Income Tax Officer, Ward -1(2), Panaji V. M/s Shree Shivakrupanand Swami Vihar Co-operative Housing Society Ltd., Shiroda, Ponda

ITA 186/PAN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5452 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 15-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: CHANDRANATH RAMANI
• Keywords: Search and seizure; Charitable institution; Opportunity of being heard; Additional evidence; Documents seized
• Section: 132; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' PANAJI ' BENCH, PANAJI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO. 186 / PAN / 201 7 (ASSESSMENT YEAR: 2012 - 13 ) INCOME TAX OFFICER 1(2) AAYAKAR BHAVAN, EDC COMPLEX, PATTO PLAZA PANAJI, GOA 403001 VS. M/S. SHEE SHIVKRUPANAND SWAMI VIHAR COOPERATIVE HOUSING SOCIETY LTD. SHIRODA, PONDA , GOA PAN AABCS8862N APPELLANT RESPONDENT APPELLANT BY: SHRI Y.V. RAVIRAJ RESPONDENT BY: SHRI CHANDRANATH RAMANI DATE OF HEARING: 15 .11.2019 DATE OF PRONOUNCEMENT: 04.02 .2019 O R D E R PER SHAMIM YAHYA, AM THIS APPEAL FILED BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 2 , PANAJI DATED 31 . 03 .201 7 AND IT RELATES TO A.Y. 2012 - 1 3 . 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS. 2,95,35,000/ - MADE ON ACCOUNT OF AMOUNT RECEIVED IN THE NAME OF THE TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST. 2. WHETHER THE CIT(A) WAS RIGHT TO STATED THAT TRUST DID NOT HAVE ANY ROLE IN FORMATION OF THE APPELLANT SOCIETY. 3. WHETHER THE CIT(A) WAS RIGHT TO GIVE ACCENT TO THE REPLY OF THE ASSESSEE THAT OBJECTIVE OF THE TRUST AND THE MEMBERS OF THE SOCIETY ARE SAME WHICH IS IRRELEVANT TO THE SUBJECT MATTER O F ADDITION MADE. 4. WHETHER THE CIT(A) WAS RIGHT TO STATED THAT THE TRUST DOES NOT RENDER ANY SPECIAL OR SPECIFIC SERVICES TO THE MEMBERS OF THE APPELLANT SOCIETY AND IT TREAT ALL THE MEMBER OF THE PUBLIC WITHOUT ANY DISCRIMINATION. THE CIT(A) FAILED TO N OTICE THAT NO PERSON WAS ALLOWED TO THE PURCHASE THE PROPERTY WITHOUT BECOMING MEMBER OF THE SOCIETY. ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 2 5. WHETHER THE CIT(A) WAS RIGHT TO GIVE NO IMPORTANCE TO DATE OF INCORPORATION OF THE SOCIETY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO - OPERATIVE HOUSING SOCIETY SITUATED AT SHIRODA, PONDA, GOA. THE FACTS OF THE CASE ARE THAT DURING THE GENERAL ELECTIONS TO GOA STATE ASSEMBLY, SHRI. DHARMARAJ J. BHOSLE, THE CHIEF PROMOTER AND THEN CHAIRMAN OF THE APPELLANT WAS FOUND CARRYING CASH O F AROUND ` 4,33,500/ - BY THE ELECTION OBSERVER TEAM. THE INFORMATION OF POSSESSION OF CASH WAS PASSED ON TO INCOME TAX DEPARTMENT. ACCORDINGLY, A SEARCH AND SEIZURE OPERATION WAS CARRIED ON IN THE OFFICE PREMISES OF MR. DHARMARAJ J. BHOSLE AND CERTAIN DOCUM ENTS MARKED AS A/SVCHSL/1 DATED 14.02.2012 WERE FOUND AND SEIZED. AN AMOUNT OF ` 13,14,300 / - INCLUDING THE AMOUNT FOUND BY THE ELECTION OBSERVER TEAM WAS SEIZED FROM MR. BHOSLE. DURING INTERROGATION, MR. BHOSLE SUBMITTED THAT THE AMOUNT SEIZED FROM HIM BELO NGED TO THE ASSESSEE WHICH HAD COME INTO EXISTENCE ON 18.11.2011. PAGE NUMBERS 33 TO 53 OF THIS SEIZED MATERIAL CONTAINED AN AGREEMENT TO SELL EXECUTED ON 20.10.2011 BETWEEN THE ASSESSEE REPRESENTED BY THE CHIEF PROMOTER MR. BHOSLE WITH THE LAND OWNERS SHR I. DAVENDAR SINGH & OTHERS FOR PURCHASE OF 1,89,300 SQ. MTS OF LAND AT VILLAGE SHIRODA, PONDA TALUKA FOR A CONSIDERATION OF ` 7,63,01,150/ - . AS PER THE AGREEMENT, ONLY ` 10,000/ - WAS PAID TO THE LAND OWNERS AND BALANCE AMOUNT WAS PAYABLE IN FOUR EQUAL INSTALL MENTS . IN THE ASSESSMENT ORDER, AO HAS ANALYZED THE REASON AS TO WHY THIS LAND WAS PURCHASED BY THE ASSESSEE AND HOW THE PAYMENT WAS MADE ON THE BASIS OF DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. IN PARA 6 OF THE ASSESSMENT ORD ER, THE AO HAS ALSO GIVEN A CHART GIVING DETAILS OF RECEIPTS AND PAYMENTS OF ASSESSEE AND HAS COMPARED THE SAME WITH THE PAYMENTS DEBITED IN THE BANK ACCOUNT OF THE ASSESSEE . THE A.O. FOUND THAT IT WAS THE APPLICATION OF INCOME OF THE ASSESSEE WHICH IS PAID AS DONATION BY THE ASSE SSEES MEMBERS TO YOG PRABHA BHARTI SEVA SAUNSTHA TRUST, WHEREIN THE CHIEF PROMOTER OF THE ASSESSEE MR. DHARMARAJ BHOSLE IS A SADHAK (MEDITATOR). THE CONTENTION OF THE AO WAS THAT THE ASSESSEE HAD APPLIED THE INCOME RECEIVED FROM IT MEMBERS FOR MAKING PAYM ENTS TO THE ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 3 TRUST. ACCORDINGLY, AO BROUGHT TO TAX AN AMOUNT OF ` 2,95,35,000/ - BEING DONATIONS MADE BY THE MEMBERS OF THE ASSESSEE TO YPBSST (I.E. ` 1,65,000 X 179 MEMBERS). 4. THE A.OS ORDER MAY BE GAINFULLY REFERRED AS UNDER: 14. THE REPLY OF THE ASSESEE HAS BEEN CONSIDERED BUT THE SAME CANNOT BE ACCEPTED. WHEN THE MODALITIES OF PAYMENTS TO BE MADE TOWARDS THE PROPOSED PLOTS BY THE SOCIETY MEMBERS ARE ANALYSED, IT CAN BE SEEN THAT ANY MEMBER WHO IS BUYING THE PROPOSED PLOT OR WANTS TO BUY THE PROPOSED PLOT HAS TO PAY AN A MOUNT TOTALLING TO RS.5,85,000/ - FOR EACH PLOT. THIS AMOUNT OF RS.5,85,000/ - INCLUDES AN AMOUNT OF RS.1,65,000/ - TO BE PAID TO THE TRUST YOG'PRABHA BHARATI SEVA SANSTHA TRUST IN WHICH SHRI DHARRNARAJ J.BHONSLE IS A SADHAK JDIRECTLY. THIS SHOWS THAI ONE CAN BUY THE PROPOSED PLOT ONLY IF THE SAID AMOUNT OF RS.1,65,000/ - IS PAID TO THE TRUST ALONG WITH THE REMAINING AMOUNTS PAID TO THE SOCIETY. IN OTHER WORDS ONE WILL NOT GET THE PLOT OF THE SOCIETY IF ONE DENIES TO MAK E THE PAYMENT OF RS. 1,65,000/ - TO THE TRUST YOG PRABHA BHARATI SCVA SANSTHA TRUST ( IN WHICH SHRI DHARMARAJ J.BHONSLE IS A SADHAK ). THUS THE PLOT BUYER HAS TO COMPULSORILY MAKE PAYMENT TO THE TRUST IN ORDER TO BUY PLOT WHICH IS FORCEFULL AND NOT VOLUNTAR Y IN NATURE. IT IS ALSO OBSERVED THAT THERE ARE NO BYE LAWS OF THE SOCIETY WITH'REGARD TO THE MODALITIES OF PAYMENTS STATED ABOVE. 15. IT IS FURTHER NOTICED THAT THE AMOUNT TO BE PAID TO THE TRUST BY ALL THE MEMBERS ARE THE SAME I.E F RS.1,65,000/ - WHICH M AKE IT HARD TO BELIEVE THAT EACH MEMBER WILL DONATE THE SAME AMOUNT , AS HAS BEEN CLAIMED. HENCE THE PAYMENTS MADE BY THE SOCIETY MEMBERS TO THE TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST ( IN WHICH SHRI DHARMARAJ J.BHONSLE IS A SADHAK ) AS A PART OF THE COST OF THE PLOT ARC COMPULSORY IN NATURE AND NOT AT ALL VOLUNTARY IN NATURE AND HENCE DO NOT ASSUME THE NATURE OF DONATION AS LIAS BEEN CLAIMED BY THE SOCIETY. 16. IT IS THUS CLEAR THAT THE TRUST M/S SHIVKRUPANANAD SWAMI VIHAR CO - OPERATIVE HOUSING SOCIET Y LTD HAS MERELY APPLIED THE AMOUNT RECEIVED FROM THE BUYERS THROUGH THEIR HANDS TO BE RECEIVED BY THE TRUST YOG PRABHA BHARATI SCVA SANSTHA TRUST ( IN WHICH SHRI DHARMARAJ J.BHONSLE IS A SADHAK ). HENCE IT WOULD CERTAINLY BE THE INCOME OF THE TRUST YOG PR ABHA BHARATI SEVA SANSTHA TRUST ( IN WHICH SHRI DHARMARAJ J.BHONSLE IS A SADHAK ) AS IT HAS MERELY APPLIED THE INCOME RECEIVED BY IT. THIS INCOME HAS ONLY BEEN APPLIED AS IT WAS COMPULSORY ON THE BUYERS TO PAY AN AMOUNT OF RS.1,65,000/ - TO YOG PRABHA BHARA TI SEVA SANSTHA TRUST ( IN WHICH SHRI DHANNQRAJ J.BHONSLE IS A SADHAK ). THIS CONDITION OF PAYMENT OF AN AMOUNT OF RS.1,65,000/ - TO THE TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST ( IN ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 4 WHICH SHRI DHARMARAJ J.BHONSLE IS A SADHAK ) WAS CREATED BY THE TRUST M /S SHIVKRUPANANAD SWAMI VIHAR CO - OPERATIVE HOUSING SOCIETY LTD ITSELF. THE BUYER OFF THE PLOT WOULD BE ELIGIBLE FOR A PLOT ONLY WHEN THE AMOUNT OF RS.1,65,000/ - WAS PAID TO THE OTHER TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST ( IN WHICH SHRI DHARMARAJ J.B HONSLE IS A SADHAK ). HENCE IN THIS CASE THIS WOULD MERELY AMOUNT TO APPORTIONMENT OF INCOME OF THE ASSCSSEE. IN THIS CASE THERE WAS AN OBLIGATION BY THE SOCIETY TRUST M/S SHIVKRUPANANAD SWAMI VIHAR CO - OPERATIVE HOUSING SOCIETY LTD TO HAVE MONEY RECEIVED B Y IT TO BE INVESTED B THE MEMBER IN THE YOG PRABHA BHARATI SEVA SANSTHA TRUST (IN WHICH SHRI DHARMARAJ J.BHONSLE IS A SADHAK ) AS THE MONEY WAS TO BE USED JOINTLY TO PURCHASE A LANE PROPERTY ADJACENT TO THE PROPERTY OF THE ASSESSEE TRUST. SUBSEQUENTLY A CO MMON MEDITATION FACILITY FOR THE BENEFIT OF OTHERS INCLUDING THE SOCIETY MEMBERS WAS THE AIM OF THE ASSESSEE TRUST. IT IS ALSO CLEAR THAT THE SO CALLED DONATIONS ARE NOI VOLUNTARY IN NATURE. SO ALSO THE CONTENTION OF THE ASSESSEE THAT THE MEMBERS IN THEIR INDIVIDUAL CAPACITY DECIDED TO MAKE UNIFORM DONATION SO AS TO AVOID ANY ARGUMENTS, BIAS AND MISUNDERSTANDING AMONGST THE MEMBERS IN ALSO NOT CORRECT AS IS EVIDENT FROM THE STATEMENT OF SHRI DHARMARAJ J. BHONSLE THE CHIEF PROMOTER AND CHAIRMAN OF THE SOCIET Y RECORDED ON 13:02.2012 WHICH IS REPRODUCED AS UNDER: Q. 13 PLEASE GIVE THE DETAILS OF PAYMENT MADE OR TO BE MADE TO THE CO - OPERATIVE SOCIETY SVCHSL BY THE WILLING BUYERS AND HOW IS THE SAME ACCOUNTED. ANS: MODALITIES OF PAYMENT MADE OR TO BE MADE TO THE CO - OPERATIVE SOCIETY SVCHSL BY THE WILLING BUYERS ARE AS BELOW: INSTALMENT LAST DATE OF PAYMENT TOTAL TRUST SOCIETY DEVELOPMENT 1 ST 23.10.2011 1,45,000 94,000 94,000 10,000 2ND 15.11.2011 1,10,000 31,000 72,000 7,000 3 RD 15.12.2011 1,10,000 31,000 72,000 7,000 4TH 15.01.2012 1,10,000 31,000 72,000 7,000 5 TH 15.02,2012 1,10.000 31,000 72,000 7,000 TOTAL 5,85,000 1,65,000 3,82,000 38,000 PAYMENT OF TRUST SHOULD BE MADE IN THE NAME OF 'YOG PRABHA BHARTI SEVA SANSTHA TRUST' AND PAYMENT OF THE SOCIETY SHOULD BE MADE IN THE NAME OF 'SHREE SHIVKRUPANAND SWAMI VIHAR CO - OPERATIVE HOUSING SOCIETY LTD.' 17. IT IS THUS CLEAR FROM THE STATEMENT OF THE CHAIRMAN THAT THERE CERTAINLY EXISTS A NEXUS BETWEEN THE SO CALLED DONATION RECEIVED ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 5 DIRECTLY IN THE NAME OF THE ASSESSEE TRUST AND AMOUNTS APPLIED BY THE ASSESSEE IN THE TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST ( IN WHICH SHRI DHARMARAJ J.BHONSLE I S A SADHAK ). 18. A TOTAL OF 179 MEMBERS HAD PAID THE AMOUNT OF RS.1,65,000/ - EACH. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE AMOUNTS OF RS.2,95,35,000/ - (L,65,000 X 179) RECEIVED IN THE NAME OF THE TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST ( IN WHICH SHRI DHARMARAJ J. BH ONSLE IS A SADHAK ) IS NOTHING BUT APPLICATION OF INCOME OF THE ASSESSEE TRUST AND HENCE NEEDS TO BE TAXED AS INCOME OF THE ASSESSEE FOR THE A. Y.2012 - 13 . 5. BEFORE THE LEARNED CIT(A) THE ASSESSEE MADE VARIOUS SUBMISSIONS INCLUDING ADDITIONAL EVIDENCES. THE LEARNED CIT(A) OBTAINED REMAND REPORT FROM THE AO. THE LEARNED CIT(A) DID NOT BOTHER TO BRING ON RECORD THE MATERIALS GIVEN BY THE AO IN THE REMAND REPORT. HOWEVER, HE DID PRODUCE THE REJOINDER FROM THE ASSESSEE. THEREAFTER PLACING RELIANCE UPON THE ASSESSEES SUBMISSION HE DELETED THE ADDITION BY OBSERVING AS UNDER: 4.9. I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE REMAND REPORT OF THE AO, THE SUBMISSIO NS OF THE APPELLANT, REJOINDER OF THE APPELLANT TO THE REMAND REPORT AND THE INFORMATION RECEIVED THROUGH INDEPENDENT ENQUIRIES. FROM THE INFORMATION RECEIVED, IT IS FOUND THAT, YPBSST DID NOT HAVE ANY ROLE IN FORMATION OF THE APPELLANT SOCIETY. ONLY THE O BJECTIVE OF YPBSST AND THE MEMBERS OF THE APPELLANT ARE SAME I.E. PRACTICING MEDITATION AND RELATED ACTIVITIES. YPBSST IS A CHARITABLE INSTITUTION WHOSE INCOME IS EXEMPT U/S. 11 OF THE I.T. ACT. IT IS A FACT THAT THE MEMBERS OF THE APPELLANT SOCIETY ARE SADHAKS, WHO ARE PARTICIPATING IN THE MEDITATIONAL ACTIVITIES OF THE TRUST (YPBSST). THE APPELLANT HAS NOT COLLECTED ANY DONATIONS FOR YPBSST FROM ITS MEMBERS. IT IS THE MEMBERS THEMSELVES HAD DECIDED IN THEIR INDIVIDUAL CAPACITY TO DONATE CERTAIN AMOUNTS TO YPBSST TO PROMOTE THEIR OWN INTEREST IN MEDITATION. THE LIST AND AMOUNT OF DONATIONS MADE BY THE MEMBERS OF THE APPELLANT SOCIETY TO YPBSST ARE NOT IDENTICAL AS CLAIMED BY THE AO IN THE ASSESSMENT ORDER. FROM THE LIST OBTAINED FROM YPBSST, IT IS FO UND T HAT SOME MEMBERS HAVE DONATED A SMALL AMOUNT AS LOW AS RS.4,000/ - AND SOME MEMBERS HAVE DONATED AS HIGH AS RS.3,17,208/ - . SOME MEMBERS HAVE N OT EVEN DONATED ANY AMOUNT TO YPBSST. THEREFORE, IT CANNOT BE SAID THAT THE AP PELLANT SOCIETY HAS MADE IT COMPULSOR Y TO PAY RS. 1,6 5,000/ - TO YPBSS T FOR ACQ UIRING A PLOT OF LAND FOR THEIR ASHRAM. THE ASHRAM OF YPBSST AT SHIRODA, GOA CATERS TO SADHAKS ESPECIALLY, FROM SOUTH MAHARASHTRA, GOA AND KARNATAKA WHO DONATE OUT OF THEIR FREE WILL TO PROMOTE THE CAUSE OF YOGA AND MEDITATION. YPBSST ALSO CLARIFIED THAT THE SAID TRUST DOES NOT RENDER ANY SPECIAL OR SPECIFIC SERVICES TO THE MEMBERS OF THE APPELLANT SOCIETY A ND IT TREATS ALL THE MEMBER OF THE ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 6 PUBLIC WITHOUT ANY DISCRIMINATION AND THERE IS FREE AND UNRESTRICTED ENTRY T O EVERYONE IN THE ASHRAM AT GOA. 4.10. IN VIEW OF THE ABOVE FACTS OF THE APPELLANT'S CASE, IT IS HELD THAT ENTERING OF AGREEMENT PRIOR TO R EGISTRATION OF THE APPELLANT SOCIETY FOR PURCHASE OF LAND DOES NOT MAKE THE APPELLANT INELIGIBLE TO BE TAXED IN THE S TATUS OF A CO - OPERATIVE SOCIETY AS THIS ASPECT THAT IS PROPOSAL TO REGISTER THE SOCIETY IS MENTIONED IN THE AGREEMENT TO SELL. FURTHER, THE AGREEMENT IS MADE ONLY BY MAKI NG A TOKEN PAYMENT OF RS.10,000/ - AS AGAINST THE TOTAL SALE CONSIDERATION OF RS.7,63,0 1,150/ - . MOREOVER, THE PAYMENT MADE BY THE MEMBERS OF THE APPELLANT SOCIETY TO YPBSST IS FOUND TO BE VOLUNTARY AND WITHOUT ANY COMPULSION FROM THE APPELLANT. THE SAID DONATION IS ALSO FOUND TO BE MADE TO PROMOTE THE INDIVIDUAL INTEREST OF THE MEMBERS OF TH E APPELLANT IN MEDITATION. THE AR OF THE APPELLANT PRODUCED BEFORE ME THE LAND RECORDS OF THE LAND PURCHASED WHICH IS A FOREST LAND AND CANNOT BE DEVELOPED FOR ANY COMMERCIAL USAGE. THE LAND CONTINUES TO BE AN AGRICULTURAL/FOREST LAND (THE TRANSFER OF SUC H LAND IS NOT CHARGEABLE TO TAX) AND THEREFORE, THERE IS NO QUESTION OF TAXING THE SAME AS INCOME FROM BUSINESS OF THE APPELLANT. THE DONATIONS MADE BY THE MEMBERS WERE DIRECTLY PAID TO YPBSST AND THE AMOUNT OF DONATIONS WERE NOT ROUTED THROUGH THE BANK AC COUNT OF THE APPELLANT. HENCE, IT CANNOT BE SAID THAT THE AMOUNT RECEIVED BY THE YPBSST AS DONATION IS AN APPLICATION OF INCOME OF THE APPELLANT. SO TO SAY, EVEN THE CONTRIBUTION BY THE MEMBERS IS SHOWN AS LIABILITY IN THE HANDS OF THE APPELLANT THEREFORE, THE SAME CANNOT BE CALLED AS INCOME OF THE APPELLANT BY ANY STRET CH OF IMAGINATION. WHEN THE AMOUNT RECEIVED BY THE APPELLANT FROM ITS MEMBERS IS NOT THE INCOME OF THE APPELLANT, NONE OF THAT RECEIPT CAN BE BROUGHT TO TAX AS REVENUE RECEIPT AND INCOME IN THE HANDS OF THE APPELLANT. IN SUCH A CASE, THE DONATIONS GIVEN TO YPBSST CANNOT BE HELD AS APPLICATION OF INCOME OF THE APPELLANT. HENCE, THE ADDITION MADE BY THE AO AMOUNTING TO RS.2,95,35,000/ - WHICH IS TOTALLY ON WRONG FOOTING IS HEREBY DELETED. GROUND NO.2 TO 6 ARE ALLOWED. 6. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BEFORE US. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE MATERIAL ON RECORD. THE LEARNED D.R. GAVE THE FOLLOWING WRITTEN SUBMISSIONS: - 1. DURING THE GENERAL ELECTION TO THE GOA STATE LEGISLATIVE ASSEMBLY SHRI DHARMARAJ JAGANNATH BHONSLE THE CHIEF PROMOTER CHAIRMAN OF THE SOCIETY SHREE SHIVKRUPANANAD SWAMI VIHAR CO - OPERATIVE HOUSING SOCIETY LTD., WAS FOUND CARRYING CASH AROUND RS. 4,33,500/ - B Y ELECTION TEAM. AFTER FURTHER EXAMINATION BY I.T. DEPARTMENT AN AMOUNT OF RS. 13,14,300/ - ( RS. 5,22,000/ - IN THE POSSESSION OF SRI DHARMARAJ J BHONSLE + RS. 7,92,300 IN HIS BANK LOCKER) WAS SEIZED. THE ASSESSEE FURTHER SUBMITTED THAT THE AMOUNT WAS COLLEC TED FROM THE MEMBERS OF THE SOCIETY AND THE SAME IS ENTERED IN THE REGISTER MAINTAINED. FU RTHER THE BALANCE AMOUNT OF ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 7 RS. 7,92,300/ - KEPT IN THE LOCKER WERE ACCOUNTED IN THE RECEIPT REGISTER OF THE SOCIETY SHREE SHIVKRUPANANAD SWAMI VIHAR CO - OPERATIVE HOUSI NG SOCIETY LTD. 2. CONSEQUENTLY A SEARCH AND SEIZURE ACTION U/S. 132 WAS CARRIED OUT IN THIS CASE AND DOCUMENTS WERE SEIZED. FROM THE PAGE 27 OF THE SEIZED MATERIAL MARKED AS A/SVCHSL/1 DATED 14.02.2012, IT IS NOTICED THAT THE SOCIETY SHREE SHIVKRUPANAND SWAMI VIHAR CO - OPERATIVE HOUSING SOCIETY LTD., SHIVGRAM SHIRODA, PONDA CAME INTO EXISTENCE ON 18.11.2011 VIDE THE REGISTRATION CERTIFICATE ISSUED BY THE ASSISTANT REGISTRAR OF CO - OPERATIVE SOCIETIES , CENTRAL ZONE, GOA. 3. IT IS OBSERVED FROM THE COPY OF THE REGISTERED AGREEMENT OF SALE' EXECUTED ON 2O.10.2O11, SEIZED VIDE PAGE NOS: 33 TO 53 OF THE MATERIAL MARKED AS A/SVCSHL/1 THAT SHREE SHIVKRUPANANAD SWAMI VIHAR CO OPERATIVE HOUSING SOCIETY LTD, REPRESENTED BY ITS CHIEF PROMOTER SHRI DHARMARAJ J. BHONSLE HAD ENTERED INTO AGREEMENT WITH THE LAND OWNERS SHRI DEVENDRA SINGH AND OTHERS FOR THE PURCHASE OF LAND PROPERTY BEARING SURVEY NO 668/1, 669/1, 669/2, 669/3 AND 669/4 ADMEASURING 1,89,300 SQ MTS AT THE VILLAGE SHIRODA, P ONDA FOR TOTAL CONSIDERATION OF RS. 7,63,01,150/ - . IT IS MENTIONED IN THIS AGREEMENT THAT THE SOCIETY HAS PAID CASH RS. 10,000/ - TO THE LAND OWNER ON THE DATE OF EXECUTION OF THIS AGREEMENT AND THE REMAINING AMOUNT OF RS. 7,62,91,ISO/ - SHALL BE PAID IN FOU R MONTHLY INSTALLMENTS OF RS. 1,90,72,787.50 EACH. THE LAND WAS PROPOSED TO BE DEVELOPED INTO A RESIDENTIAL LAYOUT. 4. AS PER PAGE NO 3 OF THE SEIZED MATERIAL MARKED A/SVCSHL/1 , THE MAXIMUM PLOT COUNT IS MENTION AT 262 AND 'TOTAL PLOT BOOKED' AS ON 09.02 .2012 IS SHOWN AT 179.THE CHIEF PROMOTER OF THE SOCIE TY VIDE HIS STATEMENT DATED 13. 02.2012 STATED THAT EACH OF THESE 262 PLOTS ARE TO BE GIVEN TO THE MEMBERS OF T HE SOCIETY FOR AN AMOUNT OF RS. 5,85,000/ - WHICH HAS TO BE SPLI T IN THE FORM OF PAYMENT OF RS. 1,65,000/ - TO THE TRUST NAMELY YOG PRABHA BHARTI SEVA SANSTHAN TRUST AND RS. 3,82,000/ - TO THE SOCIETY SHREE SHIVKRUPANAND SWAMI VIHAR CO - OPERATIVE HOUSING SOCIETY AND AN AMOUNT OF RS. 38,000/ - HAS TO BE PAID IN CASH AS DEVELOPMENT COST. THE SAME IS DULY R EFLECTED IN THE STATEMENT OF RECEIPT AND PAYMENTS. 5. IT. IS FURTHER SEEN FR OM THE COPY OF THE REGISTERED ' AGREEMENT OF SALE' EXECUTED ON 20.10.2011, SEIZED VIDE PAGE NOS: 54 TO 77 OF THE MATERIAL MARKED AS A/SVCHSL/1 THAT YOG BHARTI SEVA SANSTHA TRUST HA D ENTERED INTO AGREEMENT WITH THE LAND OWNERS SHRI DEVENDRA SINGH AND OTHERS FOR THE PURCHASE OF LAND PROPERTY BEARING SURVEY NO 682/1, 682/2, 682/3, 683/1 ADMEASURING 1,16,850 SQ MTS AT THE VILLAGE SHIRODA, PONDA (JUST ADJACENT TO THE LAND PROPERTY PURCHA SED BY THE SHREE SHIVKRUPANAND SWAMI VIHAR CO OPERATIVE HOUSING SOCIETY) FOR TOTAL CONSIDERATION OF RS. 4,70,98,850/ - AND PAID AMOUNT TOTALING TO RS. 1,23,00,OOO/ - VIDE 2 CHEQUES OF RS. 51,00,000/ - AND RS. 72,00,000/ - , AND THE REMAINING AMOUNT WAS AGREED T O BE PAID IN FOUR MONTHLY INSTALLMENTS OF RS. 86,99,712.50 EACH. ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 8 6. WHEN THE MODALITIES OF THE PAYMENTS TO BE MADE TOWARDS THE PROPOSED PLOTS BY THE SOCIETY MEMBERS ARE ANALYZED, IT CAN BE SEEN THAT ANY MEMBER WHO IS BUYING THE PROPOSED PLOT OR WANT TO BE BUY PROPOSED PLOT HAS TO PAY AN AMOUNT TOTALING TO RS. 5,85, 000 / - FOR EACH PLOT. THIS AMOUNT OF RS. 5,85, 000 / - INCLUDES AN AMOUNT OF RS.1,65,000 TO BE PAID TO THE TRUST YOG PRABHA SEVA SANSTHAN TRUST (IN WHICH SHRI DHARMARAJ J. BHONSLE IS A SADHAK) DIRECTL Y. IT SHOWS THAT ONE CAN BUY THE PROPOSED PLO T ONLY IF THE SAID AMOUNT OF RS 1,65, 000 / - IS PAID TO THE TRUST ALONG WITH THE REMAINING AMOUNT PAID TO THE SOCIETY. IN OTHER WORDS ONE WILL NOT GET THE PLOT OF THE SOCIETY IF ONE DENIES TO MAKE PAYMENT OF RS 1,6 5, 000 / - TO THE TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST. THUS THE PLOT BUYER HAS TO COMPULSORY MAKE PAYMENT TO THE TRUST IN ORDER TO BUY PLOT WHICH IS MANDATORY AND NOT VOLUNTARY IN NATURE. IT IS ALSO OBSERVED THAT THERE ARE NO BYE LAWS OF THE SOCIETY W ITH REGARDS TO THE MODALITIES OF PAYMENT STATED ABOVE. 7. IT IS FURTHER NOTICED THAT THE AMOUNT TO BE PAID TO THE TRUST BY ALL THE MEMBERS ARE THE SAME I.E. RS. 1,65, 000 / - WHICH MAKE IT HARD TO BELIEVE THAT EACH MEMBER WILL DONATE THE SAME AMOUNT, AS HAS BEEN CLAIMED. HENCE PAYMENT MADE BY THE SOCIETY MEMBERS TO THE TRUST YOG PRABHA BHARATI SEVA SANSTHA TRUST AS A PART OF THE COST OF THE PLOT ARE COMPULSORY IN NATURE AND NOT AT ALL VOLUNTARY IN NATURE AND HENCE DO NOT ASSUME THE NATURE OF DONATION AS HAS B EEN CLAIMED BY THE SOCIETY. 8. A TOTAL OF 179 MEMBERS HAD PAID THE AMOUNT OF RS. 1,65,000/ - EACH. IN VIEW OF THE ABOVE, IT IS CLEAR THAT AMOUNT OF RS. 2,95,35,000/ - (1,65,000X179) RECEIVED IN THE NAME OF THE TRUST YOG BHARATI SEVA SANSTHA TRUST IS NOTHING BUT APPLICATION OF INCOME OF THE ASSESSEE TRUST AND HENCE NEED TO BE TAXED AS INCOME OF THE ASSESSEE FOR THE A.Y. 2012 - 13. 9. THE ABOVE FACTS WERE BROUGHT TO THE NOTICE OF THE CIT(A) IN THE REMAND REPORT. THE CIT(A) MADE A PASSING MENTION IN PARA 4.5 AT PAGE 9 OF HIS ORDER AND DIDN'T BRING THE ENTIRE DISCUSSION ON RECORD. WHILE DECIDING THE ISSUE THE LD CIT (A) IN PARA 4.9 AT PAGE 14 HAS OBSERVED ' .. IT IS FOUND THAT SOME MEMBERS HAVE DONATED A SMALL AMOUNT AS LOW AS RS.4,000/ - ANS SOME MEMBERS HAVE DONA TED AS HIGH AS RS3,17,208/ - ..............THEREFORE IT CANNOT BE SAID THAT THE APPELLANT SOCIETY HAS MADE IT COMPULSORY TO PAY RSL,65,000/ - TO YPBSST FOR ACQUIRING PLOT...' IT IS NOT THE CASE OF DEPARTMENT THAT THE YPBSST IS COLLECTING DONATIONS OF RS 1 ,65 ,OOO/ - EACH FROM ITS MEMBERS, THE DEPARTMENT IS ONLY CONTENDING THAT ALL THE 179 MEMBERS WHO WERE WILLING TO BUY THE PLOT IN THE SOCIETY WERE REQUIRED TO PAY RS.1.65,000/ - AS IS EVIDENT FROM THE DOCUMENTS FOUND DURING ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 9 THE SEARCH AND EVIDENCED BY THE LIST S UBMITTED BY THE SOCIETY ITSELF WHICH IS ENCLOSED. 10. THUS IT IS PLEADED THAT THE ADDITION MADE OF 2,95,35,0007 - MAYBE SUSTAINED. FURTHERMORE THE LEARNED D.R. REITERATED THAT THE LEARNED CIT(A) HAS NOT FULLY ADDRESSED THE POINTS MADE OUT BY THE AO IN THE REMAND REPORT. HE SUBMITTED THAT THE LEARNED CIT(A) HAS ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AS GO SPEL TRUTH WITHOUT ANY EXAMINATION THEREOF. HE SUBMITTED THAT ON THE FACTS AND CIRCUMSTANCES THE AMOUNT RECEIVED BY YPBSST IS CLEARLY APPLICATION OF THE INCOME OF THE ASSESSEE SOCIETY. HENCE HE SUBMITTED THAT THE AOS ORDER NEEDS TO BE RESTORED . 7. PER CONTRA, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE LEARNED CIT(A). HE SUBMITTED THAT THE MEMBERS OF THE ASSESSEE SOCIETY HAD DULY CONFIRMED THAT THE PAYMENT MADE TO YPBSST WAS VOLUNTARY. HENCE HE SUBMITTED THAT THE LEARNED CIT(A)S ORDER BE CONFIRMED. 8. WE HAVE HE ARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT IN THIS CASE THE MEMBERS OF THE ASSESSEE SOCIETY PURCHASING THE PROPERTY FROM THE SOCIETY HAVE CONTRIBUTED TO THE TRUST. IT WILL BE TOO MUCH O F A COINCIDENCE THAT ALMOST ALL T HE PURCHASERS OF THE PROPERT Y IN THE SOCIETY HAVE SUDDENLY DEVELOPED INTEREST IN YOGA AND MEDITATION AND HAVE VOLUNTARILY AGREED TO CONTRIBUTING TO THE TRUST IN WHICH THE CHIEF PROMOTER OF THE SOCIETY IS SADHAK . THE AOS OPINION IS NOT UNFOUNDED THAT THE CONTRIBUTIONS MADE ARE NOT VO LUNTARILY. THE LEARNED CIT(A) HAS NOT RECORDED THE REMAND REPORT OF THE AO. HE HAS ONLY GIVEN EMPHASIS ON THE REJOINDER OF THE ASSESSEE. HE HAS ACCEPTED THE SUBMISSION OF THE ASSESSEE WITHOUT ANY EXAMINATION. THIS IS EVIDENT FROM HIS OBSERVATION THAT JUST BECAUSE THE AMOUNT HAS NOT BEEN ROUTED THROUGH THE SOCIETY A/C THE ASSESSEES PLEA IS TO BE ACCEPTED. THUS, IN OUR OPINION, IT CANNOT CONCLUSIVELY DISLODGE THE SURROUNDING CIRCUMSTANTIAL EVIDENCE THAT THE CONTRIBUTION BY SOCIETY MEMBER IN THE TRUST WAS NOT VOLUNTARY. ITA NO. 134 /MUM/ 2016 SHEE SHIVKRUPANAND SWAMI VIHAR CHS LTD. 10 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSION THE PRECEDENTS IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE THE ISSUE IN THIS CASE IS REMITTED TO THE FILE OF THE AO. THE AO IS DIRECTED TO CONSIDE R THE ISSUE AFRESH AFTER GIVING THE ASSESSEE OPPORTUNITY OF BEING HEARD. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04.02. 2019 . SD/ - SD/ - ( RAM LAL NEGI ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 04.02. 2019 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) - 2, PANAJI 4. THE PR. CIT (CENTRAL), BANGALORE 5. THE DR, PAN BENCH, ITAT, PANAJI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.