SCHOLARS EDUCATION TRUST OF INDIA, Jaipur V. CIT(EXEMPTIONS), Jaipur

ITA 152/JPR/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2075 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 20-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Corroborative evidences; Valuation report
• Section: 143(3); 133(6); 10; 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, JAIPUR LQJH FNOK FLAG] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SMT. DIVA SINGH, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.152/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 M/S SCHOLARS EDUCATION TRUST OF INDIA, BANI PARK, JAIPUR CUKE VS. THE CIT, (EXEMPTIONS), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AADTS1374A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI B.K. GUPTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 20/03/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 29/05/2017 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(EXEMPTION), JAIPUR DATED 03.01.2017 WITHDRAWING APPROVAL GRANTED U/S 10(23C)(VI) OF THE INCOME TAX ACT 196 1. IN ITS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND OF APPEAL:- 1 THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIO NS), JAIPUR HAS ERRED ON FACTS AND IN LAW IN WITHDRAWING THE APPROVAL OF EXEMPTION GRANTED TO THE ASSESSEE U/S 10(23C)(VI ) OF THE INCOME TAX ACT, 1961 BY HOLDING THAT ASSESSEE HAS B EEN CONSTITUTED NOT FOR SOLE AND EXCLUSIVE PURPOSE OF E DUCATION AND IT ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 2 HAS INCURRED THE EXPENSES WITH THE SOLE MOTIVE OF B ENEFIT TO THE TRUSTEES BY: A) PAYING RENT TO THE TRUSTEES AND THEIR DAUGHTER F OR THEIR HOUSE AND THUS PROVIDING UNDUE BENEFIT TO THE TRUSTEES, B) PAYING PERSONAL TRAVELLING EXPENSES OF MS PRIYAN KSHA MISHRA AND ARYAN MISHRA, AND C) ADVANCING FUNDS IN FORMS OTHER THAN THAT SPECIFI ED U/S 11(5) OF THE ACT AND FOR PERSONAL BENEFIT OF THE TRUSTEES. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE SOCIETY WAS GRANTED APPROVAL U/S 10(23C)(VI) OF THE ACT BY CCIT , JAIPUR, VIDE NOTIFICATION NO. NO. 20/2010-11 DATED 27-12-2010 FOR AY 2011-12 AND ONWARDS. THEREAFTER, DURING THE ASSESSMENT PROC EEDINGS FOR AY 2013-14, THE ASSESSING OFFICER MOVED A PROPOSAL FOR WITHDRAWAL OF THE AFORESAID EXEMPTION VIDE HIS LETTER DATED 28 .03.2016 AS HE OBSERVED THAT THE ASSESSEE INSTITUTION DOES NOT SAT ISFY THE CONDITIONS LAID DOWN UNDER SECTION 10(23C)(VI) OF THE I T ACT, 1961. 2.1 THEREAFTER, A DETAILED SHOW CAUSE DATED 01-09-2 016 WAS ISSUED TO THE ASSESSEE BY THE LD CIT(E) AND IN RESP ONSE OF THE SAME, THE AR SUBMITTED ITS REPLY VIDE LETTER DATED 28-09- 2016 AND FURTHER VIDE LETTER DATED 07-10-2016. TAKING INTO CONSIDERA TION THE REPLY AND SUBMISSIONS OF THE ASSESSEE, THE LD CIT(E) HELD THA T THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 10(23C) OF THE I T ACT. THE RELEVANT FINDING OF THE LD CIT(E) IS REPRODUCED AS UNDER: 7.0 IN LIGHT OF THE ABOVE DISCUSSION, IT IS HELD THAT THE TRUST HAS CARRIED OUT ITS ACTIVITIES IN THE MANNER WHICH HAS RESULTED INTO UNDUE BENEFIT TO THE TRUSTEES AND THEIR FAMILY MEMB ERS. THE ACTION OF THE TRUSTEES OF GIVING OWN HOUSE, IN WHIC H THEY ARE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 3 RESIDING, ON RENT TO THE TRUST AND TAKING BACK THE SAME AS RENT FREE ACCOMMODATION, CANNOT NOT BE HELD CHARITABLE I N ANY MANNER. SUCH ARRANGEMENTS OF PERMANENT SIPHONING OF TRUST FUND TO TRUSTEES ARE NOT PERMISSIBLE IN CASE OF CHARITAB LE ORGANIZATION. SUCH RENT PAYMENT IS NEITHER THE APPLICATION OF FUN D NOR AS PER THE OBJECTS OF THE TRUST. THIS HAS CAUSED GRAVE VIO LATION OF SUB CLAUSE (A) OF 3 RD PROVISO OF SECTION 10(23C) OF IT ACT. THE TRUSTEES AND FAMILY MEMBERS ARE ALSO BOOKING THEIR PERSONAL EXPENSES ON TRAVELLING & STUDY, INTO TRUST BOOKS. T RUST IS ALSO PURCHASING LUXURIOUS FLAT FOR THE BENEFIT OF THE TR USTEES AND GIVING ADVANCES WITHOUT ANY RECIPROCAL BENEFIT. THIS IS AL SO CAUSING BENEFIT TO THE TRUSTEES AS WELL AS VIOLATION OF CLA USE (B) OF 3RD PROVISO OF SECTION 10(23C) OF THE ACT AS THE FUNDS ARE NOT INVESTED INTO PRESCRIBED MODES. 7.1 IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THA T THE APPROVAL U/S 10(23C)(VI) GRANTED TO THE ASSESSEE TRUST IS LIABLE TO BE WITHDRAWN BY EXERCISING THE POWERS GIVEN TO COMPETENT AUTHORI TY UNDER PROVISO 13 OF SECTION 10(23C)(VI) R.W. SUB-CLAUSE(A ) AND (B) OF 3RD PROVISO OF SECTION 10(23C)(VI) OF THE I.T. ACT, 196 1. THEREFORE THE APPROVAL UNDER SUB-CLAUSE (VI) OF CLAUSE (23C) OF S ECTION 10 OF THE INCOME-TAX ACT, 1961 READ WITH RULE 2CA OF INCOME T AX RULES, 1962, WHICH WAS ACCORDED BY THE CHIEF COMMISSIONER OF INCOME- TAX, JAIPUR VIDE NOTIFICATION NO. 20/2010-11 DATED 27/12/2010 IS HEREBY WITHDRAWN FROM THE AY. 2013-14 ONWARDS. 3. WE NOW REFER TO EACH OF THE ISSUES RAISED BY THE LD. CIT (E) BASIS WHICH THE EXEMPTION UNDER SECTION 10(23C)(VI) HAS B EEN WITHDRAWN AND THE SUBMISSION OF THE ASSESSEE IN THAT REGARD: 3.1 RENT PAID FOR THE PROPERTY 219/5, SARDARPURA, UDAIP UR & PROPERTY 12/493, INDIRA NAGAR, LUCKNOW FINDINGS OF THE LD CIT(E): ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 4 FROM THE MEMORANDUM OF THE TRUST, SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VIDE SUBMISSION DATED 21.08 .2015 IT HAS BEEN NOTED THAT FOLLOWING PERSONS ARE THE MEMBERS OF GOV ERNING BODY OF THE TRUST NAME OCCUPATION DESIGNATION 1. SHRI SANGAM MISHRA EDUCA TIONIST CHAIRMAN/SECRETARY/DIRECTOR 2. SMT. LILY (LAKSHYAJAYA MISHRA) SERVICE TREAS URER AND FURTHER, INFORMATION RECEIVED FROM THE DISTRICT ELECTION OFFICER U/S 133(6) OF THE I.T. ACT VIDE HIS LETTER DATED 27.01.2016 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT HAS BEEN GATHERED THAT MISS PRIYAKANKSHA MISHRA & MR. ARYAN MISHRA ARE CHILDREN OF SHRI SANGAM MISHRA. ON GOING THROUGH THE DETAILS FURNISHED DURING ASSES SMENT PROCEEDINGS, IT WAS NOTED THAT SH. SANGAM MISHRA, D IRECTOR OF THE TRUST AND SMT. LAKSHYAJAYA MISHRA (W/O SH. SANGAM M ISHRA), ARE TRUSTEES OF THE TRUST AND BOTH THESE PERSONS ARE MA NAGING THE AFFAIRS OF THE TRUST. IT HAS BEEN OBSERVED THAT THE TRUST HAD PAID RS. 2,28,000/- AND RS. 4,80,000/- ON ACCOUNT OF RENT FO R THE PROPERTY TO SH. SANGAM MISHRA AND SMT. LAKSHYAJAYA MISHRA RE SPECTIVELY, DURING THE ASSESSMENT YEAR 2013-14. HOWEVER, IT REV EALED THAT BOTH THESE PERSONS ARE OWNER OF THAT PROPERTY AND T HEY THEMSELVES ARE RESIDING IN THE SAID PROPERTY WHICH IS ALSO EVI DENT FROM THE CORRESPONDENCE MADE WITH THE OTHER INDEPENDENT OFFI CES, FIELD ENQUIRY AND ADMISSION BY TRUST ITSELF, DURING ASSES SMENT PROCEEDINGS, THAT THE AFORESAID ACCOMMODATION HAS B EEN TAKEN ON ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 5 RENT FROM DR. SANGAM MISHRA AND SMT. LAKSHYAJAYA MI SHRA AND THE SAME HAS BEEN PROVIDED TO DR. SANGAM MISHRA BY THE TRUST AS RENT FREE ACCOMMODATION. IT HAS BEEN FURTHER SUBMITTED BY THE TRUST THAT SCI ENCE LAB AND LIBRARY OF THE SCHOOL ARE RUNNING IN A PORTION OF S UCH PROPERTY RELATED TO MRS. LAKSHYAJAYA MISHRA. IN THIS REGARD, SPOT EN QUIRY HAS ALSO BEEN CONDUCTED BY THE INSPECTOR OF THE OFFICE OF AC IT(E), CIRCLE, JAIPUR AND IT HAS BEEN REPORTED THAT THE BASEMENT I S BEING USED BY TRUST AS COMPUTER LAB AND THE THREE FLOORS (GROUND, 1 & 2 ND ) OF LUXURIOUS DUPLEX BUNGALOW, IS BEING USED FOR RESIDE NCE OF SH. SANGAM MISHRA AND HIS FAMILY. THUS, ONLY BASEMENT I S BEING USED BY TRUST AS COMPUTER LAB AND REMAINING WHOLE PROPERTY IS BEING USED BY SH. SANGAM MISHRA AND HIS FAMILY FOR THEIR RESID ENCE PURPOSES. THE TRUST IS PAYING RENT FOR SUCH PART OF BUILDING WHICH IS ACTUALLY BEING UTILIZED BY SH. SANGAM MISHRA AND HIS FAMILY MEMBER S. IN THIS WAY, THE TRUSTEES HAVE AVAILED UNDUE BENEFIT FROM THE TRUST. SH. SANGAM MISHRA AND MRS. LAKSHYAJAYA MISHRA ARE C OVERED PERSON U/S 13(3) OF THE I.T. ACT, 1961. THE PROPERTY BEING UTILIZED BY SH. SANGAM MISHRA AND HIS FAMILY ONLY FOR WHICH THEY HA VE RECEIVED RENT FROM THE TRUST IN WHICH DR. SANGAM MISHRA AND MS. L AKSHYAJAYA MISHRA THEMSELVES ARE TRUSTEES. THUS, THE PROPERTY IS NOT BEING UTILIZED FOR THE BENEFIT OF THE TRUST AS PER OBJECTS OF THE TRUST. IT IS ALSO WORTHWHILE TO BE MENTION HERE THAT DURIN G THE YEAR UNDER CONSIDERATION, THE TRUST HAS PAID RENT OF RS. 3,99, 600/- TO MS. PRIYAKANKSHA MISHRA, DAUGHTER OF SH. SANGAM MISHRA, ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 6 DIRECTOR/CHAIRMAN OF THE TRUST/TRUST, IN RESPECT OF ANOTHER PROPERTY HOUSE NO. 12/493, INDIRA NAGAR, SECTOR-9, LUCKNOW. HOWEVER, NO LEASE AGREEMENT HAS BEEN FURNISHED IN T HIS REGARD. SO, IT IS CLEAR THAT THE FUNDS OF THE TRUST ARE BEI NG USED FOR THE BENEFIT OF TRUSTEES. IT IS EVIDENT FROM THE ABOVE THAT THE UNDUE BENEFIT WAS TAKEN BY THE TRUSTEES OF THE TRUST ON ACCOUNT OF RENT RECEIPTS I N RESPECT OF SUCH PROPERTY WHICH IS UTILIZED BY THEMSELVES ONLY. ACCO RDINGLY, SHOW CAUSE WAS GIVEN TO ASSESSEE ON THIS ACCOUNT AND SUBMISSIO NS OF THE A/R DATED 28-09-2016 WAS CONSIDERED BUT NOT FOUND TENAB LE AS THE PAYMENT OF RENT TO THE TRUSTEE ITSELF FOR THE PROPE RTY, WHICH IS BEING USED BY TRUSTEES FOR RESIDENTIAL PURPOSE IS C LEARLY AN ARRANGEMENT OF SIPHONING OF THE FUNDS OF THE TRUST. IN NO MANNER IT CAN BE JUSTIFIED TO PROVIDE RENT FREE ACCOMMODAT ION TO THE TRUSTEE, THE ACCOMMODATION WHICH ITSELF HAS BEEN TA KEN ON RENT FROM THE SAME TRUSTEE. THE ABOVE FLOWCHART CLEARLY ESTABLISH THE MANIPULAT ION DONE BY TRUSTEE TO AVAIL MAXIMUM BENEFIT OF THE FUNDS OF TH E TRUST AND IN DUAL CAPACITY THE SAME PERSON AND HIS FAMILY MEMBER S HAVE BEEN BENEFITED. FURTHER THE REPLY OF THE A/R IS NOT CONV INCING ON THE FOLLOWING GROUNDS:- 1. AS PER ASSESSEES SUBMISSION THE RENTAL VALUE AS DETERMINED BY THE REGISTERED VALUER COMES AS UNDER: (A) RIGHT PORTION OF THE PLOT= PERTAINS TO MR. SANG AM MISHRA - RS. 2.61 LACS. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 7 (B) LEFT PORTION OF THE PLOT PERTAIN TO LILY MISHRA - RS. 6.53 LACS IN THIS WAY THE TOTAL FAIR RENTAL VALUE OF PROPERTY DETERMINED AT RS. 9.40 LACS AGAINST WHICH THE TRUST HAS PAID TOTAL RE NT OF RS. 7.04 LACS ONLY HERE, IT IS WORTH TO MENTION THAT THE VALUATION OF FMR OF RS. 9.14 LACS OF THE PROPERTY, IN COMPOSITE WAY, FOR BASEMEN T, GROUND FLOOR, FIRST FLOOR AND SECOND FLOOR (I.E. LEFT PART OF THE PROPERTY, OWNED BY MS. LILY MISHRA VALUED AT FMR OF RS. 6.53 LACS) AND ALSO INCLUDES THE VACANT AREA (RIGHT PART OF THE PROPERT Y, OWNED BY MR. SANGAM MISHRA, VALUED AT FMR OF RS. 2.61 LACS), THE AREA FOR WHICH, TRUST HAS ENTERED INTO AGREEMENTS WITH MR. S ANGAM MISHRA AND MS LIKL MISHRA SEPARATELY. OUT OF THIS COMPLETE PORTION, FOR WHICH TRUST HAS PAID RENT RS. 7.04 LACS TO BOTH THE SE PERSON, ONLY BASEMENT PART IS BEING USED BY TRUST FOR LAB PURPOS E. FROM THE SPOT ENQUIRY CONDUCTED BY THE INSPECTOR OF CIRCLE O FFICE, ITHAS BEEN GATHERED THAT BASEMENT BEING USED BY THE TRUST AS C OMPUTER LAB AND LUXURIOUS DUPLEX BUNGALOW ON GROUND FLOOR, 1 ST AND 2 ND FLOORS SITUATED ON IT IS BEING USED FOR RESIDENCE OF SH. S ANGAM MISHRA AND HIS FAMILY. THUS, ONLY BASEMENT IS BEING USED B Y TRUST AS COMPUTER LAB AND REMAINING WHOLE PROPERTY IS BEING USED BY SH. SANGAM MISHRA AND HIS FAMILY FOR THEIR RESIDENCE PU RPOSES. THE VACANT PORTION IS USED AS GARDEN AREA OF RESIDENCE AND PARKING ALSO. IN THIS WAY, ONLY PART OF THE PROPERTY I.E. BASEMENT ONLY IS BEING USED FOR THE TRUST WHERE AS THE RENT HAS BE EN PAID FOR THE COMPLETE POTION INCLUDING RESIDENTIAL AREA USED BY TRUSTEES. THEREFORE COMPARING THE FMR WITH ACTUAL RENT PAID B Y TRUST DOES ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 8 NOT SUBSTANTIATE THE CLAIM OF THE ASSESSEE IN THE L IGHT OF THE FACT THAT AMOUNT OF RENT PAID INCLUDES THE RENT FOR THE PORTION WHICH WAS NOT ACTUALLY USED BY TRUST. 2. FURTHER THE CONTENTION OF THE A/R THAT THE FIRS T FLOOR OF THE PREMISES IS USED FOR HOLDING MEETING AND ACCOMMODAT IONS OF PRINCIPALS/ STAFF MEMBER OF VARIOUS SCHOOLS WHO ARE REQUIRED TO VISIT UDAIPUR FROM TIME TO TIME FOR THE WORK OF THE TRUSTS. THE SECOND FLOOR OF THE PREMISES IS USED AS A STORAGE- SPACE FOR SCHOOL RECORDS, TROPHIES, IMPORTANT DOCUMENTS AND OTHER SU CH ITEMS. THE OBSERVATION OF THE INSPECTOR THAT THE FIRST AND SEC OND FLOOR ARE USED ONLY AS A RESIDENCE OF SHRI SANGAM MISHRA AND HIS FAMILY IS INCORRECT AND THIS FACT HAS BEEN VERIFIED. HAS NO WORTH AS THE SAME HAVE BEEN FURNISHED FOR SAKE OF THE ARGUMENTS ONLY. THE RESIDENCE AREA, MORE PARTICULARLY SAY DRAWING ROOM OF DIRECTORS HOUSE, IF USED, APART FROM ATTENDING PERSONAL GUEST S, TO HOLD MEETING WITH THE PERSONS CONCERNED WITH SCHOOL WORK , IT CANNOT BE SAID THAT FLOOR HAS BEEN USED FOR TRUST PURPOSE. BEING DIRECTOR OF THE TRUST, IT IS QUITE NATURAL TO MEET THE PEOPL E AT HOME FOR THE SCHOOL RELEVANT ISSUED ALSO BUT THAT DOES NOT MEAN THAT THAT FLOOR HAS BEEN USED BY TRUST EXCLUSIVELY FOR WHICH IT HAS TO PAY RENT FOR COMPLETE FLOOR. SIMILARLY, IF ON THE SECOND FLOOR, MR. SANGAM MISHRA, DO KEPT THE FILES & OTHER IMPORTANT DOCUMEN TS, INCLUDING TRUST RELATED DOCUMENTS, IT CANNOT BE HELD THAT FLO OR HAS BEEN USED BY TRUST EXCLUSIVELY FOR WHICH IT HAS TO PAY RENT FOR COMPLETE FLOOR. IN FACT, SERVING THESE KINDS OF ARGUMENTS IS JUST AND EYEWASH ONLY AND HOLD NO FOOTING. HOWEVER, SUBMISSI ON IS SILENT ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 9 ABOUT USE OF FIRST FLOOR AND GARDEN AREA AND PARKIN G AREA, WHICH HAS BEEN USED EXCLUSIVELY BY TRUSTEE ONLY AS PART O F THIS RESIDENCE BUT TRUST HAS PAID RENT FOR THAT TOO, AND FMR AS RE PORTED INCLUDES THAT PORTION ALSO, NOT USED BY TRUST AT ALL IN ANY MANNER. 3. FURTHER, THE CONTENTION OF THE A/R THAT THE RENT FREE ACCOMMODATION HAS BEEN TAKEN INTO CONSIDERATION WHI LE OFFERING THE TAX IN THE INDIVIDUAL HEADS OF THE TRUSTEES IS ALSO NOT CONVINCING AS SPOT ENQUIRY HAS BEEN CONDUCTED BY TH E INSPECTOR OF THIS OFFICE AND IT HAS BEEN GATHERED THAT BASEMENT BEING USED BY THE TRUST AS COMPUTER LAB AND LUXURIOUS DUPLEX BUNG ALOW ON GROUND FLOOR, 1 ST AND 2 ND FLOOR SITUATED ON IT IS BEING USED FOR RESIDENCE OF SH. SANGAM MISHRA AND HIS FAMILY. THUS , ONLY BASEMENT IS USING BY TRUST AS COMPUTER LAB AND REMA INING WHOLE PROPERTY IS BEING USED BY SH. SANGAM MISHRA AND HIS FAMILY FOR THEIR RESIDENCE PURPOSES. A TOTAL RENT OF RS. 7,08,000/- WAS PAID BY THE TRUS T IN RESPECT OF SUCH BUILDING 219/5, SARDARPURA, UDAIPUR. AS PER SP OT ENQUIRY, SH. SANGAM MISHRA UTILIZING 2/3 RD PART OF SUCH BUILDING, THEREFORE, RS. 4,72,000/- (2/3*708000/-) SHOULD BE TAXED IN THE HA NDS OF THE SH. SANGAM MISHRA ON ACCOUNT OF RENT FREE ACCOMMODATION PROVIDED BY THE TRUST. WHEREAS ON GOING THROUGH THE COMPUTAT ION OF INCOME OF SH. SANGAM MISHRA FOR THE A.Y. 2013-14 FU RNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT HAS BEEN REVEALED THAT SH. SANGAM MISHRA HAS SHOWN RS. 1,85,398/- ONL Y ON ACCOUNT OF ACCOMMODATION PROVIDED BY THE TRUST. AS SH. SANG AM MISHRA HAD SHOWN RS. 1,85,398/- ONLY ON ACCOUNT OF ACCOMMO DATION ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 10 PROVIDED BY THE TRUST AND THE TRUST HAD PAID RENT F OR THE ALLEGED PROPERTY AMOUNTING TO RS. 7,08,000/-, THE ARGUMENT THAT IT HAS BEEN SHOWN AS PERQUISITE FALLS FLAT AND HAS GOT ON SUBSTANCE. THE TRUST IS PAYING RENT FOR SUCH PART WHICH ARE ACTUAL LY BEING UTILIZED BY SH. SANGAM MISHRA AND HIS FAMILY MEMBERS WITHOUT DRAWING ANY BENEFIT. 4. FURTHER, IN THE HANDS OF TRUST, THE TOTAL EXPEND ITURE HAS BEEN CLAIMED AS APPLICATION OF INCOME WHEREAS IN TH E INDIVIDUAL HAND ONLY PART OF THIS EXPENSE HAS BEEN OFFERED AS VALUE OF PERKS AS RENT FREE ACCOMMODATION AND THE RENTAL INCOME SO EARNED HAS BEEN SHOWN AS INCOME FROM HOUSE PROPERTY ON WHICH S TANDARD DEDUCTION UNDER SECTION 24(A) HAS ALSO BEEN CLAIMED @ 30%. IT IS ALSO WORTHWHILE TO BE MENTIONED HERE THAT AS PER DETAILS FURNISHED DURING ASSESSMENT PROCEEDINGS, IT HAS BEE N GATHERED THAT DURING THE YEAR UNDER CONSIDERATION, THE TRUST HAS PAID RENT OF RS. 3,99,600/- TO MS. PRIYAKANKSHA MISHRA, DAUGT HER OF SH. SANGAM MISHRA, DIRECTOR/CHAIRMAN OF THE TRUST IN R ESPECT OF PROPERTY HOUSE NO. 12/493, INDIRA NAGAR, LUCKNOW. D URING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO PR ODUCE LEASE AGREEMENT FOR THE SAME PROPERTY BUT HE DID NOT PROD UCE LEASE AGREEMENT. HOWEVER, THE SAME HAS BEEN FURNISHED DUR ING RESCINDING PROCEEDINGS, AND IT WAS SUBMITTED THAT T HIS PROPERTY IS IN FRONT OF INDIRA NAGAR, LUCKNOW, SCHOOL OF THE TR UST. THE CONTENTION OF A/R IS NOT ACCEPTABLE FOR THE REASONS BELOW- (I) FIRST OF ALL THE RENT DEED AGREEMENT DATED 19.1 0.12 HAS NO EVIDENTIAL VALUE BEING NEITHER NOTARIZED NOR WITNE SSED BY ANYONE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 11 AND SECONDLY IF ASSESSEE IS HAVING THE SAME IN ITS POSSESSION THAT WHY THE SAME HAS NOT BEEN FURNISHED BEFORE A.O. DU RING ASSESSMENT PROCEEDING UPTO 31 ST MARCH 2016, IN SPITE OF SPECIFICALLY ASKED. (II) THE CONTENTION OF A/R IS ALSO NOT CORRECT THAT THIS PROPERTY IS IN FRONT OF INDIRA NAGAR, LUCKNOW, SCHOOL OF THE TRUS T. AS THE ADDRESS OF SCHOOLS AT LUCKNOW ARE AS UNDER- CENTRAL ACADEMY SR. SEC. SCHOOL, INDIRA NAGAR, SECT OR-9, NEAR WATER TANK, LUCKNOW, THE SCHOOL IS SITUATED IN INDIRA NAGAR SECTOR-9, WH EREAS THE PROPERTY FOR WHICH ASSESSEE TRUST HAS PAID RENT OF RS. 3,99,600/- TO MS. PRIYAKANKSHA MISHRA, DAUGHTER OF SH. SANGAM MISHRA, DIRECTOR/CHAIRMAN OF THE TRUST IS SITUATED AT SECTO R -12, INDIRA NAGAR, AS NOTED FROM THE SUPPORTING VALUATION REPOR T FURNISHED BY A/R ITSELF. (III) MOREOVER, NON UTILIZATION OF THE SAID PROPERT Y FOR THE OBJECT OF THE TRUST HAS BEEN ESTABLISHED, NO SUPPORTING DOCUM ENTARY EVIDENCES HAS BEEN FURNISHED FOR THE USE OF THE SAI D PROPERTY. IT HAS ALSO BEEN NOTED FROM THE DETAILS FURNISHED SO F OR THAT PLOT NO. 12/492, I.E. ADJOINING OF THIS RENTED PREMISE 12/49 3 ALSO BELONGS TO MR. SANGAM MISHRA AND MS. LAKSHJAYA MISHRA. SO T HERE REMAINS NO DOUBT THAT THE INDIVIDUAL INVESTMENTS HAS BEEN S HOWN AS RENTED TO TRUST TO SIPHONING THE FUND OF THE TRUST FOR THEIR INDIVIDUAL BENEFITS BY EVERY MEANS AND MODES WHATE VER IS POSSIBLE FOR THEM. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 12 (IV) THE VALUATION REPORT FOR THE SAID PROPERTY IS ALSO NOT RELIABLE AS THE SAME IS UNDATED AND IF THE SAME WAS AVAILABLE WITH THE ASSESSEE THEN WHY IT HAS NOT BEEN FURNISHED DURING THE COURSE OF ASSESSMENT. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT IN THE NAME OF RENT FREE ACCOMMODATION, THE TRUSTEES HAVE ACTUALLY TAKEN REN TAL INCOME FOR THEIR OWN RESIDENCE AND IN THIS MANNER AVAILED UNDU E BENEFIT FROM THE TRUST. THIS ISSUE IS NOT A SINGLE YEAR BASED, R ATHER THIS PRACTICE IS THERE YEAR AFTER YEAR. THIS MAKES A STRONG CASE FOR WITHDRAWAL OF APPROVAL. ASSESSEES CONTENTIONS: PER CONTRA, THE LD AR SUBMITTED THAT THE REASONS GI VEN BY THE LD CIT(E) FOR ALLEGING THAT UNDUE BENEFIT IS PROVIDED TO THE TRUSTEES OR THAT INVESTMENT IS NOT IN THE MODE SPECIFIED U/S 11(5) I S ONLY ON SURMISES AND CONJECTURES AND AS PER HIS SUBJECTIVE SATISFACT ION WITHOUT APPRECIATING THE EXPLANATION GIVEN BY THE ASSESSEE AS TO HOW THE SAME IS FOR THE OBJECT OF THE TRUST. ON EACH OF THE ISSU ES RAISED BY THE CIT(E), THE LD AR SUBMITTED AS UNDER:- RENT PAYMENT IN RESPECT OF PROPERTY 219/5, SARDARPU RA, UDAIPUR:- THIS PREMISE IS OWNED BY TRUSTEES SHRI SANGAM MISHR A AND SMT. LILY MISHRA. THE LEFT PORTION OF THIS PLOT BELONGS TO SM T. LILY MISHRA AND RIGHT PORTION OF THIS PLOT BELONGS TO SHRI SANGAM MISHRA. ON THE LEFT HALF OF THIS PLOT, A BUILDING IS CONSTRUCTED COMPRISING OF BASEMENT, GROUND FLOOR, FIRST FLOOR AND SECOND FLOOR. THIS PROPERTY IS ADJACENT TO SARDARPURA SCHOOL, UDAIPUR HAVING COMMON BOUNDARY W ALL WITH OPENING TO THE SCHOOL. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 13 THIS PROPERTY WAS TAKEN ON RENT BY THE ASSESSEE SOC IETY LONG BACK. AS PER LEASE DEED DATED 26.03.-2009, THE MONTHLY RENT OF THIS PROPERTY W.E.F. 01.04.2008 WAS FIXED AT RS.25,000/- EACH TO SHRI SANGAM MISHRA AND SMT. LILY MISHRA FOR A PERIOD OF FIVE YEAR WITH A CONDITION TO INCREASE THE RENT AT THE RATE OF 10% PER YEAR. ACCO RDINGLY, THE RENT WAS PAID TO BOTH THE TRUSTEES FROM FINANCIAL YEAR 2008- 09 AND ONWARD. DURING THE YEAR, ASSESSEE SOCIETY GOT DETERMINED TH E FAIR RENT OF THE PREMISES FROM THE REGISTERED VALUER. THE REGISTERED VALUER HAS DETERMINED THE FAIR RENT OF THE LEFT PART OF THIS P LOT AT RS. 6.53 LAKHS PER ANNUM AND THE RIGHT PART OF THIS PLOT AT RS. 2.61 LAKHS PER ANNUM AGGREGATING TO RS. 9.14 LAKHS AGAINST WHICH ASSESSE E HAS PAID RENT OF RS. 4.80 LAKHS TO SMT. LILY MISHRA AND RS .2.28 LAK HS TO SHRI SANGAM MISHRA AGGREGATING TO RS. 7.08 LAKHS. THUS, THE REN T PAID OF THIS PREMISES IS REASONABLE. THE ABOVE PROPERTY IS TAKEN BY THE SOCIETY ON RENT FOR CARRYING OUT ITS OBJECT. AS STATED ABOVE, THIS PROPERTY IS SITUATED JUST ADJACENT TO ITS SCHOOL AT SARDARPURA, UDAIPUR. THE BASEMENT OF THIS PREMISE IS USED BY THE SOCIETY FOR RUNNING COMPUTER LAB AND LIBRARY OF THE SCHOOL AND THIS FACT IS ALSO VERIFIED BY THE INSPECTOR OF THE DEPAR TMENT. THE GROUND FLOOR IS PROVIDED TO SHRI SANGAM MISHRA AS RENT FRE E ACCOMMODATION. THE PERQUISITE VALUE OF RENT FREE ACCOMMODATION HAS BEEN CONSIDERED WHILE DEDUCTING TAX AT SOURCE ON SALARY OF SHRI SAN GAM MISHRA AS PER FORM 16 (SALARY CERTIFICATE) SHOWING VALUATION OF R ENT FREE ACCOMMODATION. SHRI SANGAM MISHRA IS MANAGING THE E NTIRE AFFAIRS OF ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 14 THE SOCIETY AND THEREFORE HE HAS BEEN PROVIDED RENT FREE ACCOMMODATION BY THE SOCIETY WHICH IS REASONABLE. T HE FIRST FLOOR OF THE PREMISES IS USED FOR HOLDING MEETINGS AND STAY OF P RINCIPALS/ STAFF MEMBER OF VARIOUS SCHOOLS WHO ARE REQUIRED TO VISIT UDAIPUR FROM TIME TO TIME FOR THE WORK OF SOCIETY. THE SECOND FLOOR O F THE PREMISES IS USED AS STORAGE OF THE SCHOOL RECORDS, TROPHIES, IMPORTA NT DOCUMENT AND OTHER ITEMS. THE OBSERVATION OF THE INSPECTOR THAT THE FIRST AND SECOND FLOOR IS ONLY USED FOR RESIDENCE OF SHRI SANGAM MIS HRA AND HIS FAMILY IS INCORRECT. A REQUEST WAS MADE TO THE CIT(E) TO GET THESE FACTS VERIFIED BUT STILL NO ACTION IS TAKEN. THE LD. CIT(E) HAS INCORRECTLY OBSERVED THAT ONLY B ASEMENT IS USED BY THE ASSESSEE SOCIETY AS COMPUTER LAB AND THE REMAIN ING WHOLE PROPERTY IS USED FOR THE RESIDENCE OF THE TRUSTEE. HE IGNORE D THE FACT THAT ONLY GROUND FLOOR IS USED FOR RESIDENCE. THE FIRST FLOOR IS USED FOR HOLDING MEETINGS AND ACCOMMODATION OF PRINCIPAL/STAFF OF VA RIOUS SCHOOLS WHO VISIT UDAIPUR FROM TIME TO TIME FOR THE WORK OF THE TRUST AND THE SECOND FLOOR IS USED AS STORAGE FOR SCHOOL RECORDS, TROPHI ES, IMPORTANT DOCUMENTS, ETC. THOUGH THE LD. CIT(E) ACCEPTS THAT ON THE SECOND FLOOR, FILES AND OTHER DOCUMENTS OF THE TRUST ARE K EPT BUT STILL WITHOUT ANY ENQUIRY AS REQUESTED BY THE ASSESSEE, HE CONCLU DED THAT ARGUMENTS OF THE ASSESSEE IS ONLY AN EYE WASH AND IT CANNOT B E SAID THAT THE COMPLETE FLOOR HAS BEEN USED BY THE TRUST EXCLUSIVE LY. FURTHER, THE ADJACENT OPEN SPACE IS USED FOR PARKING OF THE CAR/ BUSES OF THE SOCIETY AND THEREFORE, WITHOUT ANY ENQUIRY, HIS OBSERVATION THAT ASSESSEE IS SILENT ABOUT USE OF FIRST FLOOR AND GARDEN/PARKING AREA IS MISCONCEIVED. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 15 THE LD. CIT(E) HAS FURTHER OBSERVED THAT THOUGH SH. SANGAM MISHRA HAS INCLUDED RS.1,85,398/- IN HIS RETURN OF INCOME ON ACCOUNT OF RENT FREE ACCOMMODATION PROVIDED BY THE TRUST BUT HE INC ORRECTLY ASSUMED THAT HE IS UTILISING 2/3 RD PART OF THE PREMISES AND THEREFORE, RS. 4,72,000/- SHOULD HAS BEEN TAXED IN HIS HANDS. THES E OBSERVATIONS ARE SUPERFLUOUS AS THE VALUATION OF RENT FREE ACCOMMODA TION IS REQUIRED TO BE DONE AS PER SECTION 17 AS PER RULE 3(1) OF INCOM E TAX RULES. IN ANY CASE, ONCE IT IS ACCEPTED THAT ASSESSEE HAS PROVIDE D RENT FREE ACCOMMODATION TO THE TRUSTEES AND THE SALARY PAID T O HIM IS ACCEPTED, THE PERQUISITE VALUE IS TO BE DETERMINED AS PER RUL ES AND NOT IN THE MANNER IN WHICH IT IS PROJECTED BY THE LD. CIT(E). FROM THE ABOVE DISCUSSION, IT IS ESTABLISHED THAT A SSESSEE SOCIETY HAS PAID RENT TO THE TRUSTEE IN LIEU OF THE PREMISE BEI NG USED FOR ITS ACTIVITY, THE RENT PAID IS REASONABLE AND THEREFORE NO UNDUE BENEFIT IS PASSED ON TO THE TRUSTEE. HERE IT IS PERTINENT TO MENTION THA T IN EARLIER YEARS, THE RENT SO PAID HAS BEEN ACCEPTED AS REASONABLE IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT. RENT PAYMENT OF RS. 3,99,600/- IN RESPECT OF PROPER TY 12/493, INDIRA NAGAR, SECTOR 9, LUCKNOW: THIS PREMISE IS OWNED BY MS. PRIYAKANKSHA MISHRA, D AUGHTER OF SHRI SANGAM MISHRA, TRUSTEE. THE PLOT AREA OF THIS PROPE RTY IS 288 SQ. MTR I.E. 3099 SQ. FT. ON THIS PLOT, A BUILDING IS CONST RUCTED COMPRISING OF GROUND FLOOR AND FIRST FLOOR HAVING CONSTRUCTED ARE A OF 1754 SQ. FT. THIS PROPERTY IS IN FRONT OF INDIRA NAGAR, LUCKNOW SCHOO L OF THE SOCIETY. THIS ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 16 PREMISE IS USED FOR PROVIDING RESIDENCE FACILITY TO ONE OFFICE STAFF MR. VINAY PATHAK AND USED FOR STAY OF TRUSTEES/ PRINCIP ALS AND OTHER SENIOR STAFF MEMBERS WHEN THEY VISIT LUCKNOW FOR MONITORIN G THE ACTIVITIES OF THE SCHOOL, THUS, SAVING THE COST THAT WOULD HAVE B EEN INCURRED HAD THEY STAYED IN THE HOTEL. THIS PROPERTY WAS TAKEN ON RENT BY THE ASSESSEE SOC IETY W.E.F. 01.04.2009 AT A MONTHLY RENT OF RS. 25,000/- WITH I NCREASE OF RENT AT THE RATE OF 10% PER YEAR. ACCORDINGLY, THE RENT WAS PAID TO HER FROM FINANCIAL YEAR 2009-10 AND ONWARD. THEREAFTER, A LE ASE DEED DATED 19.10.2012 WAS EXECUTED TO BE EFFECTIVE FROM 01.04. 2012 WHEREBY THE FAIR RENTAL VALUE OF THE PREMISES WAS DETERMINED FR OM THE REGISTERED VALUER AT RS. 38,500/- PER MONTH AGAINST WHICH ASSE SSEE HAS PAID RENT AT THE RATE OF RS. 33,300/- PER MONTH IN THE FINANC IAL YEAR 2012-13. THE LD. CIT(E) HAS DOUBTED THE RENT AGREEMENT FOR T HE REASON THAT IT IS NOT NOTARISED OR WITNESSED AND NOT FURNISHED DURING THE ASSESSMENT PROCEEDINGS UPTO 31.03.2016. THE PREMISE IS NOT IN FRONT OF THE SCHOOL AS CONTENDED BY THE ASSESSEE, THE VALUATION REPORT IS UNDATED AND NO SUPPORTING EVIDENCE FOR UTILIZATION OF THE SAID PRO PERTY FOR THE OBJECT OF THE TRUST HAS BEEN FURNISHED. IN THIS CONNECTION IT IS SUBMITTED THAT ONLY BECAUS E THE LEASE DEED IS NOT NOTARISED/WITNESSED CANNOT BE VIEWED ADVERSELY MORE PARTICULARLY WHEN IT IS ON A STAMP PAPER DATED 19.10.2012 AND TH E RENT PAID IN EARLIER YEARS HAVE BEEN ACCEPTED. FURTHER, THIS PRE MISE IS ON FRONT OF THE SCHOOL OF THE ASSESSEE AS IS EVIDENT FROM THE C ERTIFICATE AND THE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 17 MAP BEING PRODUCED BEFORE THE HONBLE BENCH. NON DA TING THE VALUATION REPORT HAS NO EFFECT WHEN THE VALUER HAS SPECIFIED IN THE REPORT THAT THE PROPERTY WAS INSPECTED BY HIM ON 06 .03.2012 TO ASSESS THE RENTAL VALUE AS ON 10.04.2012. THE USER OF THE PROPERTY FOR THE ACTIVITY OF THE SOCIETY MENTIONED. IN FACT THE LD. CIT(E) HAS NOT RAISED ANY QUERY ABOUT HIS DOUBTS IN THE PRESENT PROCEEDIN GS, OTHERWISE THE SAME WOULD HAVE BEEN CLARIFIED THEN AND THERE AND T HEREFORE, THE OBJECTION RAISED BY HIM IN THIS REGARD IS ON SURMIS ES AND CONJECTURES. FROM THE ABOVE DISCUSSION, IT IS ESTABLISHED THAT A SSESSEE SOCIETY HAS PAID RENT TO MS. PRIYAKANKSHA MISHRA, DAUGHTER OF T RUSTEE IN LIEU OF THE PREMISE BEING USED FOR ITS ACTIVITY, THE RENT PAID IS REASONABLE AND THEREFORE NO UNDUE BENEFIT IS PASSED ON TO THE TRUS TEE. HERE IT IS PERTINENT TO MENTION THAT IN EARLIER YEARS, THE REN T SO PAID HAS BEEN ACCEPTED AS REASONABLE IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT. 3.2 TRAVELLING EXPENSES: FINDINGS OF LD CIT(E): THE FINDINGS OF LD CIT(E) WHICH ARE UNDER CHALLENGE BEFORE US ARE AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SUPPOR TING DOCUMENTS IN RESPECT OF TRAVELLING EXPENSES CLAIMED WERE CALLED FOR AND IT HAS BEEN OBSERVED THAT THE PAYMENT MADE TO M/S BLUE CHIP SER VICES ARE RELATED TO TRAVEL PERFORMED BY SH. SANGAM MISHRA AND HIS FAMIL Y MEMBERS. PERUSAL OF DETAILS PRODUCED OF TRAVELLING EXPENSES, IT HAS ALSO BEEN GATHERED THAT ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 18 FAMILY MEMBERS OF SH. SANGAM MISHRA, MS. PRIYAKANKS HA MISHRA AND MR. ARYAN MISHRA HAD ALSO PERFORMED TRAVEL BY AIR FOR V ARIOUS PLACES DURING THE FINANCIAL YEAR 2012-13 FOR WHICH EXPENDITURE WA S INCURRED BY THE TRUST. SOME OF THEM ARE AS UNDER FOR READY REFERENC E: SI. NO, DATE BILL NO. SECTOR PASSENGER FLIGHT NO. FLT DT. NET AMOUNT 1 07.02.2013 4011387 DEL- UDR PRIYAKANKSHA 9W0707 13.02.13 6351 2 07.02.2013 4011391 LKO- DEL PRIYAKANKSHA A10812 12.02.13 5155 3 12.02.2013 4011601 LKO- DEL ARYAN MISHRA A1812 12.02.13 12761 4 12.02.2013 4011612 DEL-JAI ARYAN MISHRA 9W0725 13.02.13 5668 5 14.12.2012 4009237 BOM- LKO PRIYAKANKSHA A10625 15.12.12 8419 6 17.12.2012 4009352 LKO- DEL PRIYAKANKSHA 6E 309 17.12.12 4838 7 03.11.2012 4007893 JFK-DEL PRIYAKANKSHA A10102 14.11.12 49773 8 30.11.2012 4008676 DEL- UDR PRIYAKANKSHA A10471 01.12.12 5383 9 06.12.2012 4008907 UDR- BOM PRIYAKANKSHA 9W2074 10.12.12 5519 THE TRUST HAS NOT FURNISHED ANY JUSTIFICATION IN R ESPECT OF JOURNEY PERFORMED BY MS. PRIYAKANKSHA MISHRA AND MR. ARYAN MISHRA WHO ARE THE FAMILY MEMBER OF SH. SANGAM MISHRA TO THE USA ( MENTIONED AT SL. NO. 7-JFK-DEL) AND MUMBAI ( MENTIONED AT SL. NO. 5 AND 9), THE TRUST HAS NOT FURNISHED DETAILED REASONS OF JOURNEY, SUPP ORTING DOCUMENTS OF JOURNEY ETC. AND FURTHER COULD NOT JUSTIFY THAT IN WHAT CAPACITY MS. PRIYAKANKSHA MISHRA AND MR. ARYAN MISHRA HAD PERFOR MED JOURNEYS, EXPENSES FOR WHICH WERE PAID BY THE ASSESSEE TRUST. IT SHOWS THAT THEY WENT TO USA AND VARIOUS PLACES FOR THEIR PERSONAL P URPOSES IN THEIR ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 19 PERSONAL CAPACITY AND NOT FOR THE TRUST PURPOSES AN D THEY HAVE DEBITED THEIR PERSONAL EXPENSES IN TRUSTS ACCOUNTS IN VARI OUS NAMES LIKE TRAVELLING EXPENSES, SOCIAL WELFARE EXPENSES ETC. FROM THE ABOVE DISCUSSION, IT APPEARS THAT THE TRUS T FUNDS ARE UTILIZED FOR TRUSTEES AND THEIR FAMILY TO CATER TO THEIR LUX URIOUS LIFE. A/R WAS ASKED TO SHOW CAUSE IN THIS REGARD. IN RESPONSE, RE PLY VIDE LETTER DATED 28.09.2016 WAS SUBMITTED BUT NOT FOUND TENABLE IN VIEW OF THE DISCUSSION MADE AS UNDER:- THE CLAIM OF THE TRUST IS THAT THE A COURSE IN DRAM ATIC IN NYFA ( NEW YORK FILM ACADEMY) IS FOR SKILL DEVELOPMENT OF A PA RTICULAR EMPLOYEE [HERE THIS EMPLOYEE IS NO ONE BUT DAUGHTER OF CHAIR MAN OF TRUST, THEREFORE COVERED U/S 13(3)] SO THAT THE SKILLS DE VELOPMENT BY HER CAN BE USED FOR ORGANIZING VARIOUS SOCIAL & CULTURAL PR OGRAMMES IN THE SCHOOLS RUN BY THE TRUST. THE CONTENTION THAT HER S KILL DEVELOPMENT WILL HELP TO PROMOTE EDUCATION AND WILL HELP THE SCHOOLS IN VARIOUS WAYS IS ALSO NOT ACCEPTABLE. AS MANY OTHER ACTIVITIES LIK E TRAVELLING IS ITSELF AN EDUCATION BECAUSE AS A RESULT OF TRAVELLING YOU ACQ UIRE FRESH KNOWLEDGE, LIKEWISE IF YOU SEE PICTURES, VISIT ART GALLERIES Y OU THEREBY ADD TO YOUR KNOWLEDGE, IF YOU VISIT A NIGHT CLUB, YOU GET ACQUA INTED WITH AND ADD TO YOUR KNOWLEDGE. BUT ALL THESE ABOVE ACTIVITIES CANN OT BE TANTAMOUNT TO EDUCATION AS DEFINED IN SECTION 2(15) OF THE I.T, A CT, 1961. THE RELIANCE IN THIS REGARD HAS BEEN PLACED ON THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS MAHARAJA SAWAI MAN SINGH JI MESEUM TRUST (1988) 169 ITR 379 (RAJ.) WHEREIN IT WAS HELD THAT THE WORD EDUCATION HAS NOT BEEN USED IN THAT WIDE AND EXTE NDED SENSE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 20 ACCORDING TO WHICH, ACQUISITION OF FURTHER KNOWLEDG E CONSTITUTE EDUCATION FINDING SUPPORT OF THE ABOVE JUDGMENT, EXPENDITURE INCURRED IN RELATION TO A COURSE IN DRAMATIC IN NYFA ( NEW YORK FILM ACA DEMY) FOR PERSONAL SKILL DEVELOPMENT OF A PARTICULAR EMPLOYEE CANNOT B E TREATED AS EXPENDITURE FOR EDUCATIONAL PURPOSES. SIMILARLY, WI TH REGARD TO BOMBAY VISIT OF MS. PRIYAKANKSHA MISHRA, A/R HAS JUST SUB MITTED THAT HER TRAVEL TO MUMBAI IS TO GET AN INSIGHT TO LATEST DEVELOPMEN T IN THE FIELD OF EDUCATION SO THAT SAME CAN BE IMPLEMENTED IN THE VA RIOUS SCHOOLS RUN BY TRUST, BUT NOT SUPPORTED ITS SUBMISSION WITH ANY DOCUMENTARY EVIDENCES. WITHOUT ANY DOCUMENTARY EVIDENCES, THE S UBMISSION REMAINED AN AFTERTHOUGHT ONLY WHICH SERVES NO PURPO SE IN SUPPORT. AS EVIDENT THAT MS. PRIYAKANKSHA MISHRA WENT TO USA AN D MUMBAI FOR HER PERSONAL PURPOSES IN HER PERSONAL CAPACITY AND NOT FOR THE TRUST PURPOSES AND ASSESSEE TRUST DEBITED HER PERSONAL EX PENSES IN TRUSTS ACCOUNTS IN THE NAME OF SKILL DEVELOPMENT AND UPDAT ING THE EMPLOYEES REGARDING LATEST DEVELOPMENT IN THE FIELD OF EDUCA TION FOR BETTERMENT OF SCHOOL PROGRAMMES ETC. SIMILARLY, WITH REGARD TO THE JOURNEY MADE BY MR. AARYAN MISHRA, THE ASSESSEE TRUST HAS FAILED TO SUBSTANTIATE ITS C LAIM WITH ANY DOCUMENTARY EVIDENCE THAT HE WAS SENT TO LUCKNOW FO R PARTICIPATION IN CULTURAL PROGRAMME OF THE INDIRA NAGAR SCHOOL, LUCK NOW. THE TRUST HAS NOT FURNISHED DETAILED REASONS OF JOURNEY, SUPPORTI NG DOCUMENTS OF JOURNEY ETC. FROM THE ABOVE DISCUSSION, IT APPEARS THAT THE TRU ST FUNDS ARE UTILIZED FOR TRUSTEES AND THEIR FAMILY TO CATER THE IR LUXURIOUS LIFE. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 21 IN VIEW OF ABOVE, IT IS ESTABLISHED THAT THIS VIOL ATION ATTRACTS PROVISO 13 OF SECTION 10(23C)(VI) R.W. SUB-CLAUSE ( A) OF 3 RD PROVISO OF SECTION 10(23C)(VI) OF THE I.T. ACT, 1961. ASSESSEES CONTENTIONS: PER CONTRA, THE LD AR SUBMITTED THAT MS. PRIYAKANKS HA MISHRA IS POST GRADUATE IN MASS COMMUNICATION & WORKING AS ADMINIS TRATOR OF THE SOCIETY SINCE JULY, 2005 AND IS PAID SALARY SINCE T HEN. IN FINANCIAL YEAR 2012-13, SHE WAS PAID SALARY OF RS. 4,28,572/-. SAL ARY PAID TO HER IN EARLIER YEAR HAS BEEN ACCEPTED BY THE DEPARTMENT. S HE TRAVELS TO THE VARIOUS SCHOOLS OF THE SOCIETY FOR MANAGING THE ADM INISTRATION, LITERARY, CULTURAL, SPORTS & GAMES ACTIVITIES AND THEREFORE H ER TRAVEL IS FOR THE PURPOSE OF SOCIETY. HER TRAVEL TO MUMBAI IS TO GET AN INSIGHT TO LATEST DEVELOPMENT IN THE FIELD OF EDUCATION SO THAT SAME CAN BE IMPLEMENTED IN THE VARIOUS SCHOOLS RUN BY SOCIETY. IN THIS TRAVEL SHE VISITED MANY SCHOOLS LIKE JB PANT HIGH SCHOOL FOR GIRLS, JAMNA BAI NURSERY SCHOO L, SEVEN SQUARE ACADEMY, ETC. TO GET AN EXPOSURE TOWARDS THE EVOLVI NG METHODS OF EDUCATION SO THAT THE SAME CAN BE IMPLEMENTED IN TH E SCHOOLS RUN BY THE ASSESSEE SOCIETY. SO FAR AS HER TRAVEL ON 03-11 -2012 FROM JKFDELHI IS CONCERNED, THE SOCIETY HAS SENT HER TO USA TO UN DERGO A COURSE IN DRAMATIC IN NYFA (NEW YORK FILM ACADEMY) SO THAT TH E SKILLS DEVELOPED BY HER CAN BE USED FOR ORGANIZING VARIOUS SOCIAL & CULTURAL PROGRAMMES IN THE SCHOOL RUN BY THE SOCIETY. ONLY FARE WAS REI MBURSED BY THE SOCIETY. THEREFORE, TRAVELLING EXPENSES INCURRED BY THE SOCIETY ON TRAVEL ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 22 OF PRIAKANSHA MISHRA CANNOT BE HELD TO BE THE PERSO NAL EXPENSES OF THE TRUSTEE. SO FAR AS TRAVELLING EXPENSES OF ARYAN MISHRA IS CO NCERNED, HE IS GRANDSON OF THE UNCLE OF DR. SANGAM MISHRA. HE DOES NOT FALL IN THE DEFINITION OF RELATIVE U/S 2(41) & 13(3) OF THE ACT . HE WAS SENT TO LUCKNOW FOR PARTICIPATION IN CULTURAL PROGRAMME OF THE INDIRA NAGAR SCHOOL, LUCKNOW. HENCE, THE TRAVEL EXPENSES ARE FOR THE PURPOSE OF THE SOCIETY AND NOT FOR THE PERSONAL PURPOSE AS SPECIFI ED PERSON U/S 2(41)/ 13(3) OF THE ACT. THE LD. CIT(E) HAS PRESUMED THAT SUCH TRAVEL BY PRI YAKANKSHA MISHRA IS FOR HER PERSONAL PURPOSE AND NO DOCUMENTARY EVIDENC E THAT MR. ARYAN MISHRA WAS SENT TO LUCKNOW FOR PARTICIPATION IN CUL TURAL PROGRAMME OF THE INDIRA NAGAR SCHOOL AT LUCKNOW WAS FURNISHED. T HESE OBSERVATIONS ARE ON SURMISES AND CONJECTURES. IT IS NOT IN DISPU TE THAT PRIYAKANKSHA MISHRA IS WORKING AS ADMINISTRATOR OF THE SOCIETY S INCE JULY, 2005 AND SALARY PAID TO HER IS ACCEPTED. THEREFORE, TRAVEL M ADE BY HER TO VARIOUS PLACES LIKE UDAIPUR, DELHI, LUCKNOW, JAIPUR, MUMBAI CANNOT BE SAID TO BE FOR PERSONAL PURPOSE. IN RESPECT OF HIS VISIT TO USA, THE OBSERVATION MADE BY LD. CIT(E) IS ONLY THEORETICAL. MR. ARYAN M ISHRA IS NOT A PERSON COVERED U/S 13(3). IN VIEW OF ABOVE, THE FINDING OF CIT(E) THAT THE FU NDS OF THE TRUST ARE UTILIZED FOR THE TRUSTEE AND THEIR FAMILY MEMBERS T O CATER THEIR LUXURIOUS LIFE IS MISCONCEIVED AND ON THIS ACCOUNT IT CANNOT BE HELD THAT ANY UNDUE BENEFIT HAS BEEN PROVIDED TO THE TRUSTEE OR T HEIR FAMILY MEMBERS. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 23 3.3 FUNDS ARE NOT KEPT IN THE FORM OR MODES SPECIFI ED IN SUB- SECTION (5) OF SECTION 11 OF THE INCOME TAX ACT, 19 61 FINDINGS OF LD CIT(E): A PERUSAL OF LEDGER ACCOUNTS OF M/S SALUJA CONSTRUC TION IN RESPECT OF VARIOUS SCHOOLS OF THE TRUST PRODUCED DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, IT IS REVEALED THAT THERE WERE OPENING BALANCES SHOWN IN THESE ACCOUNTS AND THE TRUST HAS ALSO GIVEN ADVANCE S TO THIS COMPANY DURING THE YEAR UNDER CONSIDERATION. THE DETAILS AR E AS UNDER:- SR. NO. NAME OF SCHOOL OPENING BALANCE ADVANCES GIVEN DURING THE F.Y. 2012- 13 ADVANCES GIVEN IN F.Y. 13-14 DATE OF TRANSFER THE ENTRY IN THE NAME OF SCHOLARS EDUCATION AMOUNT OF TRANSFER 1. CENTRAL ACADEMY, HIRAN MAGRI 40,00,000 30,00,000 - 31.03.2014 70,00,000 2. CENTRAL ACADEMY, CHITTORGARH 10,00,000 - 20,00,000 31.03.2014 30,00,000 3. CENTRAL ACADEMY, BAPU NAGAR, BHILWARA. 15,00,000 - 20,00,000 31.03.2014 35,00,000 5. CENTRAL ACADEMY, SARDAROURA 15,00,000 50,00,000 - 31.03.2014 65,00,000 6. CENTRAL ACADEMY, INDIRA NAGAR 1,05,00,000 49,80,000 - - 1,54,80,000 ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 24 SIMILAR OBSERVATION WAS MADE IN RESPECT OF OTHER P ARTIES ALSO. THE DETAILS ARE AS UNDER:- SR. NO. NAME OF PARTY NAME OF SCHOOL OPENING BALANCE ADVANCES GIVEN DURING THE F.Y. 2012-13 ADVANC ES GIVEN IN F.Y. 13- 14 DATE OF TRANSF ER THE ENTRY IN THE NAME OF SCHOLARS EDUCATION TRUST OF INDIA AMOUNT OF TRANSFER 1. SHREE SALASAR OVERSEAS PVT. LTD. CENTRAL ACADEMY, HIRAN MAGRI 5,00,000 - - 31.03.2014 5,00,000 2. SHREE SALASAR OVERSEAS PVT. LTD. CENTRAL ACADEMY, SARDARPURA 15,00,000 - - 31.03.2014 15,00,000 3. SHALU CONSTRUCTION, NEW DELHI CENTRAL ACADEMY, CHITTORGARH 10,00,000 - - - - 4. SHALU CONSTRUCTION NEW DELHI CENTRAL ACADEMY, SARDARPURA 10,00,000 - - - - 5. SHALU CONSTRUCTION NEW DELHI CENTRAL ACADEMY, INDIRA NAGAR 10,00,000 - - - - THE TRUST HAS NOT FURNISHED ANY VALID REASONS IN RE SPECT OF ADVANCE GIVEN TO ABOVE MENTIONED PARTIES. HOWEVER, THE TRUS T HAS CREDITED THE SAME AMOUNT IN THE LEDGER OF M/S SALUJA CONSTRUCTIO N AND IN THE LEDGER OF OTHER PARTIES BY TRANSFER THE ENTRY ON 31.03.201 4 IN EVERY ACCOUNT. IT IS FURTHER NOTICED THAT AGAINST THESE ADVANCES GIVE N, THE TRUST HAS NOT RECEIVED ANY RECIPROCAL BENEFIT. THE TRUST HAS NOT FURNISHED ANY ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 25 JUSTIFICATION IN RESPECT OF INTEREST FREE ADVANCES MADE TO M/S SALUJA CONSTRUCTION PVT. LTD. AND OTHER PARTIES MENTIONED ABOVE. THE ASSESSEE HAD MADE ADVANCES TO THESE PARTIES WIT HOUT ANY JUSTIFICATION. THE AFOREMENTIONED ACCOUNTS HAVE NOT YET BEEN SETTLED. AS THE FUNDS OF THE TRUST HAVE BEEN MISUSED THIS HA S CAUSED LOSS OF INTEREST TO THE TRUST ON THE FUNDS DIVERTED. VIDE S HOW CAUSE DATED 01.09.2016, A/R WAS ASKED TO JUSTIFY THE SAME. IN R ESPONSE REPLY VIDE REPLY DATED 28.09.2016 AND 07.10.2016 SUBMITTED AS UNDER:- ADVANCE TO OF M/S SALUJA CONSTRICTION - THE VARIOUS SCHOOLS OF THE TRUST HAVE GIVEN ADVANCE TO SALUJA CONSTRICTION PVT. LTD. , NEW DELHI IN EARLIER YEARS AND ALSO IN FY 13-14 AGGREGATING TO RS. 3,54, 80,000/-. THE TRUST HAS PURCHASED A FLAT AT SAFDARJUNG ENCLAVE, NEW DEL HI FROM SALUJA CONSTRUCTION PVT. LTD. FOR WHICH A SALE DEED IS EXE CUTED ON 20.11.2013. COPY OF SALE DEED IS ENCLOSED.ACCORDINGLY, THE AMOU NT GIVEN BY VARIOUS SCHOOLS WAS TRANSFERRED TO THE ACCOUNT OF THE TRUST WHERE IT IS CAPITALIZED AS FIXED ASSETS. REGARDING USE OF FLAT AT NEW DELHI, IT IS SUBMITTED THAT THIS FIAT IS USED AS A GUEST HOUSE FOR THE TRUST. VARIOUS STAFF MEMBERS AN D TRUSTEES STAY IN THE FLAT WHENEVER THEY VISIT DELHI FOR CBSE WORK, TRAINING P ROGRAMME, CONFERENCES& OTHER ALLIED WORK BESIDES THIS TWO OF STAFF MEMBERS FOR CERTAIN REGULATOTY WORK ARE SITTING AT THIS OFFICE, THE ABOVE REPLY OF AR IS NOT ACCEPTABLE AS FROM THE SALE DEED AGREEMENT IT HAS BEEN NOTICED THAT THE FLAT IS SITU ATED IN VERY POSH AREA OF DELHI I.E. SAFDARJUNG, DELHI AND THE FLAT I S ACTUALLY A 3BHK WITH ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 26 ATTACHED TOILETS, ONE KITCHEN, ONE DRAWING DINING, ENTRANCE LOBBY, FAMILY LOUNGE, FRONT & REAR BALCONIES AND ALSO ENTI RE TERRACE OVER AND ABOVE THE ENTIRE THIRD FLOOR OF THE SAID PROPER TY, ONE SERVANT QUARTER WITH TOILET ON THE SAME FLOOR, 25% SHARE IN THE STILT AREA WITH RIGHT OF PARKING ONE CAR THEREIN. THESE SPECIFICATI ONS OF THE FLAT INDICATES THAT THE FLAT HAS BEEN PURCHASED FOR PERS ONAL USE OF TRUSTEE AND NOT FOR THE USE OF STAFF AS NO TRUST WILL INVES T SUCH A HIGH AMOUNT OF RS. 3,80,00,000/- FOR A FLAT WITH SUCH LUXURY FA CILITIES FOR THE STAFF PURPOSE ONLY. FURTHER THE ASSESSEE HAS NOT FURNISHE D ANY DOCUMENTARY EVIDENCES REGARDING SEMINAR/MEETINGS/ VISIT OF STAF F IN DELHI FOR WHICH THE FLAT HAS BEEN PURCHASED, AS CLAIMED. ADVANCE TO M/S SALASAR OVERSEAS PVT. LTD - ADVANCE OF RS. 35 LACS WAS GIVEN TO SALASAR OVERSEAS PVT. LTD., JAIPUR IN THE YEAR 2005 FOR THE PURCHASE OF 5044 SQ. YD. LAND AT NARAYAN VIHAR, AJM ER ROAD JAIPUR TO SET UP A SCHOOL AT JAIPUR. PROVISIONAL ALLOTMENT LE TTER WAS ISSUED ON 26.03.2011, COPY ENCLOSED. THE ABOVE REPLY IS NOT CONVINCING AS ASSESSEE HAS O NLY FURNISHED A PROVISIONAL ALLOTMENT LETTER DATED 26.03.2011 BUT I N PROVISIONAL LETTER THERE IS REFERENCE OF CONFIRMATION LETTER DATED 26. 03.2011 WHEREIN TERMS AND CONDITION OF AGREEMENT WERE MENTIONED, HO WEVER ASSESSEE HAS NOT PROVIDED COPY OF SAID LETTER. IN ABSENCE OF THE SAME IT CANNOT BE VERIFIED THAT THE SAID INVESTMENT WAS MADE FOR T HE OBJECT OF THE TRUST. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 27 THE AR WAS ASKED, VIDE ORDER SHEET ENTRY DT. 30.10. 2014 TO UPDATE THE PRESENT STATUS OF THE ABOVE SAID LAND IN SUPPORT OF ITS CLAIM THAT LAND WAS PURCHASED FOR THE PURPOSE OF TRUST. IN RESPONSE , AR SUBMITTED THAT ' REGARDING PRESENT STATUS OF THE AFORESAID PLOT OF L AND, IT IS SUBMITTED THAT THE SCHEME IS UNDER DEVELOPMENT BY T HE DEVELOPER AND CERTAIN FORMALITIES RELATING TO JDA ARE GOING O N. ALL THESE ACTIVITIES ARE REQUIRED TO BE DONE BY DEVELOPER. AF TER COMPLETION OF BASK DEVELOPMENT, TRUST IS UNDER PLANNING TO COMMEN CE THE SCHOOL AT THIS LOCATION. THE TRUST HAS APPLIED THE AFORESA ID LAND FOR SCHOOL PURPOSE. COPY OF APPLICATION FORM AND CORRESPONDENC E WITH LAND DEVELOPER IS ENCLOSED. FROM THE CORRESPONDENCE, IT IS APPARENT THAT TRUST HAS APPLIED FOR ALLOTMENT OF LAND FOR THE PUR POSE OF SCHOOL,' THIS REPLY ALSO IS NOT CONVINCING AS FROM DETAILS O F LAND AT NARAYAN VIHAR, IT IS EVIDENT THAT THE SCHEME WAS ORIGINALLY NIJI KHA TEDARI SCHEME OF AGRICULTURAL LAND AND WITHOUT CONVERTING THE STATUS OF PLOT SO PURCHASED FROM AGRICULTURAL TO INSTITUTIONAL, THE PROPERTY C ANNOT USED FOR THE OBJECT OF TRUST, THEREFORE, AR WAS ASKED TO FURNISHED DETAIL S OF FURTHER CORRESPONDING REGARDING CONVERSION OF PLOT/LAND WIT H JDA OR ANY OTHER RESPECTIVE AUTHORITY BUT ASSESSEE HAS FAILED TO SUB MIT SINGLE DOCUMENT IN THIS REGARD. ON THE NAME OF CORRESPONSING DETAILS MADE WITH 2 ND PARTY WHATEVER FURNISHED BY AR IS ALL THE RECEIPT OF PAYM ENT MADE ON VARIOUS DATE AND NOTHING ELSE. EVEN UPTO 31 ST MARCH, 2016, AFTER PASSING ALMOST 5 YEARS, NO EFFORTS/CORRESPONDING HAS BEEN MADE BY TH E ASSESSEE WITH REGARD TO SAID PLOT, WHICH SHOWS THAT THE SAID INVE STMENT WAS NEVER INTENDED TO BE USED FOR OBJECT OF TRUST. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 28 FURTHER, AS EVIDENT FROM THE LETTER DT. 26-03-2011 THAT PROVISIONAL ALLOTMENT WAS MADE BY THE 2ND PARTY TO THE TRUST BU T STILL TRUST HAS CONTINUED TO SHOW THE ADVANCE TO SHRI SALASAR OVERS EAS PVT. LTD. OF AMOUNTING 35 LACS UPTO 31 4 MARCH, 2013 EVEN. SPECIFIC QUERY WAS MADE TO ASSESSEE VIDE ORDER SHEET ENTRY DT. 30-10-2 013. IN RESPONSE AR SUBMITTED THAT :- REGARDING QUERY THAT PLOT NO. 61-1001 & 61-1002 NA RAYAN VIHAR, AJMER ROAD, JAIPUR HAVE BEEN HANDED OVER TO TRUST IN 2011 ITSELF THAN WHY ADVANCE IS APPEARING IN MARCH 2013 BALANCE SHEET, I T IS SUBMITTED THAT PROVISIONAL ALLOTMENT LETTER RELATING TO AFORESAID PLOT HAS BEEN ISSUED TO ASSESSEE TRUST IN 2011 ITSELF, HOWEVER DUE TO OVERS IGHT ACCOUNTING ENTRIES RELATING TO CAPITALIZATION HAVE BEEN PASSED ON 31-0 3-2014. COPY OF LEDGER ACCOUNT OF FY 2013-14 SHOWING TRANSFER OF AD VANCE AMOUNT TO FIXED ASSETS ACCOUNT IS E . ENCLOSED THE ABOVE SAID REPLY ITSELF SHOWS THAT THE SAID INV ESTMENT WAS NOT MADE FOR THE OBJECT OF TRUST THEREFORE, EVEN AFTER ALLOTMENT LETTER, THE SAID PROPERTY HAS NOT BEEN ACCOUNTED FOR IN THE RES PECTIVE YEAR ENDED BALANCE SHEET AND THE EXCUSE MADE BY AR I.E. 'DUE T O OVERSIGHT ACCOUNTING ENTRIES' IS NOTHING BUT AN AFTERTHOUGHT ONLY. ADVANCE TO OF M/S SHALU CONSTRUCTION- THE ASSESSEE ALSO MADE ADVANCE OF RS. 30 LACS TO M/S SHALU CONSTRUCTION. IN REPLY TO QUERY THE ASSESSEE SUBMITTED- ' THE ASSESSEE ALSO MADE ADVANCE OF RS, 30 LACS TO M/ S SHALU CONSTRUCTION, NEW DELHI IN THE YEAR 2009- 2010 TOWA RDS PURCHASE OF FLAT AT NEW DELHI. HOWEVER, BECAUSE OF DELAY, THE BUILDE R DID NOT GIVE THE FLAT IN TIME AND THEREFORE THE TRUST PURCHASED THE FLAT FROM M/S SALUJA CONSTRUCTION PVT. LTD. AS STATED ABOVE. TRUST IS NE GOTIATING WITH THE BUILDER FOR A REFUND OF AMOUNT.' ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 29 THE SUBMISSION OF AR IS NOT ACCEPTABLE AS ASSESSEE HAS NOT FURNISHED SINGLE DOCUMENTARY EVIDENCES EITHER WITH RESPECT TO ORIGINAL AGREEMENT OR WITH REGARD TO CANCELLATION OF DEED. F URTHER, AS CLAIMED BY THE AR THAT TRUST IS NEGOTIATING WITH THE BUILDE R FOR A REFUND OF AMOUNT. NO DETAILS OF CORRESPONDING MADE WITH SHALU CONSTRUCTION HAS BEEN FURNISHED ON RECORD. ALL THESE FACTS SUGGE ST THAT THE ADVANCE WAS GIVEN FOR THE PERSONAL INVESTMENT OF TH E TRUSTEE AND NOT FOR OBJECT OF THE TRUST, AND IN THIS MANNER FUNDS O F THE TRUST WAS SIPHONED FOR THE BENEFIT OF TRUSTEES. THE ASSESSEE HAS NOT FURNISHED ANY VALID REASONS IN RESPECT OF THESE ADVANCE GIVEN. IT IS FURTHER NOTICED THAT AGAINST T HE ADVANCES GIVEN, THE ASSESSEE TRUST HAS NOT RECEIVED ANY RECIPROCAL BENEFIT. THE ASSESSEE HAS NOT FURNISHED ANY JUSTIFICATION IN RES PECT OF INTEREST FREE ADVANCES MADE TO THESE PARTIES. THE ASSESSEE H AD MADE ADVANCES TO THESE PARTIES WITHOUT ANY JUSTIFICATION FOR ACHIEVING THE OBJECTS OF THE TRUST. THE AFOREMENTIONED ACCOUNTS H AVE NOT YET BEEN SETTLED. FROM ALL THE ABOVE FACTS, IT IS CLEAR THAT ALL THE SUBMISSION MADE THE ASSESSEE IN RESPECT OF THIS ADVANCE IS NOTHING BUT AN AFTERTHOUGHT ONLY. IT IS ACTUALLY SIPHONING OF THE FUNDS OF THE TRUST FOR PERSONAL BENEFIT OF THE TRUSTEES AND THE FUNDS OF THE TRUST HAVE BEEN MISUSED. AS THIS ADVANCE WAS MADE NOT AS PER THE OBJECTS OF THE TRUST AND FURTHER REMAINED UNVERIFIABLE THEREFORE, IT IS HELD THAT THESE ARE THE INVESTMENTS WHICH ARE NOT IN THE PRESCRIBED MODES AS PER SECTION 11(5) AND IT ATTRACTS PROVISO 13 OF SECTION 10(23C) (VI) R.W. SUB- CLAUSE (B) OF 3 RD PROVISO OF SECTION 10(23C) (VI) OF THE I.T. ACT, 1 961. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 30 ASSESSEES CONTENTIONS: PER CONTRA, ON EACH OF THE THREE MATTERS, THE LD AR HAS SUBMITTED AS UNDER: ADVANCE TO SALUJA CONSTRUCTION PVT. LTD: THE VARIOUS SCHOOL OF THE SOCIETY HAVE GIVEN ADVANCE TO SALUJA CONSTRUCTION P VT LTD., NEW DELHI IN EARLIER YEARS AND ALSO IN FY 13-14 AGGREGATING TO R S. 3,54,80,000/-. THE SOCIETY HAS PURCHASED A FLAT AT SAFDARJUNG ENCLAVE, NEW DELHI FROM SALUJA CONSTRUCTION PVT. LTD. FOR WHICH A SALE DEED IS EXECUTED ON 20.11.2013. ACCORDINGLY, THE AMOUNT GIVEN BY VARIOU S SCHOOLS WAS TRANSFERRED TO THE ACCOUNT OF THE SOCIETY WHERE IT IS CAPITALIZED AS FIXED ASSETS. THIS FLAT IS USED AS GUEST HOUSE OF THE SOC IETY. VARIOUS STAFF MEMBERS & TRUSTEE WHENEVER VISIT DELHI FOR CBSE WOR K, TRAINING PROGRAMME, CONFERENCES & OTHER ALLIED WORK STAY IN THE FLAT. BESIDES THIS TWO STAFF MEMBERS FOR CERTAIN REGULATORY WORK ARE SITTING AT THIS OFFICE. THE LD. CIT(E) OBSERVED THAT SPECIFICATION OF THE F LAT IN THE SALE DEED INDICATES THAT THE FLAT HAS BEEN PURCHASED FOR PERS ONAL USE OF TRUSTEE AND NOT FOR THE USE OF STAFF AS NO TRUST WILL INVES T SUCH HIGH AMOUNT FOR FLAT WITH SUCH LUXURY FACILITIES FOR THE STAFF PURP OSE ONLY. FURTHER, THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE S REGARDING SEMINAR/MEETINGS/VISIT OF STAFF IN DELHI FOR WHICH THE FLAT HAS BEEN PURCHASED. IN THIS CONNECTION IT IS SUBMITTED THAT THERE IS NO DISPUTE THAT THE FLAT AT SAFDARJUNG ENCLAVE IS THE PROPERTY OF THE ASSESSEE SOCIETY. INVESTMENT ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 31 IN IMMOVABLE PROPERTY IS ONE OF THE MODES PRESCRIBE D BY SECTION 11(5)(X). THEREFORE, ONLY ON ASSUMPTIONS AND PRESUM PTIONS, IT CANNOT BE SAID THAT THE FLAT HAS BEEN PURCHASED FOR PERSON AL USE OF THE TRUSTEES WITHOUT BRINGING ANY MATERIAL ON RECORD TH AT THE TRUSTEES RESIDES THERE. HENCE, THE INVESTMENT IN THE FLAT MA DE BY THE TRUSTEE IS AS PER THE MODE SPECIFIED U/S 11(5) AND NOT FOR THE BENEFIT OF THE TRUSTEES. ADVANCE OF RS.35 LAKHS TO SALASAR OVERSEAS PVT. LTD ., JAIPUR- ASSESSEE GAVE ADVANCE OF RS.35 LAKHS TO SALASAR OVERSEAS PV T. LTD. IN THE YEAR 2005 TOWARDS PURCHASE OF 5044 SQ. YD. LAND AT NARAY AN VIHAR, AJMER ROAD, JAIPUR TO SET UP A SCHOOL AT JAIPUR. PROVISIO NAL ALLOTMENT LETTER WAS ISSUED ON 26.03.2011 HAVING PLOT NO. GH-1 & GH -2. THIS ADVANCE IS TRANSFERRED TO THE LAND ACCOUNT IN THE BALANCE S HEET FOR YEAR ENDING 31.03.2014. AT PRESENT THE SCHEME IS UNDER DEVELOPM ENT BY THE DEVELOPER AND AFTER COMPLETION OF THE SAME, THE ASS ESSEE IN PLANNING TO BRING A SCHOOL AT THIS PLACE. THE LD. CIT(E) HAS OBSERVED THAT ASSESSEE HAS NOT F URNISHED THE CONFIRMATION LETTER WHEREIN THE TERMS AND CONDITION S ARE MENTIONED, ASSESSEE HAS NOT FURNISHED CONFIRMATION REGARDING C ONVERSION OF PLOT WITH JDA EVEN AFTER 5 YEARS AND IN THE BOOKS OF ACC OUNTS THE ADVANCE WAS CAPITALISED ONLY ON 31.03.2014 AND THEREFORE , THIS INVESTMENT IS NOT FOR THE OBJECT OF THE TRUST. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 32 IT IS SUBMITTED THAT ALL THE ABOVE OBSERVATIONS MAD E BY LD. CIT(E) IS SUPERFLUOUS. THE OBJECT OF THE ASSESSEE IS TO RUN S CHOOLS. IF FOR FUTURE EXPANSION, LAND IS PURCHASED, ONLY BECAUSE IT TOOK TIME TO CONSTRUCT THE BUILDING ON THE SAID LAND, IT CANNOT BE HELD THAT I T IS NOT FOR THE OBJECT OF THE TRUST PARTICULARLY WHEN INVESTMENT IN IMMOVA BLE PROPERTY IS ONE OF THE MODES OF INVESTMENT U/S 11(5). THE TERMS AND CONDITION OF THE ALLOTMENT IS ALREADY MENTIONED ON THE BACK OF THE P ROVISIONAL ALLOTMENT LETTER. THE SCHEME UNDER WHICH THE PLOT IS PROVISIO NALLY ALLOTTED TO THE ASSESSEE, IS ALREADY APPROVED BY THE JAIPUR DEVELOP MENT AUTHORITIES BUT SINCE THE JDLC (CAMP) FOR ISSUE OF PATTA IS STI LL PENDING, THE CONSTRUCTION ACTIVITIES COULD NOT BE YET STARTED. F URTHER, PASSING THE ACCOUNTING ENTRY BY TRANSFERRING THIS ADVANCE TO LA ND ACCOUNT ON 31.03.2014 DOES NOT MAKE ANY DIFFERENCE SO FAR AS S UCH INVESTMENT IS CONCERNED AND THEREFORE, FOR THIS REASON NO ADVERSE VIEW CAN BE TAKEN SO AS TO PRESUME THAT THE INVESTMENT IS NOT FOR THE OBJECT OF THE TRUST. ADVANCE OF RS. 30 LAKHS WAS GIVEN TO SHALU CONSTRUC TION, NEW DELHI- ADVANCE HAS BEEN GIVEN IN THE YEAR 2009-2010 TOWARD S PURCHASE OF FLAT AT NEW DELHI. HOWEVER BECAUSE OF DELAY, THE BUILDER DID NOT GIVE THE FLAT IN TIME AND THEREFORE, THE SOCIETY PURCHASED T HE FLAT FROM M/S SALUJA CONSTRUCTION PVT. LTD. AS STATED ABOVE. SOCI ETY IS NEGOTIATING WITH THE BUILDER FOR REFUND OF AMOUNT. THE LD. CIT(E) HAS OBSERVED THAT ASSESSEE HAS NOT F URNISHED ANY CORRESPONDENCE THAT IT IS NEGOTIATING WITH THE BUIL DER FOR REFUND OF AMOUNT AND THEREFORE, HE PRESUMED THAT IT IS THE PE RSONAL INVESTMENT ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 33 OF THE TRUSTEE AND IT IS ONLY SIPHONING OF THE FUND S OF THE TRUST FOR THE PERSONAL BENEFIT OF THE TRUSTEES. IT IS SUBMITTED THAT THE ABOVE OBSERVATION OF THE L D. CIT(E) IS SUPERFLUOUS. NO MATERIAL IS BROUGHT ON RECORD THAT ADVANCE IS GIVEN FOR THE PERSONAL BENEFIT OF THE TRUSTEES. THE ADVANCE W AS GIVEN IN THE YEAR 2009-10 AND THEREAFTER THE LD. CIT(E) ISSUED NOTIFI CATION TO THE ASSESSEE U/S 10(23C)(VI) ON 27.12.2010. IT IS NOT T HAT ADVANCE IS GIVEN DURING IN AY 2013-14 FROM WHICH THE NOTIFICATION IS BEING WITHDRAWN. THEREFORE, THIS CANNOT BE A REASON TO PRESUME THAT ANY BENEFIT IS EXTENDED TO THE TRUSTEES. 4. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE ABO VE FACTUAL MATRIX, THE CONTENTIONS RAISED BY BOTH THE PARTIES AND PURSUED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, REGARDING RE NT PAYMENT IN RESPECT OF PROPERTY 219/5, SARDARPURA UDAIPUR, THIS PROPERT Y IS JOINTLY OWNED BY SHRI SANGAM MISHRA AND SMT LILY MISHRA WHO ARE TRUS TEES IN THE ASSESSEE SOCIETY. THE CASE OF THE REVENUE IS THAT SAID PROPERTY HAS BEEN TAKEN ON RENT FROM THESE TWO TRUSTEES WHO ARE COVERED PERSONS U/S 13(3) OF THE ACT AND THE SAME HAS BEEN PROVIDED TO THEM AS RENT FREE ACCOMMODATION BY THE ASSESSEE SOCIETY AND THE TRUSTEES HAVE, ACCORDINGLY, AVAILED UNDUE BENEFIT FROM THE TRUST A ND THE PROPERTY IS NOT BEING USED FOR THE BENEFIT OF THE TRUST AND IT IS AN ARRANGEMENT OF SIPHONING OF THE FUNDS OF THE TRUST. PER CONTRA, T HE CASE OF THE ASSESSEE SOCIETY IS THAT SAID PROPERTY WHICH IS ADJ ACENT TO ITS SCHOOL AT SARDARPURA, UDAIPUR HAS BEEN TAKEN ON RENT FOR THE PURPOSES OF OBJECTS OF THE ASSESSEE SOCIETY FROM THESE TWO TRUSTEES ON AN YEARLY RENT OF ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 34 RS 6,00,000 FROM FINANCIAL YEAR 2008-09, AND DURING THE YEAR, THERE IS AN INCREASE IN ANNUAL RENT FROM RS 6,00,000 TO RS 7 ,08,000 WHICH IS BASED ON REGISTERED VALUER REPORT. IT WAS SUBMITTE D THAT THE SAID PROPERTY IS USED FOR RESIDENCE OF THE SHRI SANGAM M ISHRA (AND HIS FAMILY) WHO IS MANAGING THE ENTIRE AFFAIRS OF THE A SSESSEE SOCIETY, FOR RUNNING COMPUTER LAB AND LIBRARY FOR USE BY THE SCH OOL STUDENTS, AND FOR HOLDING MEETINGS AND PROVIDING STAY FACILITY TO PRI NCIPALS/STAFF MEMBERS OF VARIOUS SCHOOLS RUN BY THE ASSESSEE SOCIETY. IT WAS ACCORDINGLY SUBMITTED THAT THE PROPERTY HAS BEEN TAKEN AND USED FOR THE OBJECTS OF THE ASSESSEE SOCIETY, RENT PAID IS REASONABLE AND N O UNDUE BENEFIT IS PROVIDED TO THE TRUSTEES. 4.1 IN OUR VIEW, IN RESPECT OF THIS PROPERTY AT SAR DARPURA, THERE ARE TWO TRANSACTIONS WHICH ARE UNDER CONSIDERATION BEFO RE US. FIRST IS THE TRANSACTION RELATING TO THE SUBJECT PROPERTY TAKEN ON RENT BY THE ASSESSEE SOCIETY FROM THE TRUSTEES. THE QUESTION I S WHETHER THERE IS ANY BAR IN THE LAW WHICH PROHIBITS SUCH TRANSACTION S AT FIRST PLACE SAYING THAT THERE CANNOT BE ANY TRANSACTIONS BETWEEN THE A SSESSEE SOCIETY AND THE TRUSTEES. IN OUR MIND, THERE IS NO SUCH BAR. A T THE SAME TIME, GIVEN THAT SUCH TRANSACTIONS ARE WITH THE PERSONS WHO ARE THEMSELVES MANAGING THE AFFAIRS OF THE ASSESSEE SOCIETY, THERE SHOULD BE AN ELEMENT OF REASONABLENESS AND FAIRNESS IN SUCH TRAN SACTIONS. SINCE LD CIT(E) HAS INVOKED THE PROVISIONS OF SECTION 13 TO REFER TO THE TRUSTEES AS INTERESTED PERSONS, IT WOULD EQUALLY BE RELEVANT TO REFER TO VARIOUS SITUATIONS AND THE RELATED TRANSACTIONS WHICH HAVE BEEN ENVISAGED IN SECTION 13(2) TO DEFINE THE TRANSACTIONS ENTERED IN TO WITH RELATED PERSONS AND HOW THE SAME WOULD BE CONSTRUED AS PROV IDING BENEFIT TO ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 35 THE INTERESTED PERSONS. CLAUSE (B) OF SECTION 13(2 ) ENVISAGES A SITUATION WHERE ANY LAND, BUILDING OR OTHER PROPERT Y OF THE TRUST OR INSTITUTION IS MADE AVAILABLE FOR THE USE OF THE IN TERESTED PERSON WITHOUT CHARGING ADEQUATE RENT OR OTHER COMPENSATION. THE EMPHASIS IS THEREFORE ON CHARGING OF ADEQUATE RENT OR COMPENSAT ION AND SO LONG AS THE SAME IS ADEQUATE, THE TRANSACTION WOULD BE IN C OMPLIANCE WITH THE SAID PROVISIONS. THE REVERSE OF SUCH A TRANSACTION ARE THE FACTS IN THE INSTANT CASE. THE BUILDING OF THE TRUSTEES ARE PRO VIDED TO THE ASSESSEE TRUST FOR AN ANNUAL RENT OF RS 7,08,000. WHAT THER EFORE HAS TO BE EXAMINED IS WHETHER THE RENT OF RS 7,08,000 PAID BY THE ASSESSEE SOCIETY IS REASONABLE OR NOT. THE TEST OF REASONAB LENESS HAS BEEN TRIED TO BE SATISFIED BY THE ASSESSEE SOCIETY WITH HELP O F REPORT OF A REGISTERED VALUER DETERMINING THE FAIR RENTAL VALUE OF THE PROPERTY. THERE IS NO FINDING GIVEN BY LD CIT(E) REGARDING R ELIABILITY OF SUCH VALUATION REPORT AND WHETHER THE SAME IS ACCEPTABLE OR NOT AND THE BASIS FOR DEVIATION, IF ANY. IN ANY CASE, EVEN WHER E THE REVENUE HAS SOME PRIMA FACIE CONCERN REGARDING THE RELIABILITY OF THE VALUATION REPORT, IT CAN GET THE RENT VALUATION CARRIED OUT T HROUGH ITS VALUATION OFFICERS WHICH HAS NOT HAPPENED IN THE INSTANT CASE . IN THE INTEREST OF JUSTICE AND FAIRNESS, WE THEREFORE DEEM IT FIT TO S ET-ASIDE THE MATTER TO THE FILE OF THE LD CIT(E) TO EXAMINE THE VALUATION REPORT SUBMITTED BY THE ASSESSEE SOCIETY AND TO CARRY OUT INDEPENDENT V ALUATION THROUGH ITS VALUATION OFFICER WITH AN APPROPRIATE OPPORTUNITY T O THE ASSESSEE SOCIETY. 4.2 NOW COMING TO SECOND AND RELATED TRANSACTION. IT RELATES TO PROVISION OF RENT FREE ACCOMMODATION OF THE SAME PR OPERTY BY THE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 36 ASSESSEE SOCIETY TO ITS TRUSTEE SHRI SANGAM MISRA. ALL THE LAW REQUIRES IS THAT THE ACTIVITIES OF THE ASSESSEE SOCIETY AND THE INCOME FROM CARRYING ON SUCH ACTIVITIES SHOULD BE APPLIED WHOLL Y AND EXCLUSIVELY TO THE OBJECTS FOR WHICH IT IS ESTABLISHED AND APPROVE D. SO, AS PART OF CARRYING OUT ITS ACTIVITIES, WHERE THE ASSESSEE SOC IETY DEEM IT FIT TO TAKE CERTAIN PREMISES ON RENT AND PROVIDE IT BY WAY OF R ENT FREE ACCOMMODATION TO ITS TRUSTEE SHRI SANGAM MISHRA WHO IS MANAGING THE WHOLE OF THE AFFAIRS OF THE ASSESSEE SOCIETY RUNNIN G 12 SCHOOLS AT VARIOUS PLACES WITH STUDENT STRENGTH OF OVER 22000, IN OUR VIEW, THE ASSESSEE SOCIETY IS WELL WITHIN ITS RIGHTS TO PROVI DE SUCH AN ACCOMMODATION TO THE SAID TRUSTEE FOR SMOOTH AND EF FICIENT DISCHARGE OF HIS OFFICIAL FUNCTIONS AS WELL AS TO PROVIDE RESIDE NTIAL ACCOMMODATION. IN THIS REGARD, WE AGAIN REFER TO CLAUSE (C) OF SEC TION 13(2) OF THE ACT WHICH PROVIDES THAT IF ANY AMOUNT IS PAID BY WAY OF SALARY, ALLOWANCE OR OTHERWISE DURING THE PREVIOUS YEAR OUT OF THE RESOU RCES OF THE TRUST OR INSTITUTION FOR SERVICES RENDERED BY AN INTERESTED PERSON TO SUCH TRUST OR INSTITUTION AND THE AMOUNT SO PAID IS NOT IN EXCESS OF WHAT MAY BE REASONABLY PAID FOR SUCH SERVICES, THE SAME SHALL B E HELD IN COMPLIANCE WITH THE SAID PROVISIONS. THE EMPHASIS, THEREFORE, IS ON PROVISION OF SERVICES BY THE INTERESTED PERSON TO THE TRUST AND THE SALARY AND ALLOWANCES/PERKS SHOULD BE PAID/PROVIDED WHICH IS C OMMENSURATE TO PROVISIONS OF SUCH SERVICES. IN THE INSTANT CASE, THERE IS NO DISPUTE THAT SHRI SANGAM MISHRA IS MANAGING THE AFFAIRS OF THE A SSESSEE SOCIETY AND WHERE THE ASSESSEE SOCIETY HAS DECIDED TO PROVIDE H IM A RENT FREE ACCOMMODATION IN LIEU OF SUCH SERVICES, NO FAULT CA N BE FOUND IN SUCH A DECISION WHICH IS ANYWAY BEST LEFT TO THE ASSESSEE SOCIETY. ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 37 4.3 NOW, COMING TO A RELATED ISSUE REGARDING EXTENT OF SUCH PROPERTY WHICH HAS BEEN PROVIDED AS RENT FREE ACCOMMODATION TO THE TRUSTEE SHRI SANGAM MISHRA AND TO WHAT EXTENT, IT HAS BEEN UTILISED BY THE SCHOOL FOR ITS ACTIVITIES, THERE ARE CLAIMS AND COU NTER-CLAIMS, WHICH WE HAVE NOTED ABOVE AND ARE NOT REPRODUCED FOR SAKE OF BREVITY, REGARDING THE FLOORS AND OPEN/PARKING AREA WHICH ARE OCCUPIED FOR RESIDENCE PURPOSES AND FOR SCHOOL PURPOSES. THE LD CIT(E) HA S BASED HIS FINDINGS ON REPORT OF AN INSPECTOR OF ACIT(E) WHO HAS CONDUC TED THE SPOT ENQUIRY. DURING THE COURSE OF HEARING, THE BENCH S PECIFICALLY ASKED BOTH THE PARTIES TO PRODUCE SUCH REPORT FOR VERIFIC ATION BUT THE SAME WAS NOT AVAILABLE ON RECORD AND HENCE, COULDNT BE PRODUCED FOR OUR VERIFICATION. IN SUCH CIRCUMSTANCES, WE ARE CONSTR AINED TO REMAND THE MATTER TO THE FILE OF THE LD CIT(E) TO EXAMINE THE MATTER A FRESH AND ALSO TO CONSIDER THE CONTENTIONS OF THE ASSESSEE SO CIETY REGARDING THE ACTUAL USAGE OF THE SAID PROPERTY AND THE ATTACHED OPEN AREA. 4.4 THE NEXT ISSUE IS REGARDING RENT PAYMENT IN RES PECT OF PROPERTY AT 12/493, INDIRA NAGAR, SECTOR 9, LUCKNOW, THE ASSESS EE SOCIETY HAS PAID RENT OF RS. 3,99,600/- TO MS. PRIYAKANKSHA MISHRA, DAUGHTER OF SH. SANGAM MISHRA, WHO IS THE TRUSTEE OF THE ASSESS EE TRUST. THE QUESTION FOR CONSIDERATION IS WHETHER THE PROPERTY HAS BEEN TAKEN ON RENT FOR THE PURPOSES OF THE ASSESSEE TRUST AND SEC ONDLY, WHETHER RENT PAYMENT IS COMMENSURATE WITH THE RENT PREVAILING IN THE MARKET FOR THE SIMILAR PROPERTY. IN THIS REGARD, THE LD AR HAS S UBMITTED THAT THIS PREMISE IS USED FOR PROVIDING RESIDENCE FACILITY TO ONE OFFICE STAFF MR. VINAY PATHAK AND USED FOR STAY OF TRUSTEES/ PRINCIP ALS AND OTHER SENIOR STAFF MEMBERS WHEN THEY VISIT LUCKNOW FOR MONITORIN G THE ACTIVITIES OF ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 38 THE SCHOOL, THUS, SAVING THE COST THAT WOULD HAVE B EEN INCURRED HAD THEY STAYED IN THE HOTEL. PER CONTRA, AS PER LD CIT (E), NO SUPPORTING DOCUMENTARY EVIDENCE HAS BEEN FURNISHED FOR THE USE OF THE SAID PROPERTY FOR THE PURPOSES OF OBJECTS OF THE ASSESSE E SOCIETY. IN RESPECT OF QUANTUM OF RENT PAID, THE LD AR HAS SUBMITTED TH AT A LEASE DEED DATED 19.10.2012 WAS EXECUTED WHEREBY THE FAIR RENT AL VALUE OF THE PREMISES WAS DETERMINED FROM THE REGISTERED VALUER AT RS. 38,500/- PER MONTH AGAINST WHICH ASSESSEE HAS PAID RENT AT THE R ATE OF RS. 33,300/- PER MONTH IN THE FINANCIAL YEAR 2012-13. AS PER LD CIT(E), THE VALUATION REPORT IS NOT RELIABLE AS THE SAME IS UNDATED. IN OUR VIEW, WHERE THE REVENUE HAS SOME PRIMA FACIE CONCERN REGARDING THE RELIABILITY OF THE VALUATION REPORT, IT CAN GET THE RENT VALUATION CAR RIED OUT THROUGH ITS OWN VALUATION OFFICERS WHICH HAS NOT HAPPENED IN TH E INSTANT CASE. IN ABSENCE OF SUFFICIENT MATERIAL ON RECORD, WE DEEM I T FIT TO SET-ASIDE THE MATTER TO THE FILE OF THE LD CIT(E) TO EXAMINE THE SAME A FRESH TAKING INTO CONSIDERATION THE VALUATION REPORT SUBMITTED B Y THE ASSESSEE SOCIETY AND TO CARRY OUT INDEPENDENT VALUATION THRO UGH ITS VALUATION OFFICERS WITH AN APPROPRIATE OPPORTUNITY TO THE ASS ESSEE SOCIETY. THE ASSESSEE SHALL BE AT LIBERTY, TO SUPPORT ITS CONTEN TIONS BY BRINGING APPROPRIATE EVIDENCE ON RECORD, TO THE SATISFACTION OF THE LD CIT(E). 4.5 THE NEXT ISSUE IS REGARDING TRAVEL EXPENSES BOR NE BY THE ASSESSEE SOCIETY OF PRIYAKANSHA MISHRA AND ARYAN MI SHRA AS TO WHETHER THE SAID EXPENSES HAVE BEEN INCURRED FOR THE PURPOS ES OF OBJECT OF THE TRUST OR PERSONAL BENEFIT OF THESE TWO PERSONS WHO ARE RELATED TO THE TRUSTEES OF THE ASSESSEE SOCIETY. IN OUR VIEW, WHA T IS RELEVANT TO NOTE IS THAT MS. PRIYAKANKSHA MISHRA, BESIDES BEING THE DAUGHTER OF ONE OF ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 39 THE TRUSTEES OF THE ASSESSEE SOCIETY, IS A POST GRA DUATE IN MASS COMMUNICATION AND HOLDS A RESPONSIBLE POSITION OF A N ADMINISTRATOR OF THE ASSESSEE SOCIETY WHICH IS RUNNING AROUND 12 SCH OOLS WITH STUDENT CAPACITY OF OVER 22,000 STUDENTS. IF AS PART OF HE R JOB, SHE TRAVELS TO VARIOUS SCHOOLS TO OVERSEE THE SCHOOL ACTIVITIES AN D THE ASSESSEE SOCIETY INCURS THE TRAVEL EXPENDITURE, THE EXPENDITURE IS I NCURRED FOR THE PURPOSES OF THE OBJECTS OF THE ASSESSEE SOCIETY. FU RTHER, THERE ARE VISITS TO OTHER EDUCATIONAL INSTITUTES AND INTERACTION WIT H THEIR FACULTY AND ADMINISTRATORS IN THE EVOLVING FIELD OF EDUCATION, THE EXPENDITURE SO INCURRED IS AGAIN FOR THE PURPOSES OF THE OBJECTS O F THE ASSESSEE SOCIETY. FROM THE DETAILS OF HER TRAVEL AS LISTED DOWN IN TH E LD CIT(E) ORDER, IT IS OBSERVED THAT SHE HAS TRAVELLED TO UDAIPUR, LUCKNOW AND BOMBAY, ALL THESE TRAVEL EXPENDITURE IS THUS FOR THE PURPOSES O F THE OBJECTS OF THE ASSESSEE SOCIETY. NOW COMING TO HER VISIT TO USA TO PURSUE COURSE IN DRAMATIC IN NYFA, THE CASE OF THE REVENUE IS THAT S UCH COURSE IS FOR PERSONAL SKILL DEVELOPMENT OF A PARTICULAR EMPLOYEE AND ANY EXPENDITURE INCURRED BY THE ASSESSEE SOCIETY CANNOT BE TREATED AS EXPENDITURE FOR EDUCATIONAL PURPOSES. PER CONTRA, T HE CASE OF THE ASSESSEE SOCIETY IS THAT THE SOCIETY HAS SENT HER T O USA TO UNDERGO A COURSE IN DRAMATIC IN NYFA SO THAT THE SKILLS DEVEL OPED BY HER CAN BE USED FOR ORGANIZING VARIOUS SOCIAL & CULTURAL PROGR AMMES IN THE SCHOOL RUN BY THE SOCIETY. IN OUR VIEW, ANY COURSE WHICH I S PURSUED BY AN INDIVIDUAL DO DOUBT LEADS TO ENHANCEMENT IN THE PER SONAL SKILLS OF THAT INDIVIDUAL AND WHERE SUCH SKILL SO ACQUIRED IS USED IN DISCHARGING THE ROLE AND RESPONSIBILITY WHICH SUCH INDIVIDUAL HOLDS IN AN ORGANISATION, IT AID AND SUPPORT THE ACTIVITIES AND ULTIMATE OBJECTI VES OF SUCH AN ORGANISATION AS WELL. THERE IS THUS ALWAYS A BENEF IT WHICH IS DERIVED BY ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 40 AN INDIVIDUAL PURSUING SUCH A COURSE AS WELL AS BY THE ORGANISATION. HOWEVER, MERELY BECAUSE AN INDIVIDUAL DERIVES A BEN EFIT BY WAY OF SKILL ENHANCEMENT, IT CANNOT BE HELD THAT EXPENDITURE INC URRED FOR PURSUING SUCH COURSE IS NOT TOWARDS THE OBJECTIVES OF THE OR GANISATION. CONDUCTING REGULAR TRAINING AND PURSUING PROFESSION AL COURSES ARE PART OF EVERY ORGANISATIONS HUMAN RESOURCE DEVELOPMENT POLICIES THESE DAYS AND ESPECIALLY, IN THE FIELD OF EDUCATION, ONE CANN OT DENY THE REQUIREMENT FOR SUCH REGULAR TRAINING AND COURSES. FURTHER, WHETHER A PARTICULAR SKILL IS BENEFICIAL TO AN ORGANISATION I S A QUESTION WHICH TO BE DECIDED BY THAT ORGANISATION ITSELF AS IT IS BEST S UITED TO DETERMINE THE SAME. IN THIS BACKGROUND, IN THE PRESENT CASE, WHA T IS TO BE SEEN IS THAT WHETHER A COURSE IN DRAMATICS WILL AID AND SUP PORT THE SUCCESSFUL DISCHARGE OF THE FUNCTIONS AND ROLE AND RESPONSIBIL ITIES ENTRUSTED TO PRIYAKANKSHA MISHRA AND IN THE OVERALL ACTIVITIES O F THE ASSESSEE SOCIETY. BESIDES ACADEMICS, THERE IS GREATER EMPHASIS THESE DAYS ON EXTRA- CURRICULAR ACTIVITIES IN THE SCHOOL FOR OVERALL DEV ELOPMENT OF A STUDENT AND AS PART OF THAT, THE STUDENTS ATTEND TO REGULAR CLASSES IN THE FIELD OF DANCE, MUSIC, DRAMATICS, AND PARTICIPATE IN VARIOUS PROGRAMMES THROUGHOUT THEIR ACADEMIC YEAR. THESE ACTIVITIES H ELP IN OVERALL DEVELOPMENT OF STUDENTS. THEREFORE, BEING AN ADMIN ISTRATOR OF THE ASSESSEE SOCIETY AND HAVING AN ADDITIONAL SKILL IN DRAMATICS WILL SURELY HELP HER IN OVERSEEING AND SUPERVISING SUCH ACTIVIT IES MORE EFFECTIVELY BEING UNDERTAKEN BY TEACHERS ACROSS VARIOUS SCHOOLS BEING RUN BY THE ASSESSEE SOCIETY. IN ANY CASE, THE COURSE FEE HAS N OT BEEN BORNE BY THE ASSESSEE SOCIETY AND IT IS ONLY THE TRAVEL EXPENDIT URE WHICH HAS BEEN BORNE BY THE ASSESSEE SOCIETY. SO, EVEN IF THE ARG UMENTS OF THE REVENUE ARE ACCEPTED, EVEN ON PRINCIPLE OF PARITY, SHE HAS PICKED UP A ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 41 REASONABLE AMOUNT OF EXPENDITURE AND ONLY A PART OF THE EXPENDITURE HAS BEEN BORNE BY THE ASSESSEE SOCIETY AND GIVEN TH AT THE ASSESSEE SOCIETY WILL BE BENEFITED BY SUCH COURSE, THE TRAVE L EXPENDITURE CANNOT BE HELD TO HAVE BEEN INCURRED FOR PERSONAL PURPOSES . IN LIGHT OF ABOVE, WE DONOT SEE THERE IS ANY JUSTIFICATION IN HOLDING THAT WHERE ONLY TRAVEL EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE SOCIE TY TOWARDS TRAVEL OF PRIYAKANSHA MISHRA TO PURSUE SUCH COURSE IN DRAMATI CS, IT IS FOR HER PERSONAL BENEFIT AND NOT FOR THE OBJECTS OF THE ASS ESSEE SOCIETY. 4.6 REGARDING TRAVEL EXPENDITURE OF AARYAN MISHRA, THE ASSESSEE SOCIETY HAS CONTENDED THAT HE IS GRANDSON OF THE UN CLE OF DR. SANGAM MISHRA AND HE DOES NOT FALL IN THE DEFINITION OF RE LATIVE U/S 2(41) & 13(3) OF THE ACT. IT WAS FURTHER CONTENDED THAT HE WAS SENT TO LUCKNOW FOR PARTICIPATION IN CULTURAL PROGRAMME OF THE INDI RA NAGAR SCHOOL, LUCKNOW. PER CONTRA, THE LD CIT(E) HAS OBSERVED THA T HE IS SON OF SHRI SANGAM MISHRA AND THE ASSESSEE SOCIETY HAS NOT FURN ISHED ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE ITS CLAIM AND DETAILED REASONS OF JOURNEY, SUPPORTING DOCUMENTS OF JOURNEY ETC. IN VI EW OF SUCH COUNTER- CLAIMS AND IN ABSENCE OF SUFFICIENT MATERIAL ON REC ORD, THE MATTER IS SET- ASIDE TO THE FILE TO LD CIT(E) TO EXAMINE THE SAME A FRESH AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. 4.7 REGARDING ADVANCE OF RS 3,54,80,000 MADE TO SAL UJA CONSTRUCTION PVT LTD, IT IS NOT DISPUTED THAT THE S AID ADVANCE WAS TOWARDS PURCHASE OF A FLAT AT SAFDARJUNG ENCLAVE, N EW DELHI AND A SALE DEED HAS SINCE BEEN EXECUTED IN THE NAME OF THE ASS ESSEE TRUST ON 20.11.2013. THE INVESTMENT OF RS 3,54,80,000 IS THU S MADE IN THE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 42 PURCHASE OF SAID FLAT DURING THE YEAR UNDER CONSIDE RATION. THE LD AR SUBMITTED THAT INVESTMENT IN AN IMMOVABLE PROPERTY IS ONE OF THE PRESCRIBED MODES OF INVESTMENT OF FUNDS IN COMPLIAN CE WITH THE 3 RD PROVISO OF SECTION 10(23C)(VI) READ WITH SECTION 11 (5)(X) OF THE ACT AND THE SUBJECT INVESTMENT IN PURCHASE OF A FLAT AT SAF DARJUNG ENCLAVE, NEW DELHI IS THUS IN COMPLIANCE WITH THE SAID PROVISION S. WE HAVE NO HESITATION IN AGREEING TO THE SAID CONTENTION OF TH E LD AR. HOWEVER, THE QUESTION THAT REMAINS IS WHETHER THE SAID INVESTMEN T IN PURCHASE OF A FLAT AT SAFDARJUNG ENCLAVE, NEW DELHI WAS FOR THE P URPOSES OF OBJECTS OF THE TRUST FOR IMPARTING EDUCATION OR FOR THE PERSON AL USE/BENEFIT OF THE TRUSTEES. THERE SHOULD BE A REASONABLE NEXUS BETWE EN THE OBJECTS OF THE IMPARTING EDUCATION AND THE SAID INVESTMENT AS WELL AS ITS ULTIMATE UTILISATION. WHERE THE INVESTMENT IN IMMOVABLE PROP ERTY IS ENVISAGED INITIALLY FOR THE PURPOSES OF THE ASSESSEE TRUST AN D LATER ON, IT IS FOUND THAT THE IMMOVABLE PROPERTY IS MADE AVAILABLE AND U TILISED FOR PERSONAL USE/BENEFIT OF THE TRUSTEES WITHOUT CHARGING ADEQUA TE RENT AND OTHER RELATED COMPENSATION, IT WOULD STILL BE A CASE WHER E THE PROPERTY OF THE ASSESSEE TRUST IS USED AND APPLIED FOR BENEFIT OF T HE TRUSTEES. AS PER THE LD CIT(E), GOING BY THE SPECIFICATIONS OF THE FLAT, IT INDICATES THAT THE FLAT HAS BEEN PURCHASED FOR PERSONAL USE OF TRU STEES AND NOT FOR THE USE OF STAFF AS NO TRUST WILL INVEST SUCH A HIGH AM OUNT OF RS. 3,80,00,000/- FOR A FLAT WITH SUCH LUXURY FACILITIE S FOR THE STAFF PURPOSE ONLY. PER CONTRA, THE LD AR CONTENDED THAT THIS FLA T IS USED AS GUEST HOUSE OF THE SOCIETY AND VARIOUS STAFF MEMBERS & TR USTEE WHENEVER VISIT DELHI FOR CBSE WORK, TRAINING PROGRAMME, CONF ERENCES & OTHER ALLIED WORK STAY IN THE FLAT. BESIDES THIS, TWO STA FF MEMBERS FOR CERTAIN REGULATORY WORK ARE SITTING AT THIS OFFICE. DURING THE COURSE OF HEARING, ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 43 THE LD CIT(DR) DRAWN OUR REFERENCE TO THE BALANCE S HEET OF THE ASSESSEE TRUST AS ON 31.3.2014 AVAILABLE AS APB 108 AND SUBMITTED THAT THE ASSESSEE TRUST ALREADY HAS AN EXISTING FLAT (NO . 4/149) AT THE SAME LOCATION IE, AT SAFDARJUNG ENCLAVE AND ASSESSEE TRU ST HAS NOT DEMONSTRATED THE NECESSITY OF BUYING ANOTHER FLAT ( NO. 4/150) ADJACENT TO THE SAID FLAT. IT IS THUS A FACT THAT THERE ARE TWO ADJACENT FLATS IN THE NAME OF THE ASSESSEE TRUST IN THE SAME LOCALITY IN NEW DELHI. THERE ARE CLAIMS AND COUNTER-CLAIMS REGARDING THE PURPOSE AND UTILISATION OF THE SAID FLATS. HOWEVER, WHAT WE FIND THAT THESE ARE M ERE CONTENTIONS WITHOUT ANY DEMONSTRABLE EVIDENCE ON RECORD TO SUPP ORT THE CASE OF EITHER OF THE PARTIES. IN ABSENCE OF SUFFICIENT MA TERIAL, WE DEEM IT FIT TO REMAND THIS MATTER TO THE FILE OF THE LD CIT(E) TO EXAMINE THE SAME A FRESH IN LIGHT OF ABOVE DISCUSSIONS AND BY BRINGING ON RECORD APPROPRIATE EVIDENCE. THE ASSESSEE SHALL BE AT LI BERTY, TO SUPPORT ITS CONTENTIONS BY BRINGING APPROPRIATE EVIDENCE ON REC ORD, TO THE SATISFACTION OF THE LD CIT(E). 4.8 REGARDING ADVANCE OF RS 35,00,000 GIVEN TO SALA SAR OVERSEAS PVT LTD, THE ASSESSEE TRUST HAS SUBMITTED THAT THE SAID ADVANCE WAS GIVEN IN THE YEAR 2005 TOWARDS PURCHASE OF 5044 SQ. YD. L AND AT NARAYAN VIHAR, AJMER ROAD, JAIPUR TO SET UP A SCHOOL AT JAI PUR. PROVISIONAL ALLOTMENT LETTER WAS ISSUED ON 26.03.2011 HAVING P LOT NO. GH-1 & GH- 2 IN THE NAME OF ASSESSEE TRUST. THIS ADVANCE IS TR ANSFERRED TO THE LAND ACCOUNT IN THE BALANCE SHEET FOR YEAR ENDING 31.03. 2014. AT PRESENT THE SCHEME IS UNDER DEVELOPMENT BY THE DEVELOPER AN D AFTER COMPLETION OF THE SAME, THE ASSESSEE IN PLANNING TO BRING A SCHOOL AT THIS PLACE. PER CONTRA, THE LD. CIT(E) HAS OBSERVED THAT FROM THE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 44 PROVISIONAL ALLOTMENT LETTER DATED 26.03.2011, IT I S NOT VERIFIABLE THAT THE SAID INVESTMENT WAS MADE FOR THE OBJECTS OF THE TRU ST. FURTHER, THE LD CIT(E) OBSERVED THAT THE SCHEME UNDER WHICH SUBJECT LAND FALLS WAS ORIGINALLY NIJI KHATEDARI SCHEME OF AGRICULTURAL LA ND AND WITHOUT CONVERTING THE STATUS OF PLOT SO PURCHASED FROM AGR ICULTURAL TO INSTITUTIONAL, THE PROPERTY CANNOT BE USED FOR THE OBJECTS OF THE TRUST. IN OUR VIEW, THESE ARE VALID OBSERVATIONS WHICH HAV E BEEN RAISED BY THE LD CIT(E) AND THE SAME SHOULD BE LOOKED INTO. FROM PERUSAL OF THE PROVISIONAL ALLOTMENT LETTERS DATED 26.03.2011 IN R ESPECT OF PLOT NO. GH- 1 & GH-2 AND THE PROVISIONAL SITE PLAN AVAILABLE AT APB 75-91, IT IS NOT CLEAR THAT THE SAID PLOTS ARE FOR THE PURPOSE OF SE TTING UP ANY EDUCATION SCHOOL/INSTITUTION AND EARMARKED FOR SUCH PURPOSES. THE LD AR HAS SUBMITTED THAT SCHEME UNDER WHICH THE SUBJECT PLOTS HAVE BEEN PROVISIONALLY ALLOTTED TO THE ASSESSEE TRUST IS ALR EADY APPROVED BY JDA. THE SAID APPROVAL GRANTED BY THE JDA WILL ACTUALLY HELP DETERMINE WHETHER SUCH PLOTS ARE EARMARKED FOR EDUCATION PURP OSES BUT THE SAID APPROVAL IS NOT ON RECORD. THE MATTER THEREFORE NE ED FURTHER EXAMINATION AND THE SAME IS ALSO SET-ASIDE TO THE F ILE OF THE LD CIT(E) TO EXAMINE THE SAME A FRESH IN LIGHT OF ABOVE DISCUSSI ONS AND BY BRINGING ON RECORD APPROPRIATE EVIDENCE. THE ASSESSEE SHALL BE AT LIBERTY, TO SUPPORT ITS CONTENTIONS BY BRINGING THE APPROVAL GR ANTED BY THE JDA TO THE SCHEME UNDER WHICH THE PLOTS HAVE BEEN PROVISIO NALLY ALLOTTED AND OTHER APPROPRIATE EVIDENCE ON RECORD, TO THE SATISF ACTION OF THE LD CIT(E). 4.9 NOW COMING TO MATTER RELATING TO ADVANCE OF RS 30 LACS GIVEN TO SHALU CONSTRUCTIONS IN THE YEAR 2009-2010 TOWARDS P URCHASE OF FLAT AT NEW DELHI. IT WAS SUBMITTED BY LD AR THAT BECAUSE O F DELAY, THE ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 45 BUILDER DID NOT GIVE THE FLAT IN TIME AND THEREFORE , THE SOCIETY PURCHASED THE FLAT FROM ANOTHER FIRM M/S SALUJA CON STRUCTION PVT. LTD AND THE SOCIETY IS NEGOTIATING WITH THE BUILDER FOR REFUND OF AMOUNT. THE LD CIT(E) HAS OBSERVED THAT THE ASSESSEE HAS NO T FURNISHED ANY EVIDENCE REGARDING ORIGINAL AGREEMENT WITH THE SAID FIRM FOR PURCHASE OF THE FLAT OR WITH REGARD TO THE CANCELLATION OF T HE SAID AGREEMENT AND RECOVERY OF THE SAID ADVANCE. IN OUR VIEW, THESE A RE RELEVANT OBSERVATIONS OF THE LD CIT(E) TO DETERMINE THE PURP OSE FOR WHICH THE ADVANCE WAS ORIGINALLY GIVEN. SINCE WE HAVE SET-AS IDE THE OTHER MATTERS AS DISCUSSED ABOVE, THE ASSESSEE IS GRANTED ONE MORE OPPORTUNITY TO BRING ON RECORD RELEVANT EVIDENCE IN SUPPORT OF ITS CONTENTIONS. THE MATTER IS ACCORDINGLY SET-ASIDE T O THE FILE OF THE LD CIT(E) TO EXAMINE THE SAME A FRESH IN LIGHT OF ABOV E DISCUSSIONS. 4.10. IN LIGHT OF ABOVE DISCUSSIONS, WE FIND THAT T HERE IS NOT SUFFICIENT MATERIAL THAT IS BROUGHT ON RECORD TO TAKE A DEFINI TIVE VIEW IN THE MATTER ON WITHDRAWAL OF APPROVAL GRANTED TO THE ASSESSEE U /S 10(23C)(VI) OF THE ACT. THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE LD. CIT(E) TO EXAMINE THE SAME A FRESH IN LIGHT OF ABOVE DISCU SSIONS AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE SO CIETY. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/05/2017 ITA NO. 152/JP/2017 SCHOLARS EDUCATION TRUST OF INDIA VS. CIT (E),JAIPU R 46 SD/- SD/- FNOK FLAG FOE FLAG ;KNO (DIVA SINGH) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- /05/2017. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S SCHOLARS EDUCATION TRUST OF INDI A, BANI PARK, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE COMMISSIONER OF INCOME-TAX (EXEMPTION), 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. 152/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR