PERMITTED. THEY ARE E XTRACTED FROM WEB SEARCH FROM GOOGLE. NEW DELHI: THE GOVERNMENT HAS STOPPED OVER THE COUN TER EXCHANGE OF OLD NOTES OF RS 500 AND RS 1000 FROM TO DAY MIDNIGHT. GOVERNMENT HAS PERMITTED VARIOUS EXEMPTIO NS FOR ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 41 CERTAIN TRANSACTIONS AND ACTIVITIES WHEREIN PAYMENT COULD BE MADE ONLY THROUGH OLD RS. 500 NOTES. ALL THESE PLACES WI LL ALLOW USAGE OF RS 500 NOTES TILL THE MIDNIGHT OF 15 DECEMBER 2016. 1) PAYMENTS TOWARDS PRE PAID MOBILE TOP-UP TO A LIMIT OF RS. 500 PER TOP-UP. 2) PURCHASE FROM CONSUMER COOPERATIVE STORES WILL BE L IMITED TO RS. 5000 AT A TIME. 3) PAYMENT OF FEES IN CENTRAL OR STATE GOVERNMENT COLLEGES. 4) FOREIGN CITIZENS WILL BE PERMITTED TO EXCHANGE FORE IGN CURRENCY UP TO RS. 5000 PER WEEK. NECESSARY ENTRY T O THIS EFFECT WILL BE MADE IN THEIR PASSPORTS. 5) PAYMENT OF CURRENT AND ARREAR DUES TO UTILITIES WIL L BE LIMITED TO ONLY WATER AND ELECTRICITY. THIS FACILIT Y WILL CONTINUE TO BE AVAILABLE ONLY FOR INDIVIDUALS AND HOUSEHOLDS. 6) IT HAS BEEN DECIDED THAT TOLL PAYMENT AT TOLL PLAZA S TO BE MADE THROUGH OLD RS. 500 NOTES FROM 3.12.2016 TO 15 .12.2016. 7) PAYMENT OF SCHOOL FEES UP TO RS. 2000 PER STUDENT I N CENTRAL GOVERNMENT, STATE GOVERNMENT, MUNICIPALITY AND LOCAL BODY SCHOOLS. 8) GOVERNMENT HOSPITALS 9) RAILWAY TICKETS 10) PUBLIC TRANSPORT 11) AIRLINE TICKETS AT AIRPORTS 12) MILK BOOTHS ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 42 13) CREMATORIA/BURIAL GROUNDS 14) PETROL PUMPS 15) METRO RAIL TICKETS 16) MEDICINE PRESCRIBED BY A DOCTOR 17) LPG GAS CYLINDERS 18) RAILWAY CATERING 19) POWER AND WATER BILLS 20) ENTRY TICKETS OF ASI MONUMENT 21) CONSUMER COOPERATIVE STORES 22) TAXES AND PENALTIES TO GOVERNMENT BODIES COURT FEES 23) SEEDS AT STATE-OWNED OUTLETS 12.3 THUS VIDE LETTER DATED 30-07-2019 THE APPELLAN T WAS SHOW CAUSED TO EXPLAIN WHY PART OF THE FEE (ABOUT 6.4 % OF THE TOTAL) WAS RECEIVED IN OLD NOTES WHEN THE GOI HAS SPECIFIC ALLY WAS BARRED IN DOING SO AND THE APPELLANT WAS NOT IN THE EXEMPTED CATEGORY OF PARSON ENTITLED TO RECEIVED THE OLD NOT ES. 12.4 THE APPELLANT VIDE UNDATED LETTER RECEIVED ON 07-08-2019 SUBMITTED THAT A COPY OF CIRCULAR DATED 28-11-2016 ISSUED BY RAJASTHAN UNIVERSITY ASKING ALL THE UNIVERSITIES AN D SCHOOLS TO ACCEPT FEES BY 14-12-2016. IT WAS SUBMITTED THAT TH E FEE COLLECTION WAS IN VIEW OF THE CIRCULAR FOR THE INCO MING EXAMINATION IN THE DECEMBER-JANUARY. ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 43 12.5 I AM OF THE VIEW THAT APPELLANT CONTINUED TO R ECEIVE FEE ETC FROM STUDENT DESPITE BAN BY THE RBI IN THIS REGARD. THERE SEEMS TO BE NO INCOME TAX VIOLATION AS THE NATURE & SOURCE OF FEE IS EXPLAINED. HOWEVER THERE IS VIOLATION OF GUI DELINES ISSUED BY RBI. THE LD. AO THUS WILL WRITE A LETTER TO THE RESERVE BANK OF INDIA, TONK ROAD, RAM BAGH, JAIPUR REGARDING THI S VIOLATION FOR FURTHER ACTION. 12.6 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND SUBJECT TO THE ABOVE FOR THE PURPOSES OF INCOME TAX , I AM OF THE VIEW THE ADDITION OF RS.1,56,59,500/- BY THE LD . AO IS UNTENABLE & THE SAME IS DIRECTED TO BE DELETED. 34. DURING THE COURSE OF HEARING, LD CIT DR RELIED ON THE FINDINGS OF THE ASSESSING OFFICER AND LD COUNSEL FOR THE ASSESS EE RELIED ON THE FINDINGS OF THE LD CIT(A). WE FIND THAT THE MATTER HAS BEEN EXHAUSTIVELY EXAMINED BY THE COORDINATE BENCH AND T HEREAFTER, BY THE LD CIT(A) AGAIN DURING THE QUANTUM PROCEEDINGS. UND ISPUTED AND UNDENIABLE FACTS ARE THAT CASH SO FOUND REPRESENTS FEES DEPOSITED BY STUDENTS WITH THE ASSESSEE SOCIETY AS EMERGING FROM THE STATEMENTS OF VARIOUS PERSONS RECORDED DURING THE COURSE OF SURVE Y AND EVEN FROM THE FINDINGS OF THE SURVEY TEAM. THE CASH SO FOUND IS DULY EXPLAINED BY THE DOCUMENTARY EVIDENCE WHICH IS MAINTAINED IN REG ULAR COURSE BY THE ASSESSEE SOCIETY. DURING THE COURSE OF HEARING, NO THING HAS BEEN BROUGHT TO NOTICE BY THE REVENUE WHICH CONTROVERTS THE SAID FACTUAL POSITION. IN LIGHT OF THE SAME, WE DONT SEE ANY I NFIRMITY IN THE ORDER OF THE LD CIT(A) DELETING THE ADDITION MADE U/S 69A OF THE ACT AND THE ITA NOS. 1202-1205/JP/2019 ACIT, JAIPUR VS. ST. WILFRED EDUCATION SOCIETY, J AIPUR 44 SAME IS HEREBY CONFIRMED AND THE GROUND SO TAKEN BY THE REVENUE IS DISMISSED. 35. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 1202/JP/2019, 1203/JP/19 ARE DISMISSED AND THE APPEAL OF THE REVE NUE IN ITA NO. 1204/JP/19 AND 1205/JP/19 ARE PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02/01/2020 SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/01/2020. *GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ACIT, CENTRAL CIRCLE-3, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S ST. WILFRED EDUCATION SOCIETY, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1202 - 1205/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR