ACIT, Circle (Exemption), Jodhpur V. Shri Sachiyaya Mataji Trust, Jodhpur

ITA 257/JODH/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1358 (ITAT-JODHPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 24-05-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JODHPUR DIVISION BENCH , JODHPUR BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANDEEP GOSAIN , JM ITA NO. 257 /JODH/2018 ASSESSMENT YEAR : 2014-15 THE ASSTT. CIT CIRCLE (EXEMPTION), JODHPUR VS. M/S SACHIYAYA MATAJI TRUST, OSIYAN, JODHPUR PAN NO: AACTS7448E APPELLANT RESPONDENT ASSESSEE BY : SHRI SURESH GANG, CA SHRI ADITYA GANG, CA REVENUE BY : SHRI K.C. BADHOK, CIT DR / DATE OF HEARING : 12/09/2019 / DATE OF PRONOUNCEMENT : 12/09/2019 / ORDER PER N.K. SAINI, VICE PRESIDENT: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED. 19/02/2018 OF THE LD. CIT(A)-2, JODHPUR. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L : 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) HAS ERRED IN TREATING RECEIPTS OF EARMARKED FUNDS AS CO RPUS DONATION AND ALLOWED EXEMPTION U/S 11(1)(D) EVEN THERE WERE NO SPECIFIC DIRECTIONS FROM DONORS FOR SUCH RECEIPTS OF CORPUS DONATION. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) HAS ERRED IN DELETING ADDITION WITHOUT CONSIDERING THE FACTS THAT EARMARKED FUND WAS NOT SUPPORTED WITH SPECIFIC DIRECTIONS OF DONORS AS REQUIRED U/S 11(1)(D) OF THE I.T. ACT. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) HAS ERRED IN GIVING RELIEF ON THE ISSUE OF UNDER REPORT ING OF EARMARKED FUND OF RS. 3,36,72,607/- IN PLACE OF RS. 4,49,67,629/-. 4) ANY OTHER QUESTION OF LAW AS DEEMED FIT IN THE F ACTS AND CIRCUMSTANCES OF THE CASE MAY ALSO BE FRAMED BEFORE THE HON'BLE TRIBUNAL IN THE INTEREST OF JUSTICE. 3. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE ISSUES UNDER CONSIDERAT ION ARE SQUARELY COVERED VIDE ORDER DT. 09/05/2014 IN ITA NO. 538/JODH/2013 FOR THE A.Y. 2009-10 IN 2 ASSESSEE'S OWN CASE, COPY OF THE SAID ORDER WAS FUR NISHED WHICH IS PLACED ON RECORD. 4. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR ALTHOUGH SU PPORTED THE ORDER OF THE ASSESSING OFFICER BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT IDENTICAL ISSUES HAVING SIMILAR FACTS WERE THE SUBJECT MATTER OF THE DEPART MENTAL APPEAL IN ITA NO. 538/JODH/2013 FOR THE A.Y. 2009-10 IN ASSESSEE'S OW N CASE WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 11 TO 17 WHICH READ AS UNDER: 11. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THA T THE HON'BLE. HON'BLE(A) DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOL LOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SU KHDEO CHARITY ESTATE VS. INCOME TAX OFFICER REPORTED IN 192 HON'BLE 615. THI S ISSUE ALSO STANDS COVERED IN FAVOUR OF THE ASSESSEE VIDE JUDGMENT OF THE HON' BLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPTIONS) & A NOTHER VS. SRI RAMAKRISHNA SEVA ASHRAMA (SUPRA) WHEREIN IT HAS BEEN HELD AS UN DER:- THE WORD CORPUS USED IN THE CONTEXT OF THE INCOM E-TAX, ACT, 1961, IS TO BE UNDERSTOOD, IN THE CONTEXT OF CAPITAL, AS OPPOSED T O AN EXPENDITURE. IF A VOLUNTARY CONTRIBUTION IS MADE WITH A SPECIFIC DIRE CTION, IT SHALL BE TREATED AS THE CAPITAL OF THE TRUST FOR CARRYING ON ITS CHARIT ABLE OR RELIGIOUS ACTIVITIES. THEN SUCH AN INCOME FALLS UNDER SECTION 11(1)(D) AND IS NOT LIABLE TO TAX. THEREFORE, IT IS NOT NECESSARY THAT A VOLUNTARY CONTRIBUTION SHOU LD BE MADE WITH A SPECIFIC DIRECTION TO TREAT IT AS CORPUS. IF THE INTENTION O F THE DONOR IS TO GIVE THAT MONEY TO A TRUST TO KEEP IN TRUST THE ACCOUNT IN DEPOSIT AND UTILISE THE INCOME THEREFROM FOR CARRYING ON A PARTICULAR ACTIVITY, IT SATISFIES THE DEFINITION PART OF THE CORPUS. THE ASSESSEE WOULD BE ENTITLED TO THE B ENEFIT OF EXEMPTIONS FROM PAYMENT OF TAX. IN VIEW OF THE LANGUAGE EMPLOYED IN CLAUSE (D) OF SUB-SECTION (1) OF SECTION 11, THE REQUIREMENT IS THAT THE VOLU NTARY CONTRIBUTIONS HAVE TO BE MADE WITH A SPECIFIC DIRECTION. THE LAW DOES NOT RE QUIRE THAT THE DIRECTION SHOULD BE IN WRITING. WE, THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, DO NOT SEE ANY MERIT IN THE GROUND NOS. 3 & 4 OF THE DEPARTMENTAL APPEAL. 12. THE LAST ISSUE VIDE GROUND NO. 5 OF THE DEPARTM ENTAL APPEAL RELATES TO THE ACTION OF THE LD. CIT(A) IN HOLDING THAT THE DONATI ONS RECEIVED IN KIND WERE NOT INCOME FOR THE PURPOSE OF SECTION 12(1) OF THE ACT. 13. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE TH AT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICED THAT THE ASSESSEE HAD RECEIVED VOLUNTARY CONTRIBUTION IN THE FORM OF GOLD AND SILVER JEWELLERY BUT DID 3 NOT TREAT THE SAME AS ITS INCOME. HE, THEREFORE, TR EATED THE SAME AS DEEMED INCOME AS PER PROVISIONS OF SECTION 12(1) OF THE AC T. 14. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A). AND SUBMITTED THAT THE DONATION RECEIVED IN KIND DID NO T COME UNDER THE DEFINITION OF INCOME U/S 2(24) OF THE ACT, THEREFOR E, IT COULD NOT BE THE INCOME OF THE TRUST U/S 12(1) OF THE ACT AND THAT THE ACCE PTANCE OF DONATION IN KIND DOES NOT COME IN PURVIEW OF INCOME U/S 2(24)(IIA) F OR THE PURPOSE OF SECTION 11 OF THE ACT. IT WAS FURTHER STATED THAT THE VOLUNTAR Y CONTRIBUTION RECEIVED IN KIND BY THE ASSESSEE SHOULD HAVE BEEN TREATED AS CAPITAL RECEIPT AND NOT THE INCOME WITHIN THE MEANING OF SECTION 2(24) OF THE A CT. 15. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, OBSERVED THAT THIS ISSUE WAS COVERED IN FAVOUR OF THE ASSESS EE VIDE ORDER DATED 26/3/2013 PASSED BY HIS PREDECESSOR FOR THE ASSESSM ENT YEAR 2006- 07 WHEREIN IT WAS HELD AS UNDER:- I FIND THAT THE VOLUNTARILY CONTRIBUTION IN KIND R ECEIVED BY THE APPELLANT TRUST DURING THE FINANCIAL YEAR ARE NOT INCOME FOR THE PU RPOSE OF SECTION. 12(1). THERE IS NO PROVISION IN LAW AND THE ACT DOES NOT P ROVIDE VOLUNTARILY CONTRIBUTION IN KIND COME UNDER THE PURVIEW OF THE INCOME. VOLUNTARILY CONTRIBUTION IN KIND CANNOT BE APPLIED, ACCUMULATED OR INVESTED; THEREFORE, IT CANNOT BE TREATED AS INCOME. FURTHER THE ASSESSING OFFICER HAS RELIED THE PROVISION OF CLAUSE (B)(IV) OF THIRD PROVISO TO SEC TION. 10(23C) AND DISALLOWED THE DONATION RECEIVED IN KIND. HOWEVER, FROM SAID P ROVISO, IT IS CLEARLY PROVIDED IN THE PROVISION THAT THE VOLUNTARY CONTRIBUTION RE CEIVED AND MAINTAINED IN THE FORM OF JEWELLERY, FURNITURE OR ANY OTHER ARTICLES NEED NOT BE INVESTED IN ANYONE MORE OF THE FORMS OR MODE SPECIFIED IN SUB-.SEC. (5 ) OF SECTION. 11. ALTHOUGH THE ASSESSING OFFICER HAS RELIED THE ABOVE PROVISIO N BUT IN VIEW OF THE PROVISION ALSO THE APPELLANT IS ALSO NOT REQUIRED TO BE INVES TED AS PER SECTION 11(5). SO IT IS CLEAR THAT VOLUNTARY CONTRIBUTION RECEIVED IN KI ND AS GOLD AND JEWELLERY DO NOT FORM THE PART OF THE INCOME OF THE TRUST. THE G ROUND IS DECIDED IN FAVOUR OF THE APPELLANT. THE LD. CIT(A), ACCORDINGLY HELD THAT THE VOLUNTARY CONTRIBUTION RECEIVED IN KIND I.E. GOLD AND JEWELLERY DID NOT FORM THE PART OF THE INCOME OF THE ASSESSEE. NOW THE DEPARTMENT IS IN APPEAL. 16. THE LD. D.R. SUPPORTED THE ORDER OF THE ASSESSI NG OFFICER AND THE LEARNED COUNSEL FOR THE ASSESSEE IN HIS RIVAL SUBMISSIONS, REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND FURTHER SUBMITTED TH AT THE VOLUNTARY CONTRIBUTION RECEIVED BY THE ASSESSEE WAS NOT A REV OKABLE TRANSFER HENCE, IT WAS IN THE NATURE OF CAPITAL RECEIPT, THEREFORE, TH E LD. CIT(A) WAS FULLY JUSTIFIED IN REVERSING THE OBSERVATION OF THE ASSESSING OFFIC ER. 17. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN TH E PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE RECEIVED THE DONATI ONS IN KIND AND THE SAME COULD NOT BE APPLIED, ACCUMULATED OR INVESTED, THER EFORE, IT CANNOT BE TREATED AS INCOME. THEREFORE, THE LD. CIT(A) WAS FU LLY JUSTIFIED IN REVERSING THE OBSERVATIONS OF THE ASSESSING OFFICER. WE DO NOT SE E ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 6. SINCE THE FACTS FOR THE YEAR UNDER CONSIDERATION AR E SIMILAR TO THE FACTS INVOLVED FOR THE A.Y. 2009-10 IN ITA NO. 538/JODH/2 013 IN ASSESSEE'S OWN CASE 4 SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DT. 09/05/2014, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 7. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 12/09/2019 ) SD/- SD/- (SANDEEP GOSAIN ) ( N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT AG DATE: 12/09/2019 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. THE CIT(A) 5. DR, ITAT, JODHPUR 6. GUARD FILE