Barnela Charitable Trust, JODHPUR V. DCIT, JODHPUR

ITA 246/JODH/2014

• Counselvise Citation: 24623314 RSA 2014
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: DEEPAK ARORA
• Keywords: Unexplained investment; Value adopted by valuation officer; Unexplained expenditure; Income from undisclosed sources; Search and seizure; Document seized; Charitable institution; Maximum Marginal Rate; Additional evidence; Corroborative evidences; Valuation report; Capital receipt; Documents seized
• Section: 234B; 12A; 132

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) I.T.A. NO. 246/JODH/2014 (A.Y. 2007 - 08) I.T.A. NO. 247/JODH/2014 (A.Y. 2008 - 09) I.T.A. NO. 248/JODH/2014 (A .Y. 2009 - 10) BARNELA CHARITABLE TRUST V S DCIT, CENTRAL CIRCLE - 2, VISHWAKARMA MANDIR, JODHPUR. DANGIYAWAS , JODHPUR. PAN NO. AABTB1451D (APPELLANT) (RESPONDENT) I.T.A. NO. 365/ JODH/2014 ( A . Y . 2005 - 06 ) I.T.A. NO. 366/JODH/2014 (A.Y . 2008 - 09) I.T.A. NO. 3 67/JODH/2014 (A.Y. 2009 - 10) DCIT, V S M/S. BARNELA CHARITABLE TRUST, CENTRAL CIRCLE - 2, VISHWAKARMA MANDIR, DANGIAWAS, JODHPUR. JODHPUR. PAN NO. AABTB1451D (APPELLANT) (RESPONDENT) ASSESSEE BY: - SHRI AMIT KOTHARI, AND SHRI DEEPAK ARORA. DEPARTMENT BY : - SHRI O.P. MEENA - CIT - D.R. DATE OF HEARING : 12 /0 8 /201 4 DATE OF PRONOUNCEMENT : 25 /0 9 /2014 2 O R D E R P E R BENCH : THIS IS A BUNCH OF SIX APPEALS COMPRISING OF CROSS APPEALS FOR AS SESSMENT YEARS 2007 - 08, 2008 - 09 AND 2009 - 10. IN ALL THESE APPEALS IDENTICAL ISSUES, ARISING FROM COMMON SET OF FACTS, ARE INVOLVED, AND WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE WE ARE PROCEEDING TO DECIDE THEM BY THIS COMMON ORDER. THE F ACTS OBTAINING IN A.Y. 2007 - 08 WOULD GIVE A FAIR VIEW OF THE COMMON FACTS OF THESE APPEALS AND IT WOULD COVER ALL THE OTHER APPEALS. ITA NO. 365 AND 246/JODH/2014 A.Y. 2007 - 08. 2. THESE ARE CROSS - APPEALS FILED AGAINST THE ORDER OF LD. CIT(A), DATED 10. 03.2014. THE ASSESSEE IS A TRUST WHO FILED ITS RETURN OF INCOME (ROI) FOR A.Y. 2007 - 08 ON 31.03.2008 DECLARING TOTAL INCOME OF RS. 21,19,041/. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961, [ THE ACT ] FOR SHORT WAS CARRIED OUT AT THE RESIDENCE OF SHRI PUNARAM JANGID ON 15.12.2009 AND 16.12.2009. DURING THIS SEARCH SOME INCRIMINATING DOCUMENTS BELONGING TO THIS TRUST WERE FOUND WHICH WERE SEIZED THROUGH PANCHNAMA DATED 16.12.2009. CONSEQUENTLY A NOTICE U/S 153C OF THE ACT 3 WAS ISSUE D ON 18.08.2011 TO THIS ASSESSEE. THE ASSESSEE - TRUST COMPLIED WITH THIS NOTICE BY FILING ROI ON 10.10.2011 DECLARING TOTAL INCOME OF RS. NIL. THE ASSESSMENT HAS BEEN COMPLETED ON 30.12.2011, U/S 153C R.W.S. 153A/143(3) OF THE ACT, AT A TOTAL INCOME OF RS. 45,3 0,249/ - IN THE STATUS OF AOP INSTEAD OF A TRUST , ON AR R I V ING AT THIS INCOME THE A.O HAS MADE ADDITIONS OF RS. 22,28,000/ - ON ACCOUNT OF UNDISCLOSED SOURCE (AS PER PARA 6 OF AOS ORDER) AND OF RS. 23,02,249/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT (AS PER P ARA 7 OF AOS ORDER). 2.1 BEING NOT SATISFIED, THE ASSESSEE - TRUST FILED FIRST APPEAL AND THE LD. CIT(A), VIDE HIS ORDER DATED 10.03.2014 WHICH IS UNDER CHALLENGE, HAS GIVEN A PART RELIEF. NOW BOTH PARTIES ARE AGGRIEVED AND HAVE FILED ABOVE APPEALS. THE RE VENUE HAS RAISED THE FOLLOWING GROUNDS : - .1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A), ALWAR HAS ERRED IN ACCEPTING ADDITIONAL EVIDENCES WHICH DESPITE REASONABLE OPPORTUNITIES WERE NOT FILED DURING ASSESSMENT PROCEEDINGS RELATING TO THE DONATION RECEIPTS OF RS. 22,28,000/ - CLAIMED BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), ALWAR HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO 4 DELETE THE ADDITION OF RS. 22,28,000 / - MADE BY THE A.O. ON ACCO UNT OF DONATION RECEIPTS TREATED AS UNEXPLAINED INCOME IGNORING THE FACTS THAT THE APPELLANT HAD FAILED TO FURNISH ANY DETAILS, SUPPORTING EVIDENCES, BOOKS OF ACCOUNTS ETC. IN SPITE OF GRATING REASONABLE AND SUFFICIENT OPPORTUNITIES DURING THE ASSESSMENT PROCEEDINGS TO THE ASSESSEE AND THUS THE SOURCES OF CASH DONATIONS REMAINED UNEXPLAINED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), ALWAR HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE A.O. TO TAX THE APPELLANTS INCOME IN THE S TATUS OF A TRUST U/S. 12A OF THE I.T. ACT, 1961 AS AGAINST IN THE CAPACITY OF AOP AT THE MAXIMUM MARGINAL RATE ADOPTED BY THE A.O. 4. THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR ADD TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. THE ASSESSEE - TRUST HA S RAISED THE FOLLOWING GROUNDS : - 1. A. THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 3,95,178/ - ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE ON CONSTRUCTION OF TEMPLE. THE ADDITION SO SUSTAINED IS BAD IN LAW AND BAD ON FACTS. B. THE LD. CIT(A) HAS ERRED IN NOT GRANTING DEDUCTION ON ACCOUNT OF LOCAL PWD SCHEDULE AND FOR SELF SUPERVISION. 5 C. THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF LD. A.O IN MAKING REFERENCE TO VO AND RELYING ON THE VALUATION REPORT WHICH WAS NOT JUSTIFIED . D. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE ALTERNATIVE PLEA OF THE APPELLANT THAT INCOME IF ANY, STANDS UTILIZED FOR CONSTRUCTION OF TEMPLE, AND SINCE INCOME HAD BEEN APPLIED, NO ADDITION WAS CALLED FOR . 2. THE INTEREST CHARGED U/S. 234B A ND 234C IS BAD IN LAW AND BAD ON FACTS. 3. THE APPELLANT PRAYS FOR SUITABLE COSTS. 4. THE APPELLANT CRAVES LIBERTY TO ADD, AMEND, ALTER, AND MODIFY ANY OF THE GROUND OF APPEAL ON OR BEFORE ITS HEARING BEFORE YOUR HONOUR. 2.2 WE HAVE HEARD RIVAL SUBMISS IONS AND HAVE CAREFULLY PERUSED THE ENTIRE RECORD INCLUDING THE WRITTEN SUBMISSIONS OF THE PARTIES . IT IS NOTICED BY US THAT THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF THE ADDITION OF RS. 22,28,000/ - MAINLY THE EVIDENCE ON THE BASIS OF WHICH THE IMPU GNED DELETION HAS BEEN MADE WERE NOT PRODUCED BEFORE THE A.O. 6 DESPITE AMPLE OPPORTUNITIES TO DO SO WERE GIVEN AND THAT FOR CHARGING ASSESSEES STATUS FROM AOP TO TRUST U/S 12A OF THE ACT. 2.3 THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT ADDITION OF RS. 3,9 5,178/ - , ADDED ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE IN THE CONSTRUCTION OF A TEMPLE, HAS BEEN ERRONEOUSLY SUSTAINED. THAT THE A.O. HAS WRONGLY REFERRED THE MATTER OF VALUATION TO THE VALUATION CELL, WHO HAS NOT GIVEN CONCESSION ON ACCOUNT OF PWD R ATES WHICH IS USUALLY AND NORMALLY GIVEN AND THAT WHEN THIS AMOUNT IS A PART OF ASSESSEES INCOME WHICH HAS BEEN APP LIED IT CANNOT BE ADDED IN ITS H ANDS. 2.4 AFTER CONSIDERING RIVAL SUBMISSIONS WE HAVE FOUND THAT THE ASSESSEE - TRUST HAS RECEIVED CERTAIN D ONATIONS TOWARDS ITS FUND WHICH WERE UTILIZED DURING THIS YEAR AS UNDER : - AS PER BALANCE SHEET AS ON TEMPLE FUND DURING THE YEAR 31/03/2007 22,28,000 22,28,000 31/03/2008 44,99,000 22,71,000 31/03/2009 53,83,000 8,84,000 31/03/ 2010 57,42,000 3, 59,000 7 SINCE THE ASSESSEE - TRUST DID NOT EXPLAIN THIS POSITION, THE A.O. HAS MADE ADDITION OF RS. 22,28,000/ - . FURTHER, THE A.O. HAS REFERRED THIS MATTER U/S 142A OF THE ACT TO THE VALUATION CELL FOR DETERMINING THE INVESTMENT IN QUESTION. THE VALUATION O FFICER VIDE HIS REPORT DATED 28.12.2011 (AT THE FAG END) HAS DETERMINING THE VALUATION AS UNDER : - THIS EXERCISE HAS RESULTED INTO AN ADDITION OF RS. 23,02,249/ - . THE A.O. HAS ALSO NOTICED THAT THE ACTIVITIES OF TRUST AS PER I TS DEED ARE NOT CARRIED OUT IN TERM OF ITS OBJECTS, THEREFORE, HE HAS ASSESSED THE TRUST IN THE STATUS OF (ASSOCIATION OF PERSONS (AOP) INSTEAD OF CLAIMED AS A TRUST. 2.5 B OTH PARTIES HAVE REITERATED THEIR RESPECTIVE STANDS ON THE ISSUES IN QUESTION. AFT ER CAREFULLY COGITATING STANDS AND CIRCUMSPECTING THE ENTIRE RECORD MADE AVAILABLE BEFORE US, WE HAVE FOUND IT FOR CERTITUDE THAT THE VALUATION AS PER DVO REPORT DURING THE YEAR LAND AT DANGIAWAS K.NO. 223/2 TEMPLE WIP 31/03/2007 2302249 1907071 65000 19,72,071 31/03/2008 2505022 2075039 65000 40,47,110 31/03/2009 1255316 1039843 65000 50,86,953 31/03/2010 703412 582672 65000 56,69,625 67,66,000 8 ASSESSEE - TRUST WAS REGISTERED U/S 12A OF THE ACT. WE HAVE ALSO FOUND THAT WHATEVER EVIDENCE WERE PRODUCED HAVE BEEN DULY A CCEPTED BY LD. CIT(A) UNDER RULE 46A OF THE INCOME TAX ACT. THE A.O. HAS SENT HIS R.R. IN RESPECT OF WHICH THE ASSESSEE HAS ALSO MADE SUBMISSIONS. ALL THESE DOCUMENTS ARE AVAILABLE TO PAGE 1 TO 133 OF ASSESSEES PAPER BOOK. THE ENTIRE WRITTEN SUBMISSIONS INCLUDING R.R. OF THE A.O. AND THE OBJECTIONS OF THE ASSESSEE - TRUST AGAINST THIS R.R., ARE BEING INCORPORATED BELOW IN ITALICS. THE LD. COUNSEL FOR THE ASSESSEE IN HIS WRITTEN SUBMISSIONS HAS SUBMITTED AS UNDER: 1. THE APPELLANT HAD CHALLENGED THE ADDITIO N SUSTAINED ON ACCOUNT OF CONSTRUCTION OF TEMPLE ON THE BASIS OF VALUATION REPORT OF THE V0, BY NOT GRANTING DEDUCTION FOR NOT ADOPTING LOCAL PWD SCHEDULE, AND FOR SELF SUPERVISION. IN GROUND 1 IN ALL THE YEARS, FOLLOWING ADDITION HAS BEEN CHALLENGED : A. Y. 2007 - 08 : RS. 3,95,178/ - A.Y. 2008 - 09 : RS. 4,29,983/ - A.Y. 2009 - 10 : RS. 2,15,473/ - 9 2. IN THE ASSESSMENT ORDER, THE ID. 'A.O. MADE THE ADDITION FOR THE ENTIRE RECEIPTS AND THE AMOUNT OF ADDITION MADE IS AS UNDER : 3. THE LD. AO FURTHER MADE ADDITION OF THE INVESTMENT MADE IN THE CONSTRUCTION OF TEMPLE ON THE BASIS OF VALUATION REPORT GI VEN BY THE VO WITHOUT EVEN CONFRONTING THE ASSESSEE ON THIS ISSUE. 3. THE LD. AO MADE FOLLOWING ADDITIONS IN THE VARIOUS YEAR UNDER CONSIDERATION AS UNDER : ASSESSMENT YEAR RECEIPT ON ACCOUNT OF D ONATION FOR CONSTRUCTION OF TEMPLE TREATED AS INCOME BY THE AO. 2007 - 08 22,28,000/ - 2008 - 09 22,71,000/ - 2009 - 10 8,84,000 / - A .Y. VALUE DECLARED BY THE ASSESSEE ON CONSTRUCTION OF TEMPLE VALUE ESTIMATED BY DVO AND ADDITION MADE FOR THIS VALUE IN THE ORDER. DIFFERENCE 2007 - 08 19,07,071 23,02,249 3,95,178 2008 - 0 9 20,75,039 25,05,022 4,29,983 2009 - 10 10,39,843 12,55,316 2,15,473 10 ASSESSMENT YEAR ADDITION ON ACCOUNT OF RECEIPTS FOR TEMPLE CONSTRUCTION ADDITION ON ACCOUNT OF EX PENDITURE AS PET DVO'S REPORT. TOTAL ADDITION 2007 - 08 2228000 2302249 4530249 2008 - 09 2271000 2505022 4776022 2009 - 10 884000 1255316 2139316 4. IN THE A PPELLATE PROCEEDINGS, THE ID. CI T(A) ALLOWED THE OPPORTUNITY TO SUBMIT DETA ILS IN RELATION TO VALUATI ON MADE BY VO, AND THE REMAND R EPORT WAS BEING CALLED FOR FROM THE ID. A.O. 5. THE ID. CIT(A) HOWEVER RESTRICTED THE AMOUNT OF ADDITION TO THE DIFFERENCE OF THE VALUE AS ESTIMATED BY THE VO AND AS SHOWN BY THE APPELLANT IN HIS AUDITED BOOKS, AND ACCORDINGLY FOLLOWING ADDITION WAS SUSTAINED. ASSESSMENT YEAR DIFFERENCE 2007 - 08 3,95,178 2008 - 09 4,29,983 2009 - 10 2,15,473 11 7. THE APPELLANT HAD CONTENDED THAT EVEN IF DEDUCTION FOR VALUATION TO BE MADE AS PER LOCAL PWD RATES AND SELF SUPERVISION IS ALLOWED, THE DIFFERENCE WOULD BE VERY NOMINAL WHICH WOULD HARDLY JUSTIFY ANY ADDITION. 8. YOUR KIND ATTENTION IS ALSO INVITED TOWARDS THE FOLLOWING DECISIONS WHICH SUPPORTS THE CONTENTION OF THE APPELLANT THAT THE ABOVE REFERRED DEDUCTION ALSO DESERVES TO BE CONSIDERED FR OM THE VALUE AS MADE BY THE VALUATION OFFICER: I . CIT V. HOTEL JOSHI (2000) 242 ITR 478 (RAJ.) II. UTTAM CHAND NAHAR V. ITO (2002)28 TAX WORLD 435 (ITAT, JD) III. SANDEEP LOOMBA VS. ACIT (2 0 01) 2 6 TAX WORLD 288 (ITAT, JP) IV. CIT VS. PRATAPSINGH AMROSINGH RAJENDRA SIN GH 200 ITR 788 (RAJ) V. ITO VS. TEK CHAND (1995) 52 ITD 197 (JP) VI. SURENDERA PAL VERMA VS. ACIT (2004) 89 ITD 129 (TM)(CHD) VII. ITO VS. PRAKASH CHAND SURANA (1979) 7 TTJ 29 (JP.) VIII. CIT V. ELEGANT HOMES (2002) 259 ITR 232 (RAJ) IX. CIT V. DINESH TALWAR (2004) 265 ITR 344 (RAJ) X. ITO V. L.N.MEMORIAL & HOSPITAL RESEARCH CENTER 107 TTJ (JD) 291 XI. SUWALAL GIRIRAJ AJMERA V. ITO 86 TTJ (JD) 414 9. THE ID. CIT(A) DELETED THE ADDITION FOR DONATIONS RECEIVED AS THE SAME WERE BEING RECEIVED FOR CONSTRUCTION OF TEMPLE AND THE SAME WAS BEI NG DULY CONSTRUCTED. THE DONATIONS RECEIVED FOR THE SPECIFIC PURPOSES WERE CORPUS DONATIONS. IN THE CASE OF ST. ANN'S HOME FOR 12 THE AGED, (1982) 17 TTJ (BANG.) 185, IT HAS BEEN HELD THAT VOLUNTARY CONTRIBUTIONS EXPRESSLY RECEIVED FOR CONSTRUCTION OF A BUILD ING WERE CORPUS DONATIONS, SINCE THEY WERE RECEIVED AND UTILIZED FOR A CAPITAL PURPOSE, IN THE CASE OF ANGEL CHARITIES V/S ITO (1988) 27 ITD 545 (DEL.), THE RECEIPTS FROM STAGING OF A DRAMA FOR COLLECTION OF FUNDS FOR A NEW BUILDING WAS HELD TO BE CORPUS D ONATIONS. IN THE CASE OF ITO V/S SATYA KABIR SHABANI GADI (1994) 50 TTJ (AHD.) 501, THE TRIBUNAL HELD THAT 'BUILDING FUND' AND 'KAYAMI FUND' WERE CORPUS OF THE TRUST AND DONATIONS RECEIVED TOWARDS SUCH FUNDS WERE CORPUS DONATIONS. 10. IN ANY CASE EVEN IF ANY PART OF THE ADDITION IS BEING SUSTAINED, THE SAME IS TREATED AS ON REVENUE ACCOUNT AND IS TAKEN TO INCOME, THE ASSESSEE HAS UTILIZED THIS FUND INTO THE CONSTRUCTION OF TEMPLE, THEREFORE THE BENEFIT OF DEDUCTION OF THE SAME DESERVES TO BE ALLOWED. 11. IN VIEW OF ABOVE FACTS AND LAW THE ADDITIONS SO PARTLY SUSTAINED BY THE ID. CIT(A) DESERVES TO BE FULLY DELETED. GR. NO. 2 : INTEREST U/S 234B AND 234 C THE APPELLANT PRAY FOR CONSEQUENTIAL RELIEF. GR. NO. 3 : PRAYER FOR COST. THE APPELLANT PRAY FOR SUITABLE CO ST AS MAY BE CONSIDERED APPROPRIATE BY THE HON'BLE TRIBUNAL. 13 GR. NO. 4 : GENERAL IN NATURE. DEPARTMENT'S APPEAL : GR. NO. 1 : ADMISSION OF ADDITIONAL EVIDENCE A. THE ADDITIONAL EVIDENCES SUBMITTED TO THE ID. CIT(A) WERE FORWARDED TO THE ID. A.O., WHO HAD E XAMINED THE DETAILS AND INFORMATION SUBMITTED FOR MORE THAN A YEAR. THE ADDITIONAL EVIDENCE WERE PROVIDED TO AO FROM CIT(A) VIDE LETTER DATED 5.2.13. REMAND REPORT WAS SUBMITTED ON 20.2.14 . VARIOUS HEARINGS WERE CONDUCTED BY THE AO. B. NO INCRIMINATING MATE RIAL WAS FOUND IN SEARCH, IT WAS THEREFORE THE PRIMARY ONUS ON THE AO TO PROVE BY EVIDENCE THAT THE CREDITS REPRESENTS INCOME. THE PURPOSE OF ASSESSMENT IS TO PROPERLY APPRECIATE THE FACTS, AND IF THE DETAILED FACTS WERE BEING MADE AVAILABLE THE SAME SHOUL D NOT BE DENIED. C. THE ID. CIT(A) HAD VALIDLY ACCEPTED THE ADDITIONAL EVIDENCES, AND IN THIS REGARD RELIANCE IS PLACED ON FOLLOWING DECISIONS : JUTE CORPORATION OF INDIA LTD. VS. CIT. (1991) 187 ITR 688 (SC) CIT VS. KANPUR COAL SYNDICATE(1964) 53 ITR 225 (SC) CIT VS. PIONEER PRESS (P) LTD. (2001) 170 CTR (MAD) 152 CIT VS. K. RAVINDRANATHAN NAIR (2003) 184 CTR (KER) 46 : (2004) 265 ITR 217 (KER) CIT VS. SURETECH HOSPITAL & RESEARCH CENTRE LTD. (2007) 293 14 ITR 53 (BOM) CIT VS. PARIMAL KANTI CHANDA (2007) 291 ITR 77 (GAU) CIT VS. PODDAR SWADESH UDYOG (P) LTD. (2007) 295 ITR 252 (GAU) ACIT VS. VENKATESHWAR ISPAT (P) LTD. (2009) 319 ITR 393 (CHHATTISGARH) SMT. PRABHAVATI S. SHAH VS. CIT (1998) 231 ITR 1 (BOM) ITO VS. INDUSTRIAL ROADWAYS ITAT, MUMBAI 'K' BENCH (2007) 112 TTJ (MUMBAI) 157 SURMUKH SINGH VS. ITO (2008) 115 1TJ (ASR) 852 ANMOL COLOURS INDIA (P) LTD. VS. ITO (2009) 121 TTJ (JP) 269 SHAHRUKH KHAN VS. DCIT (2007) 13 SOT 61 (MUMBAI) J.TO VS. DWARKA PRASAD VS. ITO (1998) 60 TTJ (PAT)(TM) 2 92 GR.NO.2 : ADDITION FOR DONATION RECEIVED: 2007 - 08 : RS.22,28,000/ - 2008 - 09 : RS. 22,71,000/ - 2009 - 10 : RS. 8,84,000/ - A.O. P. 2 PARA 6 CIT(A) P.15 PARA 5.5 TO 5.14 A. THIS GROUND OF APPEAL IS ALSO CONNECTED WITH THE GROUND OF APPEAL OF THE ASSESSE E, AND OUR SUBMISSIONS MADE IN RELATION TO THE ASSESSEE'S APPEAL MAY ALSO KINDLY BE CONSIDERED. 15 B. THE DONATIONS WHICH HAD BEEN RECEIVED BY THE ASSESSEE HAD ALREADY BEEN SHOWN AS INCOME BY THE APPELLANT, HOW SUCH RECEIPTS CAN BE ONCE AGAIN INCLUDED AS INCO ME. IF ANY ADDITION IS MADE THIS WILL AMOUNT TO DOUBLE ADDITION OF INCOME. C. THE ID CIT(A) HAD RIGHTLY DELETED SUCH ADDITION. D. DONATIONS WERE RECEIVED FOR CONSTRUCTION OF TEMPLE AND THE SAME HAD BEEN UTILIZED IN CONSTRUCTION OF TEMPLE WHICH IS ALSO EVIDENT FROM THE VALUATION REPORT OF THE VO. E. THE ASSESSEE HAD SHOWN THESE DONATIONS AS CORPUS DONATION AS TEMPLE FUND WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 12(1) WHICH SAYS THAT ANY VOLUNTARY CONTRIBUTION SHALL NOT INCLUDE THE DONATIONS RECEIVED WITH SPECIFIC DIRECTION. THESE SHALL THEREFORE BE TREATED AS CAPITAL RECEIPT. F. SINCE THERE IS APPLICATION OF INCOME RECEIVED, WHATEVER TREATMENT IS BEING GIVEN TO THESE DONATIONS, THE ASSESSEE BEING A REGISTERED TRUST, THE BENEF IT OF AMOUNT SPENT IN CONSTRUCTION OF TEMPLE WILL, HAVE TO BE GIVEN AGAINST THIS INCOME. G. EVEN IF THE ID. AO TREATS THIS DONATIONS AS ANONYMOUS DONATIONS AS PER SECTION 115BBC, THE SAME IS NOT APPLICABLE IN THE CASE OF A RELIGIOUS TRUST, AND SUCH RELIGIOU S TRUST CAN ALSO ACCEPT SUCH DONATIONS. H. THE ADDITION WAS THEREFORE RIGHTLY DELETED. 16 GR. NO. 3 : DIRECTING TO A.O. P. 3 PARA 8 CIT(A) P. 19 PARA 6.5 ADOPT STATUS OF TRUST AS AGAINST AOP A. THE ID. CIT(A) HAD RIGHTLY TREATED THE ASSESSEE AS A TRUST, AS THE SAME IS DULY REGISTERED U/S 12A OF THE I.T. ACT. B. THE REGISTRATION U/S 12A WAS DULY GRANTED BY THE ID. CIT - II, JODHPUR VIDE LETTER NO. 1409 DATED 10.10.2006 WHICH WAS SUBMITTED TO THE ID. AO DURING ASSESSMENT PROCEEDINGS, (P.B. 29 - 30) C. THE AO IN THE ASSESSMENT ORDER STATED THAT 12A REGISTRATION OR REGISTRATION WITH REGISTRAR WAS NOT SUBMITTED, WHICH WAS FOUND TO BE FACTUALLY INCORRECT. IN REMAND REPORT ALSO THIS FACT HAS NOT BEEN CONTROVERTED. IN REMAND REPORT NEW PLEA WAS RAISED THAT' REGIS TRATION WITH CHARITY COMMISSIONER WAS NOT SUBMITTED, WHICH IS NOT APPLICABLE AT AIL IN THE STATE OF RAJASTHAN. D. IN VIEW OF REGISTRATION ALREADY BEING GRANTED, THE ID. CIT(A) WAS RIGHT IN DIRECTING .TO TAKE THE STATUS OF TRUST, AND THE SAME CANNOT BE TAKEN AS AN AOP THE LD. D.R IN HIS WRITTEN SUBMISSIONS HAS STATED AS UNDER: IN THIS CONNECTION, AS DESIRED THE REQUIRED WRITTEN SUBMISSIONS/REPORT IN RESPECT OF EACH OF THE GROUNDS TAKEN BY THE DEPARTMENT IN THE APPEALS FILED BY THE DEPTT. IN RESPECT OF A.Y. 2007 - 08 ARE SUBMITTED AS UNDER: - 17 IN THIS CASE, THE ASSESSEE HAD NOT FILED ITS ORIGINAL RETURN OF INCOME FOR THE A.Y. 200 7 - 08 . DURING THE COURSE OF SEARCH AT THE RESIDENCE OF SHRI PUNARAM JANGID ON 15.12.2009 TO 16.12.2009 CERTAIN DOCUMENTS AS PER PANCHA NAMA PREPARED ON 16.12.2009 WERE FOUND AND SEIZED. ON THE EXAMINATION OF THESE SEIZED DOCUMENTS IT WAS FOUND THAT SOME PAPERS BELONG TO ASSESSEE. THEREFORE, SATISFACTION NOTE WAS RECORDED ON 18.08.2011 IN THE CASE OF SEARCHED PERSON I.E. SHRI PUNARAM JANGI D INITIATING ACTION U/S 153C OF THE ACT IN THE CASE OF ASSESSEE. ON THE BASIS OF THESE FINDINGS AFTER RECORDING ANOTHER SATISFACTION ON 18.08.2011 IN THE CASE OF ASSESSEE, NOTICE U/S 153C OF THE ACT WAS ISSUED ON 18.08.2011 WHICH WAS DULY SERVED UPON THE A SSESSEE. 3. IN RESPONSE TO THE ABOVE NOTICE, THE ASSESSEE FILED THE RETURN ON 10.10.2011 DECLARING TOTAL INCOME OF RS. NIL/ - FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSMENT WAS FINALIZED AS PER ORDER U/S 153C R.W.S. 153A/143(3) DATED 29.12.2011 DETERMINING THE TOTAL INCO ME AT RS. 45,30,249 / - . THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE THE LD. CIT(APPEAL) (CENTRAL), JAIPUR WHICH WAS TRANSFERRED TO THE LD. CIT(APPEALS), ALWAR. THE LD. CIT(A), ALWAR HAS DECIDED THE SAID APPEAL VIDE ORDER IN ITA NO . 555 /2011 - 12 DATED 28 /03/2014. THE LD. CIT(A), ALWAR'S ORDER WAS NOT ACCEPTED BY THE DEPTT. AND FURTHER APPEALS BEFORE THE HON'BLE ITAT HAVE BEEN FILED BY THE DEPTT. ON 29 - 0 5 - 2014, AS AUTHORIZED VIDE THE WORTHY CIT(C), JAIPUR'S AUTHORIZATION LETTER NO. CI T(C)/(TECH.) /253(2)/ 18 2014 - 15/68 3 DATED 0 3 .06.2014 . T HE ASSESSEE HAD ALSO PREFERRED FURTHER APPEAL. 4. THE ISSUES/ADDITION INVOLVED AND DECIDED ARE DISCUSSED AND THE COMMENTS ARE OFFERED AS UNDER: (1) ADMISSION OF ADDITIONAL EVIDENCES UNDER RULE 46A: - IN T HIS CASE, SINCE THE ASSESSEE HAD FURNISH ED SOME ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A) IN THE FIRST APPEAL FILED BY IT, A DETAILED REMAND REPORT IN RESPECT OF DIFFERENT ISSUES RAISED IN APPEAL WERE SUBMITTED TO THE LD. CIT(A), ALWAR, VIDE THIS OFFICE L ETTER NO. DCIT/CC - 2/JODH./REM. REP./2013 - 14/706 DATED 17/02/2014. A PHOTOCOPY OF THE SAID REMAND REPORT IS ENCLOSED HEREWITH FOR YOUR KIND INFORMATION AND READY REFERENCE. IN VIEW OF THE SUBMISSIONS MADE IN THE SAID REMAND REPORT AND THE PECULIAR FACTS AN D CIRCUMSTANCES OF THE CASE, THE UNDERSIGNED HAD STRONGLY OBJECTED TO THE ADMISSIBILITY OF THE ADDITIONAL EVIDENCES EVEN IN VIEW - OF - THE - PROVISIONS OF RULE 46A OF TH E I. T. R ULES . 1962. THEREFORE, KEEPING IN VIEW THESE FACTS AND VARIOUS CASE LAWS, THE PLEA OF THE ASSESSEE TO ADMIT THE ADDITIONAL EVIDENCES SHOULD NOT HAVE BEEN ENTERTAINED AND HENCE THE SAME DESERVED TO BE REJECTED. ACCORDINGLY, THE HON'BLE ITAT MAY KINDLY BE REQUESTED TO CONSIDER THESE FACTS AND CIRCUMSTANCES AND NOT TO ALLOW THE SAID ADDITIO NAL EVIDENCES PRODUCED BEFORE LD. CIT(A). 19 IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE SAID ADDITION AND HENCE THE HON'BLE ITAT MAY KINDLY BE REQUESTED TO SET - ASIDE THE ORDER OF THE LD. CIT(A) AND UPHOLD T HE ADDITION MADE BY THE AO ON THIS GROUND AS DISCUSSED IN THE ASSESSMENT ORDER. (2) UNEXPLAINED DONATION RECEIPTS RS. 22,2 8,000/ - : THE APPELLANT TRUST HAS RECEIVED THE FOLLOWING DONATIONS IN TRUST FUND AND MADE THE FOLLOWING INVESTMENTS WHICH WERE HELD TO BE TREATED AS NOT GENUINE IN ABSENCE OF ANY DETAILS FILED/PRODUCED DURING THE ENTIRE ASSESSMENT PR OCEEDINGS. DONATIONS IN THE TRUST CAPITAL A/C HAVE BEEN SHOW N AS UNDER: - THE ASSESSEE TRUST HAD FAILED TO FILE ANY DETAILS REGARDING DONATIONS RECEIVED NOR WERE BOOKS OF ACCOUNTS PRODUCED TO ESTABLISH SOURCES OF DONATIONS OR INVESTMENTS RECEIVED FOR ANY OF THE ASSESSMENT YEARS. HENCE THE GENUINENESS OF THE DONATIONS CLAIMED TO BE RECEIVED WAS NOT ESTABLISHED AND THE SAME WERE THEREFORE TREATED AS UNEXPLAINED AND CONSIDERED THE ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES, IN THE ASSESSMENT ORDERS FOR THE AYS 2007 - 08, 2008 - 09, 2009 - 10 & 2010 - 11. AS PER BALANCE SHEET AS ON TEMPLE FUND DURING THE YEAR 01.04.2007 8,98,000 - 31.03.20 07 22,28,000 22,28,000 31.03.2008 44,99,000 22,71,000 31.03.2009 53,83,000 8,84,000 31.03.2010 57,42,000 3,59,000 20 IN THE FIRST APPEAL, THE ASSESSEE HAD CONTENDED THAT THE ADDITIONS WERE MADE BY THE A.O. IN RESPECT OF ENTIRE AMOUNT OF DONATION RECEIVED TOWARDS THE TEMPLE CONSTRUCTION . FURTHER, ON THE BASIS OF THE VALUATION REPORT OF THE TEMPLE CONSTRUCTION ALSO THE ADDITION FOR ENTIRE AMOUNT OF EXPENDITURE ON THE TEMPLE CONSTRUCTION WAS MADE. HE HAS CHALLENGED BOTH THESE ADDITIONS, IN THE FIRST APPEAL. THE ASSESSEE HAD CONTENDED THA T THE RECEIPTS TOWARDS DONATION SHOWN DURING THE A.Y.'S 2007 - 08 TO 2010 - 11 WERE DONATIONS FOR CONSTRUCTION OF TEMPLE AND THEREFORE CORPUS DONATIONS AND THEREFORE BEEN SHOWN IN TEMPLE FUND. IN THIS CONNECTION IT IS SUBMITTED THAT THE ASSESSEE DURING THE E NTIRE ASSESSMENT PROCEEDINGS HAD FAILED TO PRODUCE ANY BOOKS OF ACCOUNTS, DONATION RECEIPT BOOKS, OR EVEN A SINGLE BILL VOUCHER, COPY OF CONTRACT, IN RESPECT OF CONSTRUCTION EXPENSES, MATERIAL PURCHASE OR LABOUR EXPENSES ETC.. NOR ANY SUCH SINGLE DETAILS O R EVIDENCES WERE FURNISHED DURING THE ENTIRE REMAND PROCEEDINGS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE TRUST HAS FAILED TO FILE ANY DETAILS REGARDING DONATIONS RECEIVED NEITHER BOOKS OF ACCOUNTS ARE PRODUCED TO ESTABLISH SOURCES OF DONATIONS OR INVESTMENTS RECEIVED FOR ANY OF THE ASSESSMENT YEARS. HENCE THE GENUINENESS OF THE DONATIONS CLAIMED TO BE RECEIVED WAS NOT ESTABLISHED AND HENCE THE SAME WERE HELD TO BE TREATED AS UNEXPLAINED AND CONSIDERED THE ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES IN THE ASSESSMENT ORDER PASSED. 21 THE LD. CIT(A), HAS DISCUSSED ALL THE ISSUES IN PARAS 5 TO 5.15 (PAGES 2 - 17) - BEING THE INTER - CONNECTED. THE LD. CIT(A) HAS ALLOWED/ADMITTED THE ADDITIONAL EVIDENCES SUBMITTED BY THE APPELLANT FOR THE FIRST TIME DURI NG T HE APPELLATE PROCEEDINGS. A REMAND REPORT WAS ALSO SUBMITTED BY THE A.O. VIDE THIS OFFICE LETTER DATED 17/02/2014. THE LD. CIT(A) HAS OBSERVED THAT THE A.O. HAS MADE THE ADDITION ONCE FOR THE DONATIONS RECEIVED BY THE TRUST AND SECONDLY FOR UNEXPLAINED INVESTMENTS MADE IN THE CONSTRUCTION OF THE TEMPLE. THE LD. CIT(A) HAS FURTHER OBSERVED THAT THE APPELLANT'S CASE DOES NOT FALL WITHIN THE PURVIEW OF THE PROVISIONS OF SECTION 11 ( 1 )(I)(A) OF THE I.T. ACT AND NO PART OF THE INCOME BECOMES TAXABLE UNDER THE PROVISIONS OF SECTION 11 OF THE I.T. ACT, 1961. HE FURTHER HELD THAT PROVISIONS OF SECTION 13(1 )(A) (WHICH DEAL WITH A TRUST FOR PRIV ATE RELIGIOUS PURPOSES) AND 13(1 )(D) OF THE I.T. ACT (WHICH PROVIDES FOR MODES OF INVESTMENT OF SURPLUS FUNDS OF THE TRUST ) ARE ALSO NOT APPLICABLE IN THIS CASE. THE LD. CIT (A) HAS ALSO HELD THAT THE PROVISIONS OF SECTION 115BBC AS REGARDS THE RECEIPT OF ANONYMOUS DONATIONS BY THE TRUST ARE CONCERNED ARE NOT APPLICABLE IN THIS CASE, TREATED, BY HIM AS A RELIGIOUS TRUST. HE H AS HELD THAT THE TRUST IS REGISTERED U/S 12A OF THE I.T. ACT, 1961 AND FURTHER THAT THE ADDITION OF RS. 22,28,000/ - MADE BY THE A.O ON ACCOUNT OF DONATION RECEIVED DURING THE YEAR WAS NOT JUSTIFIED AND ACCORDINGLY HAS DIRECTED TO DELETE THE ADDITION MADE. 22 FROM THE FACTS DISCUSSED BY THE AO IN THE ASSESSMENT ORDER, FACTS AND COMMENTS GIVEN IN THE REMAND REPORT SUBMITTED BY THE A.O. AND THE FINDINGS OF THE LD. CIT(A), THE DECISION OF THE LD. CIT (A) IS NOT ACCEPTABLE/JUSTIFIED FOR THE FOLLOWING REASONS : - (I) IN THIS CASE, DURING THE ASSESSMENT PROCEEDINGS MORE THAN REASONABLE AND SUFFICIENT OPPORTUNITIES WERE GRANTED TO THE APPELLANT FOR SUBMISSION OF RELEVANT DETAILS, BOOKS OF A/C'S SUPPORTING EVIDENCES ETC., AS MENTIONED IN THE REMAND REPORT. HOWEVER, T HE ASSESSEE HAD FAILED TO COMPLY AND HENCE THE ADDITIONS WERE MADE. THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCES UNDER RULE 46A OF T H E I.T. RULES, 1962. (II) IN THIS CASE, NO RETURN OF INCOME U/S 139(1) FOR A.Y.S 2007 - 08 AND 2008 - 09 WAS FURNISHE D BY THE ASSESSEE. IN RESPECT OF AYS, 2009 - 10 AND 2010 - 11, IT HAS FURNISHED ITS RETURN OF INCOME U/S 139(1) OF THE I.T. ACT, 1961 ON 28/03/2011. THE DETAILS ARE SUMMARIZED AS UNDER: - (III) THE LD. CIT(A) HAS ERRED IN APPRECIA TING THE FACT THAT THE TRUST CAME INTO EXISTENCE ON 15/04/2006, I.E. RELEVANT TO THE A.Y. 2007 - 08, IN THAT CIRCUMSTANCES, HOW IT COULD BE POSSIBLE THAT THERE WAS OPENING BALANCE AS ON 01/04/2006, OF TEMPLE FUND AT RS. 8,98,000/ - AND WORK IN PROGRESS A.Y. RETURN U/S 139(1) RETURNED INCOME RETURN U/S 153 A RETURNED INCOME AUDIT REPORT DATE 2007 - 08 NOT FILED - 10/10/2011 NIL 07/10/2011 2008 - 09 NOT FILED - 10/10/2011 NIL 07/10/2011 2009 - 10 28/03/2011 NIL 10/10/2011 NIL 25/03/2011 2010 - 11 28/03/2011 NIL 10/10/2011 NIL 25/03/2011 23 OF TEM PLE CONSTRUCTION WORK AT RS. 8,40,996/ - . THE OPENING BALANCE CLAIMED AS ON 01/ 04/2006 WHEN THE TRUST WAS NOT IN EXISTENCE IN THESE CIRCUMSTANCES CANNOT BE TREATED AS VALID OR ACCEPTABLE. HENCE, THE OPENI NG BALANCE CLAIMED AS ON 01/04/ 2006 ALONG WITH RECE IPTS/EXPENDITURE DURING THE YEAR TREATED AS PART OF THE PERIOD RELEVANT TO A.Y. 2007 - 08 AND WAS TREATED UNEXPLAINED, AS THE SOURCES OF THE DONATIONS CLAIMED NEITHER AS OPENING BALANCE AS ON 01/04/2006 AS RECEIVED NOR THE OPENING BALANCE WERE NOT SUBSTANTIA TED NOR EXPLAINED DURING THE ENTIRE ASSESSMENT PROCEEDINGS. SIMILARLY, THE RESPECT OF A.Y.S 2008 - 09, 2009 - 10 AND 2010 - 11, ALSO, NO ANY DETAILS, SUPPORTING EVIDENCES, REGARDING ANY RECEIPT OF DONATIONS WERE FURNISHED. THUS, THE ENTIRE AMOUNTS OF TH E DONATIO N CL AIMED HAS COME FROM ANONYMOUS D ONATION - I.E. UNDISCLOSED S O URCES AND HENCE CANNOT BE TREATED AS EXPLAINED OR GENUINE. SIMILARLY THE EXPENDITURE CLAIMED ON TEMPLE WIP WAS NOT SUBSTANTIATED WITH ANY EVIDENCES. (IV) THE LD. CIT(A) HAS IGNORED THE FACT THAT TH ERE ARE 4 TRUSTEES IN THE TRUST NAMELY, (I) SH. PUNA RAM JANGID S/O SHRI HARCHANDRAM JANGID (II). S.T. PREMLATA JANGID W/O SH. PIMA RAM JANGID, (III) SH. JAGDISH JANGID S/ O SHRI HARCHANDRAM JANGID AND (IV) SH. SUKH RAM JANGID S/O SHRI HARCHANDRAM JANGID, ALL OF WHOM ARE FAMILY MEMBERS ONLY. THUS, THE TRUST WAS ESTABLISHED AND HAS BEEN RUN JUST LIKE ANY OTHER FAMILY BUSINESS CONCERN AND NOT AS ANY CHARITABLE TRUST. 24 (V) THE LD. CIT(A) HAS IGNORED THE FACT THAT DURING THE SEARCH AT THE RESIDENCE OF SHRI PUNAR AM JANGID, A LOOSE PAPER FILE CONTAINING SEVERAL INCRIMINATING PAPERS WAS SEIZED WHICH HAS BEEN MARKED AS ANNE X URE AS - 18 PAGE 69 OF THIS ANNEXURE IS A LOOSE PAPER WHICH WAS TORN OUT BY THE ASSESSEE AND RECONSTRUCTED. THE SAID PAPER CONTAINS NAMES OF PERSON S WITH AMOUNTS OF DONATIONS IN CODE. SHRI PUNARAM JANGID HAD SURRENDERED A SUM OF RS. 26 LACS ON THIS GROUND, IN HIS INDIVIDUAL CAPACITY DURING THE SEARCH OPERATION, WHICH ALSO SUBSTANTIATES THE FACT THAT THE ACTIVITIES, DONATIONS CLAIMED AS RECEIVED IN TH E TRUST WERE NOT GENUINE. (VI) THE LD. CIT(A) HAS IGNORED THE FACT THAT AS PER THE OBJECTS NARRATED IN THE TRUST DEED, THE ASSESSEE TRUST WAS NOT CREATED OR ESTABLISHED WHOLLY FOR RELIGIOUS PURPOSES. HENCE, THE PROVISIONS OF SECTION 115BBC ARE CLEARLY APPLICA BLE IN THIS CASE AND THE SAID ANONYMOUS DONATIONS REQUIRED TO BE TAXED @30% ON THE AGGREGATE OF ANONYMOUS DONATIONS RECEIVED BY THE ASSESSEE TRUST. (VII) THE LD. CIT(A) HAS IGNORED THE FACT THAT THE APPLICANT DURING THE ASSESSMENT PROCEEDINGS HAS FAILED TO PRO DUCE ANY DETAILS, EVIDENCES REGARDING SOURCES OF DONATIONS RECEIVED. DURING THE APPELLATE PROCEEDINGS THE ASSESSEE HAS PRODUCED THE SAID DOCUMENTS SUCH AS RECEIPT BOOKS OF DONATIONS IN RESPECT OF SOME DONATIONS WHEREIN THE MODE OF RECEIPT OF ALL THE DONATI ON WAS CASH AND NO ANY NAMES OF THE DONORS WERE MENTIONED IN ANY OF THE RECEIPTS. THUS, THE GENUINENESS OF THE DONATION RECEIVED WAS NOT ESTABLISHED AND HENCE THE SAME WERE REQUIRED TO BE TREATED AS ANONYMOUS DONATION U/S 115BBC. 25 (VIII) ANONYMOUS DONATION: - AS R EGARDS THE APPELLANT'S CONTENTION MADE DURING THE REMAND PROCEEDINGS THAT THE SAID DONATIONS WERE RECEIVED FOR THE PURPOSE OF CONSTRUCTION OF TEMPLE AND WERE THEREFORE TOWARDS THE CORPUS DONATIONS, AND HENCE THE SAME WERE CREDITED IN TEMPLE FUND. TEMPLE F UND, IT IS SUBMITTED THAT NEITHER DURING THE ASSESSMENT PROCEEDINGS NOR DURING TIRE REMAND PROCEEDINGS, THE APPELLANT HAS FAILED TO PRODUCE NOT EVEN A SINGLE DONATION RECEIPT (LEAVE RECEIPT BOOK) TO SUBSTANTIATE ITS CLAIM. IT MAY KINDLY BE SEEN FR OM THE CO PY OF TEMPLE FUND A/C S UBMITTED BY THE APPELLANT THAT ALL THE DONATIONS IN ALL THE A.Y.S I.E. 2007 - 08, 2008 - 09, 2009 - 10 AND 2010 - 11 WERE CLAIMED TO BE RECEIVED IN CASH ONLY. THUS, NOT EVEN A SINGLE ENTRY ON DONATION RECEIPT IN ANY OF THE A.Y.S IS SUBSTANT IATED WITH AN/ BASIS, DONATION RECEIPT OR SUPPORTING EVIDENCE, TO SHOW ANY NAME, ADDRESS, PAN OR AN Y IDENTITY OF ANY OF THE DONORS. IN THE CIRCUMSTANCES THE SAID DONATION CANNOT BE TREATED AS A GENUINE DONATION BY ANY CRITERIA, AND AS SUCH WAS RIGHTLY TREA TED IN THE ASSESSMENT ORDERS AS UNEXPLAINED OR ANONYMOUS DONATION RECEIPT INCOME. (IX) THE ASSESSEE'S CONTENTION MADE DURING THE REMAND PROCEEDINGS THAT IN THE CASE OF RELIGIOUS TRUST, THE LAW ALSO DOES NOT PUT A STRICT OBLIGATION UPON THE TRUST TO ESTABLISH T HE IDENTITY OF THE DONOR. AS REGARDS, THE PROVISIONS OF SECTION 115BBC WHICH PROVIDES SPECIFIC TAX R ATE IN CONN E CTION WITH ANONYMOUS - DONATION, THE APPELLANT HAS CONTENDED THAT THESE PROVISIONS RELATING TO MAXIMUM MARGINAL RATE DOES 26 NOT APPLY IN THE CASE OF RELIGIOUS TRUST AND HENCE THESE RECEIPTS CANNOT BE REGARDED AS THE APPELLANT'S INCOME CANNOT BE FOUND ACCEPTABLE IN VIEW OF THE FACT THAT AS PER THE OBJECTS AS PER TRUST DEED OF THE APPELLANT TRUST, IT IS NOT A PURELY RELIGIOUS TRUST AS THERE ARE SEVERAL OTHER MAIN CHARITABLE OBJECTS IN THE TRUST DEED DATED 15/04/2006. DUE TO THIS FACT, THE PROVISIONS OF SECTION 115BBC OF THE I.T. ACT, 1961 ARE CLEARLY APPLICABLE IN RESPECT OF ALL THE DONATIONS BEING ANONYMOUS IN NATURE. FURTHER, SINCE THE IDENTITY OF ANY DONORS IS NOT PROVED, IT IS NOT ESTABLISHED THAT THE DONATIONS CLAIMED WERE MADE FROM ACCOUNTED SOURCES OF - INCOME BY ANY PERSON AND THAT TAXES WERE PAID THEREON AT ANY STAGE AND HENCE THE SAME REQUIRED TO BE TREATED AS UNACCOUNTED AND UNEXPLAINED UNDER THE PRINCIPLES OF TAXATION. THEREFORE, ALL THE DONATIONS CLAIMED AS RECEIVED BY THE APPELLANT IN CASH WITHOUT ISSUE OF ANY DONATION RECEIPTS DESERVES TO BE TREATED AS ANONYMOUS DONATIONS I.E. THE APPELLANT'S INCOME ONLY AND HENCE THE ADDITION MADE BY THE A.O. IN THE ASSESSMENT ORDERS FOR A.Y.S 2007 - 08 TO 2010 - 11 DESERVES TO BE UPHELD, AND THE APPELLANT'S CONTENTION DESERVES TO BE REJECTED, EVEN ON MERITS. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE SAID ADDIT ION AND HENCE THE HON'BLE ITAT MAY KINDLY BE REQUESTED TO SET - ASIDE THE ORDER OF THE LD. CIT(A) AND UPHOLD THE ADDITION MADE BY THE AO ON THIS GROUND AS DISCUSSED IN THE ASSESSMENT ORDER. (3 ) STATUS OF THE APPELLANT/ CLAIM REGARDING EXEMPTION U/S 10/11: I N THE ASSESSMENT ORDER, THE STATUS OF THE APPELLANT WAS TAKEN AS AOP AND 27 TAXED AT THE MAXIMUM MARGINAL RATE. IN THE COMMENTS OFFERED IN THE REMAND REPORT AND REPRODUCED IN PARA 6.3 (PAGE 18) OF THE APPELLATE ORDER, ALSO THE STAND TAKEN IN THE ASSESSMENT OR DER WAS REQUESTED TO BE SUSTAINED. THE LD. CIT(A) HAS OBSERVED THAT THE APPELLANT HAS BEEN REGISTERED AS A TRUST U/S 12A OF THE I.T. ACT, 1961 AND ACCORDINGLY HAS DIRECTED TO TAX THE APPELLANT'S INCOME IN THE CAPACITY OF A TRUST REGISTERED U/S 12A OF THE I.T. ACT EXCEPT OF THE AMOUNT OF UNEXPLAINED INVESTMENT (AS DETERMINED OF RS. 3,95,178 / - ) FOR CONSTRUCTION OF TEMPLE WHICH WAS NOT SUBSTANTIATED WITH THE AMOUNT OF DONATIONS RECEIVED, WHICH SHALL BE TAXED IN THE STATUS OF AN AOP. FROM THE FACTS DISCUSSE D BY THE AO IN THE ASSESSMENT ORDER AND THE FINDINGS OF THE LD. CIT(A), IT APPEARS THAT DECISION THE LD. CIT(A) IS NOT ACCEPTABLE/JUSTIFIED FOR THE FOLLOWING REASONS: - IN THIS CONNECTION IT IS SUBMITTED THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME AS A TRUST. IT HAS FAILED TO FURNISH ANY DETAILS/EVIDENCES TO ESTABLISH THAT IS WAS REGISTERED WITH THE REGISTRAR OR WITH THE I.T. DEPARTMENT U/ S 12A OF THE I.T. ACT, 1961. DURING THE SEARCH ALSO IT WAS NOTICED THAT NO ACTIVITIES OF THE TRUST ARE BEING CARR IED OUT AS PER ITS TRUST DEED. THIS FACT IS ALSO ESTABLISHED FROM THE SEIZED MATERIALS FOUND DURING THE SEARCH. THEREFORE, THE STATUS OF THE ASSESSEE WAS TAKEN AS AOP AND TAXED AT THE MAXIMUM MARGINAL RATE. 28 THE APPELLANT TRUST HAS FURNISHED A COPY ORDER NO. DATED 11/10/2006 OF THE CIT - II, JODHPUR, BEING ON ORDER GRANTING REGISTRATION U/S 12A(A) OF THE I.T. ACT, 1961 W.E.F. 19/04/2006, AT PAGE 29 OF THE PAPER BOOK. HOWEVER, THE APPELLANT HAS FAILED TO FURNISH ANY COPY OF THE REGISTRATION MADE WITH OTHER REGULATORY AUTHORITIES SUCH AS (I) CHARITY COMMISSIONER OR (II) REGISTRAR OF SOCIETIES DURING THE ASSESSMENT PROCEEDINGS OR EVEN DURING THE REMAND PROCEEDINGS. FURTHER, THAT THE APPELLANT TRUST HAS FAILED TO EXPLAIN THE SOURCES OF DONATIO N SHOWN IN TEMPL E FUND AT ANY STAGE, THE AMOUNTS SHOWN AS RECEIPTS COULD NOT BE ACCEPTED AS GENUINE DONATIONS IN ANY CIRCUMSTANCES. FURTHER, THAT NO EXPENDITURE WAS INCURRED IN RESPECT OF ANY CHARITABLE ACTIVITIES INCLUDED IN ITS OBJECTS IN ANY OF THE A.Y.'S UNDER CONSIDE RATION, THE APPELLANT WAS NOT ENTITLED FOR ANY KIND OF EXEMPTION U/S 10/11 OF THE I.T. ACT, 1961 AND ACCORDINGLY IT WAS TREATED AS SUCH AOP IN THE ASSESSMENT ORDERS PASSED FOR A.Y.S 2007 - 08 TO 2010 - 11. THEREFORE, THE STAND TAKEN IN THE ASSESSMENT ORDER DES ERVES TO BE SUSTAINED, CONSIDERING OVERALL FACTS OF THIS CASE. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE SAID ADDITION AND HENCE THE HON'BLE ITAT MAY KINDLY BE REQUESTED TO SET - ASIDE THE ORDER OF THE LD. CIT(A) AND UPHOLD THE ADDITION MADE BY THE AO ON THIS GROUND AS DISCUSSED IN THE ASSESSMENT ORDER. SUBMITTED FOR KIND INFORMATION AND PERUSAL. 29 3. HAVING RATIOCINATING THE ABOVE RIVAL STANDS WE ARE OF THE CONSIDERED OPINION THAT DELETION OF RS. 22,28, 000/ - IS QUITE IN ORDER WHICH IS BASED ON DULY TAKEN EVIDENCE AS PER THE RULE 46A AFTER OBTAINING R.R. OF THE A.O. AND WE HAVE NOT FOUND ANY INFIRMITY THEREIN. THE TRUST, NOW, STANDS REGISTERED AND THE APPLICATION OF THE INCOME OF THE TRUST CANNOT BE TAKEN AS ITS INCOME FOR TAX PURPOSES. THE A.O. HIMSELF, IN HIS R.R. CONCEDED (AT PAGE 23 OF THE REPORT) THAT HE COMMITTED MISTAKE IN NOT GRANTING THE DEDUCTION OF THE INVESTMENT ALREADY SHOWN BY THE ASSESSEE AT RS. 56,04,625/ - OUT OF THE TOTAL ADDITION OF RS. 6 7,66,000/ - IN ALL THESE THREE YEARS. THUS, ACCORDING TO A.O. THE DIFFERENTIAL AMOUNT OF RS. 11,61,374/ - , IS IN DISPUTE (FOR ALL THE THREE YEARS), BASED ON THE VALUATION REPORT. THE VALUATION BY THE DVO HAS BEEN DONE BY FOLLOWING CPWD RATES. THE LAW IS SETT LED IN THIS REGARD THAT 20% REDUCTION FROM VALUATION MADE BY ADOPTING CVPWD RATES WOULD GIVE A VALUATION AS PER THE LOCAL PWD RATES. FOR READY REFERENCE THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS HOTEL JOSHI (2000) 242 ITR 478( RAJ)., INTER - ALIA, IS BEING REFERRED. THUS, AFTER FOLLOWING THE ABOVE SETTLED VERDICT NO ADDITION WOULD SURVIVE IN ANY OF THESE THREE YEARS. ACCORDINGLY, WE CANNOT ALLOW THE APPEAL OF REVENUE FOR ANY REASONS MENTIONED IN THEIR APPEALS. IF THE BENEFIT OF L OCAL PWD RATES AND ON ACCOUNT OF SELF - SUPERVISION IN VIEW OF 30 THE JUDGMENTS OF CIT VS ELEGANT HOUSE (2002) 259 ITR 232 (RAJ.) NO ADDITION IS JUSTIFIED. MOREOVER, THE VOLUNTARY CONTRIBUTIONS EXPRESSLY RECEIVED FOR THE CONSTRUCTION OF A BUILDING ARE CORPUS DO NATIONS. BE THAT AS IT MAY IT IS AN ADMITTED CASE THAT THE ASSESSEE - TRUST HAS UTILIZED THE ENTIRE FOUND IN THE CONSTRUCTION OF THE TEMPLE AND FOR WHICH DEDUCTION IS AVAILABLE TO IT. THEREFORE, IN OUR CONSIDERED OPINION THE SUSTAINED ADDITIONS ALSO DESERVE TO BE DELETED. 4. ACCORDINGLY, WE ORDER TO DELETE THE SUSTAINED ADDITIONS IN ALL THESE YEARS, AND UPHOLD THE DELETION MADE BY THE LD. CIT(A). OUR ABOVE EPILOGUE RESULTS IN THE ALLOWANCE OF ALL THE THREE APPEALS OF THE ASSESSEE - TRUST AND DISMISSED OF THE REVENUES APPEAL 5 . TO SUM UP, IN THE RESULT, ALL THE THREE APPEALS OF THE ASSESSEE STAND ALLOWED AND THOSE OF THE REVENUE STAND DISMISSED. (ORDER PRONOUN CED IN THE OPEN COURT ON 25 TH SEPTEMBER, 2014) SD/ - SD/ - (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25 TH SEPTEMBER, 2014 31 VL/ COPY FORWARDED TO : - 1. M/S BARNELA CHARITABLE TRUST 2. D .C.I.T. CIRCLE - 2,JODHPUR 3. CIT, JODHPUR . 4. CIT (A), JODHPUR . 5. CIT,DR, ITAT, JODHPUR. BY ORDER, AR, ITAT, JODHPUR.