ACIT, Karnal V. M/s Galaxy Global Educational Trsut, Kurukshetra

ITA 2652/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6783 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A.K. SAROHA
• Keywords: Unexplained investment; Unexplained expenditure; Document seized; Charitable institution; Source of fund; Deemed to accrue or arise in india; Retraction; Documents seized; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 69C; 11; 15; 271(1)(b); 139; 92; 153A; 12A; 201; 274; 191; 113; 48; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, NEW DELHI BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI. C.M. GARG, JUDICIAL MEMBER ITA N O. 2652 / DEL /201 3 A SSESSMENT YEAR: 20 09 - 10 ACIT CENTRAL CIRCLE KARNAL VS. GALAXY GLOBAL EDUCATIONAL TRUST VIL LAGE DINARPUR KURUKSHETRA PAN - AABTG1656M (APPELLANT) (RESPONDENT) ITA N O. 265 3 /DEL /201 3 A SSESSMENT YEAR: 20 10 - 11 ACIT CENTRAL CIRCLE KARNAL VS. GALAXY GLOBAL EDUCATIONAL TRUST VILLAGE DINARPUR KURUKSHETRA PAN - AABTG1656M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. A.K. SAROHA, CIT (DR) RESPONDENT BY : SH . AMOL SINHA , ADVOCATE , SH. ASHOK JAIN & ASHU GOEL, CA DATE OF HEARING : 28 - 12 - 201 6 DATE OF PRONOUNCEMENT : 0 - 02 - 201 7 O R D E R PER C.M. GARG , J .M . : REVENUE HAS FILED THESE APPEAL S AGAINST CONSOLIDATED ORDERS OF THE CIT (A) DATED 25.2.2013 FOR AY 2009 - 10 AND 2010 - 11 . SOLE GROUND OF REVENUE FOR AY 2009 - 2010 READS AS FOLLOWS: 2 ITA NO. 744/DEL/2014 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS. 2,87,91,723 / - , U/S 69C OF THE I.T. ACT, 1961 WHEN THE ASSESSEE HAD ACTUALLY ADMITTED UNDISCLOSED INCOME AT THE TIME OF SEARCH AND HAS ALSO MADE SURRENDER TO THAT EXTENT ON THE BASED ON THE SEIZED DOCUMENTS.' SOLE GROUND OF REVENUE FOR AY 2010 - 11 READS AS FOLLOWS . WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT I N DELETING THE ADDITION OF RS. 3,21,88,455 / - , U/S 69C OF THE I.T. ACT, 1961 WHEN THE A SSESSEE HAD ACTUALLY ADMITTED UNDISCLOSED INCOME AT THE TIME OF SEARCH AND HAS ALSO MADE SURRENDER TO THAT EXTENT ON THE BASED ON THE SEIZED DOCUMENTS.' 2. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE MATERIALS PLACED ON THE RECO RD OF THE TRIBUNAL, INTER ALIA, IMPUGNED ASSESSMENT FIRST APPELLATE ORDERS, PAPER BOOKS OF THE ASSESSEE AND REVENUE AND ALSO CONSIDERED RATIO OF THE DECISIONS RELIED BY BOTH THE PARTIES AND CITED AT BAR. 3. THE LD. CIT (DR) SUBMITTED THAT THE CIT (A) HAS ERRED IN DELETING THE ADDITION MADE U/S 69 C OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) WHEN THE ASSESSEE HAD ACTUALLY ADMITTED UNDISCLOSED INCOME AT THE TIME OF SEARCH AND HAS ALSO MADE SURRENDER TO THAT EXTENT ON THE BASIS OF SEIZED DOCUMENTS. THE L D. DR FURTHER CONTENDED THAT AS PER PAGE A - 12 & 15 OF REVENUE S P APER B OOK RPB) N O BUILDING HAS SHOWN IN THE BALANCE SHEET ON 22.6.2009 AND AS PER A - 1 AND 2 (RPB) BUILDING HAS BEEN SHOWN TO THE TUNE OF RS. 2,87,91,723/ - ON 9.12.2011 . THE LD. DR VEHEMENTLY POINTED OUT THAT 3 ITA NO. 744/DEL/2014 BEFORE DATE OF SEARCH BALANCE SHEET WAS SHOWING NO BUILDING ON 22.6.2009 AND AFTER SEARCH (ON 7.7.2009) AND IN THE BALANCE SHEET ON WAS SHOWING BUILDING AS ON 31.3.2009 WHICH CLEARLY ESTABLISHES UNEXPLAINED INVESTMENTS U/S 69C OF THE ACT. HE FURTHER SUBMITTED THAT IN THE FIRST BALANCE SHEET DATED 22.6.2009 THERE WAS NO CORPUS FUND AND DURING SEARCH NO CORPUS DONATION WAS STATED TO HAVE BEEN RECEIVED A ND THAT IT WAS AFTER THOUGHT EXPLANATION OF THE ASSESSEE. THE LD. DR ALSO CONTENDED THAT T HERE WAS NO WHISPER ABOUT CASH DONATIONS IN THE STATEMENT OF SHRI KUNAL GARG AND DESPITE DIRECT QUESTION NO MENTION OF CORPUS FUNDS RECEIPT THUS IT IS CLEAR CASE OF UNEXPLAINED INVESTMENTS. HE FURTHER POINTED OUT THAT FROM THE COPIES OF THE SEIZED DOCUMENT S PLACED AT PART - C OF PROPER BOOK - 1 (RPB) PAGE 68 AND ASSESSEE S PAPER BOOK PAGE 171 THE DATES AND FIGURES ARE NOTHING WHICH AGAIN SUPPORT THE ALLEGATION OF THE UNEXPLAINED INVESTMENT. THE LD. DR ALSO POINTED OUT THAT THE PAGE C - 80 (RPB - I ) AND PAGE 170 (A P B) ARE NOTHING AND AMOUNTS HAVE BEEN USED FOR UNEXPLAINED INVESTMENTS. THE LD. DR ALSO SUBMITTED THAT THE CORPUS DONORS CREDITWORTHINESS HAS NOT BEEN ESTABLISHED THUS IT HAS TO BE CODED U/S 68 OR 69C OF THE ACT. THE LD. DR VEHEMENTLY SUBMITTED THAT THE LE TTERS PLACED AT PAGE 94,95 & 96 OF REVENUE PAPER BOOK 1 ARE NOT CREDIBLE AND WITHOUT ANY RESOLUTION BY THE DONOR COMPANY THUS THESE AMOUNT CANNOT BE RELIED IN FAVOUR OF THE ASSESSEE. 4 ITA NO. 744/DEL/2014 4. THE LD. DR ALSO POINTED OUT THAT AS PER SEIZED DOCUMENT PAGE C - 193 (R PB - 1) RS. 2 LAC HAS BEEN GIVEN TO SHRI KRISHAN GOEL THE DIRECTOR AND THUS BENEFIT HAS BEEN GIVEN TO THE OFFICE BEARERS OF THE TRUST WHICH ATTRACTS PROVISION OF SECTION 13 OF THE ACT. HE FURTHER POINTED OUT THAT AS PER PAGE A - 11 (RPB - 1) NO ACTIVITIES WERE U NDERTAKEN BY THE TRUST DURING THE YEAR THUS SUBSEQUENTLY CREATION OF BUILDING THE BALANCE SHEET DRAWN SUBSEQUENT TO SEARCH CLEARLY ESTABLISHED THE FACT OF UNEXPLAINED INVESTMENT WHICH ATTRACTS PROVISIONS OF SECTION 69C OF THE ACT. PLACING RELIANCE ON THE D ECISIONS OF HON BLE BOMBAY HIGH COURT IN THE CASE OF B.R. BANISI VS. CIT 83 ITR 223 (BOMBAY) , HON BLE HIGH COURT OF DELHI IN THE CASE OF MOOLCHAND KHAIRATIRAM TUST VS. DIT (E) REPORTED AS (2015) 59 TAXMAN.COM 398 (DEL.) AND ORDER OF ITAT MUMBAI BENCH B I N THE CASE OF THE TRUSTEES, B.N. GAMADIA PARSI VS. ADIT (E) REPORTED AS (2002) 77 TTJ 274 THE LD. DR SUBMITTED THAT THE REVENUE CAN TAKE ALTERNATE PLEA FOR SUPPORTING ACTION OF THE AO. HE ALSO CONTENDED THAT THE ASSESSEE WOULD NOT BE ENTITLED TO EXEMPTION U/S 11 OF THE ACT IF ITS ACTIVITIES ARE OUTSIDE SCOPE OF ITS OBJECTS. HE ALSO CONTENDED THAT BENEFIT OF SECTION 11 IS AVAILABLE ON THE INCOME AND NOT FOR DEEMED INCOME. HE LASTLY SUBMITTED THAT THE BASELESS ORDER OF CIT(A) MAY BE SET ASIDE BY RESTORING THA T OF THE AO. 5. RE PLYING TO THE ABOVE CONTENTIONS, THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT ASSESSEE IS A TRUST CREATED FOR CHARITABLE OBJECTS AND THUS IT 5 ITA NO. 744/DEL/2014 HAS BEEN GRANTED REGISTRATION U/S 12 A OF THE ACT. ASSESSEES PREMISE IS SITUATED AT VILLAGE DI NARPUR AND THE GOEL GROUP IS IN VILLAGE TAROLI. HE FURTHER POINTED OUT THAT THE SHOWING THE SOURCE OF LAND AND FUNDS USED FOR BUILDING THE ASSESSEE SUBMITTED DETAILED THREE LETTERS ALL DATED 7.9.2011 (RPB - PAGE 191 TO 193) BEFORE THE AO WHICH MANIFEST THAT GOEL INTERNATIONAL PVT. LTD., AND GOEL OVERSEAS GAVE RS. 2.5 CRORE EACH TOTAL RS. 5.00 CRORE FOR LAND AND GOEL INTERNATIONAL GAVE CASH DONATIONS OF RS. 2,87,91,723/ - DURING AY 2008 - 09 AND RS. 3,21,88,455/ - DURING AY 2009 - 10 TO PERTAINING TO AY 2009 - 10 AND 2010 - 11 TO CORPUS FUND FOR CONSTRUCTION OF BUILDING THUS NO ADDITION CAN BE MADE U/S 69 C OF THE ACT. THE LD. COUNSEL VEHEMENTLY POINTED OUT THAT THE DOCUMENTS A - 1 TO A - 5 AS RELIED BY THE LD. DR FOR SUPPORTING THE STAND OF THE AO, WERE RECOVERED FROM GOEL BROTHERS IN TAROLI AND THESE WERE NOT RECOVERED FROM THE ASSESSEES TRUST PREMISES. THE LD. COUNSEL VEHEMENTLY POINTED OUT THAT AS PER ASSESSMENT ORDER FOR AY 20 0 9 - 10 (ASSESSEES PAPER BOOK PAGE 235 - 257) THERE WAS NO ADDITION IN THE CASE OF GOEL INTERNATIO NAL PVT. LTD., NO ADDITION HAS BEEN MADE BY THE SAME AO ON THIS ISSUE THUS IN THE CASE OF ASSESSEE TRUST THEREFORE , NO ADDITION U/S 69 C OF THE OF THE ACT CAN BE SUSTAINED. 6. HE FURTHER POINTED OUT THAT THE BUILDING HAS BEEN CONSTRUCTED ON THE LAND RECEI VED FROM SAID TWO COMPANIES OF GOEL BROTHERS AND ALL ACTIVITIES, INCLUDING CONSTRUCTION OF BUILDING, HAS BEEN CARRIED OUT AS PER OBJECTS OF THE 6 ITA NO. 744/DEL/2014 TRUST. HE ALSO DREW OUR ATTENTION TO THE LETTER DATED 9.7.2011 (RPB - PAGE 105 - 129) OF SHRI VINOD GOEL TO AO CLAI MING THAT CORPUS DONATIONS WAS GIVEN BY M/S GOEL INTERNATIONAL PVT. LTD., TO THE ASSESSEE TRUST AND SPECIALLY TOOK US ON PAGE 111 MIDDLE PARA AND SUBMITTED THAT HE SOURCE OF INVESTMENT ON BUILDING IS CLEARLY EXPLAINED THUS THE CIT (A) WAS CORRECT IN DISMI SSING THE ADDITION. HE ALSO DREW OUR ATTENTION TO PARAS 8.3 TO 8.5 OF THE FIRST APPELLATE ORDER AND CONTENDED THAT THE CIT(A) GRANTED RELIEF TO THE ASSESSEE ON JUSTIFIED AND CORRECT REASONS THUS THE SAME WAS KINDLY BE UPHELD. HE ALSO PLACED RELIANCE ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF DIT (E) VS. KESHAV SOCIAL AND CHARITABLE FOUNDATION 278 ITR 152 (DELHI) AND DIT (E) VS. RONAK EDUCATION FOUNDATION 294 ITR 76 (DELHI) . 7 . PLACING REJOINDER TO THE ABOVE SUBMISSIONS THE LD. DR CONTENDED THAT FIRST TIME THE TRUST STATED ABOUT CORPUS DONATIONS ON 9.7.2011 AFTER TWO YEARS OF SEARCH WHICH WAS CONDUCTED ON 7.7.2009 . HE FURTHER STATED THAT THE LD. DR COULD NOT CONTROVERT THIS F ACT THAT THE BUILDING WAS NOT SHOWN IN THE BALANCE SHEET DRAWN ON 22 .6.2009. HE ALSO SUBMITTED THAT THE ASSESSEE MISLEADED THE FACTS BEFORE CIT (A) AND THUS HE MISUNDERSTOOD THE FACTS AND CONSEQUENTLY IGNORED THE CONTRADICTIONS IN THE PREVIOUS B/S OF 22.06.2009 AND SUBSEQUENT BALANCE SHEET PREPARED ON 9.12.2011 AFTER THE S EARCH. HE LASTLY POINTED OUT THAT FOR MAKING ADDITION U/S 69C OF THE ACT NO HEAD OF INCOME IS REQUIRED THUS ADDITION MADE BY THE AO MUST BE SUSTAINED. 7 ITA NO. 744/DEL/2014 8 . ON CAREFUL CONSIDERATION OF ABOVE NOTED RIVAL SUBMISSIONS AT THE OUTSET WE NOTE THAT THE CIT (A) GRAN TED RELIEF TO THE ASSESSEE WITH FOLLOWING OBSERVATIONS AND CONCLUSION: THE TRUST DEED OF THE ASSESSEE DATED 7.4.2008 IS PLACED AT PAGES 20 - 48 OF THE PAPER - BOOK FILED. THE HEAD OFFICE IS AT 1102, SECTOR - 13, URBAN ESTATE, KARNAL. THE AIMS AND OBJEC TIVES FOR WHICH THE TRUST IS ESTABLISHED ARE RELIEF OF THE POOR, EDUCATION, HEALTH, SOCIAL WELFARE, ADVANCEMENT OF TECHNOLOGY, DISASTER PREVENTION AND MANAGEMENT, RURAL UPLIFTMENT AND ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT. THE S E IZE D DOCUMENT A - 12 IS PLACED FROM PAGES 50 TO 120 OF THE PB. PERUSAL OF THE SAME MAKES IT CLEAR THAT THE EXPENDITURE IS TOWARDS CONSTRUCTION ACTIVITY IN AS MUCH AS EXPENDITURE HAS BEEN DEBITED TO DUMPER, DRIVER, CRUSHER, PLANT - OPERATOR, UNLOADING CEMENT, GENERAL REPAIRS ETC. AT SOME PAGES VIZ. PAGE 57, IT IS ALSO WRITTEN AS 'RICE ACCOUNT WHERE RS. 2700/ - HAS BEEN CREDITED ON 9.12.2008. SIMILARLY PAGE 59 SHOWS FOR INSTANCE DEBIT OF RS. 2,50,000/ - T O SHRI VINOD GOEL ON 14.12.2008, AS ALSO IN FEW OTHER PLACES. IT IS SEEN FROM PAGE 48 OF THE PB THAT SHRI VINOD GOEL IS THE PRESIDENT AND ALSO THE PROMOTER OF THE TRUST. IN OTHER WORDS, THE MONEY IS COMING TO THE TRUST FROM ITS PROMOTERS FOR CONSTRUCTION O F THE BUILDING OF THE TRUST. THE ASSESSEE CONTENDS THAT AN AMOUNT OF RS. 7,20,41,208/ - WAS SURRENDERED WHICH I AM THEREFORE INCLINED TO BELIEVE CONSIDERING THE NATURE OF THE ENTRIES DISCUSSED BRIEFLY ABOVE. IT IS ALSO SEEN THAT AT PAGE 197 OF THE PB IS TH E 'NOTES FORMING PART OF THE BALANCE SHEET AS ON 31.3.2009' WHICH MENTIONS ABOUT VOLUNTARY CONTRIBUTIONS RECEIVED. IT WAS STATED THAT CORPUS DONATION REPRESENT ACQUISITION OF ASSETS (LAND, BUILDING AND OTHERS) ON BEHALF OF THE TRUST BY THE TRUSTEES. CORPUS FUNDS IS ALSO SEEN TO HAVE BEEN RECEIVED BY THE PROMOTERS (PAGE 199 OF THE PB) FROM SHRI DEVI CHAND, VINOD GOEL, VIJAY GOEL, KRISNHAN GOEL, RAJ BALA, RAJNI 8 ITA NO. 744/DEL/2014 GOEL, SEEMA GOEL AND CORPUS DONATION RECEIVED IN KIND/CASH WITH SPECIFIC DIRECTION. ASIDE, AS PER S EC (1) (D) VOLUNTARY CONTRIBUTIONS WITH SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS AR E FULLY EXEMPT, BUT ASSUMING THAT SUCH CONTRIBUTIONS ARE NOT WITH SPECIFIC PURPOSE, THE SAME AS PER SECTION 12, WOULD 'TTRX STILL BE DEEMED TO BE INCOME DE RIVED FROM A TRUST/INSTITUTION AND THE PROVISIONS OF SECTION 11 (I.E INCLUDING THE APPLICATION OF INCOME) AND SECTION 13 WOULD STILL BE APPLICABLE IF THE TRUST/INSTITUTION IS CREATED WHOLLY FOR CHARITABLE PURPOSES. IN OTHER WORDS, IN THIS CASE AT HAND MONE Y RECEIVED HAS BEEN APPLIED FOR PURPOSES OF THE TRUST, AS IS EVIDENT FROM THE AUDIT REPORT (REVISED) ENDING ON 31.3.2009. THIS AUDIT REPORT WAS ALSO SUBMITTED BEFORE THE AO DURING THE COURSE OF HEARING AND NO ADVERSE INFERENCE HAS BEEN DRAWN EITHER. AT THI S JUNCTURE, I AM DRAWN TO THE JURISDICTIONAL HIGH COURT DECISION IN*THE CASE OF C1T VS. MARKET COMMITTEE, PIPLI (P&H) (2011) 238 ITR (P&H) 103, WHEREIN AT PARA 6, IT HAS BEEN ELUCIDATED AS UNDER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE MADRAS HIGH CO URT IN RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES' CASE [(1982) 135 ITR 485 (MAD)] OBSERVED. ' . TAKING INTO ACCOUNT THE PURPOSE FOR WHICH THE CONDITIONS OF SECTION LL(L)(A) ARE IMPOSED, IT WOULD BE CLEAR THAT WE HAVE TO CONSIDER THE INCOME AS ARRIVED AT IN THE CONTEXT OF WHAT IS AVAILABLE IN THE HANDS OF THE ASSESSEE, SUBJECT OF COURSE TO ANY ADJUSTMENT FOR EXPENSES EXTRANEOUS TO THE TRUST. IF THE EXPRESSION INCOME IS SO UNDERSTOOD, THEN WE HAVE TO TAKE THE ACCOUNTS OF THE ASSESSEE WITH REFERENCE TO THE RECEIPTS AND DEDUCT THEREFROM THE EXPENSES NECESSARY FOR EARNING OR LOOKING AFTER THAT INCOME. THE NET AMOUNT THAT REMAINS WOULD BE AVAILABLE FOR DISTRIBUTION OR APPLICATION FOR CHARITABLE PURPOSE . IN APPLYING THE INCOME FOR CHARITABLE PURPOSES, EVEN C APITAL 9 ITA NO. 744/DEL/2014 EXPENDITURE MAY BE INCURRED. THEREFORE, THE NATURE OF THE EXPENDITURE IN THE HANDS OF THE ENTITY WHICH RECEIVES THE MONEY IS NOT CRITERION. SO LONG AS THE ASSESSEE DISBURSES THE AMOUNT FOR CHARITABLE PURPOSES, WHETHER THE AMOUNTS ARE UTILIZED FOR CA PITAL AND REVENUE PURPOSES, BY THE CHARITY CONCERNED, THE ASSESSEE WOULD HAVE COMPLIED WITH THAT PART OF THE REQUIREMENTS OF SECTION 11, NAMELY, APPLICATION OF THE INCOME FOR CHARITABLE PURPOSES. THE AUTHORITIES WILL HAVE TO FIND OUT AS TO WHETHER THEY ARE REALLY CHARITABLE PURPOSES OR NOT. SUBJECT TO SUCH EXAMINATION, THE APPLICATION OF THE INCOME FOR CHARITABLE PURPOSES WILL HAVE TO BE EXCLUDED AND IT IS ONLY THE BALANCE THAT WOULD REQUIRE EXAMINATION FOR FINDING OUT WHETHER THE ASSESSEE HAS COMPLIES WITH THE RULE OF ACCUMULATION TO THE EXTENT OF RS. 10,000/ - OR 25 PER CENT OF THE INCOME, WHICHEVER IS HIGHER. 'IN FACT WHEREVER THE STATUTE CONTEMPLATED THE INCOME BEING COMPUTED IN THE MANNER SET OUT IN THE PROVISIONS OF THE ACT, APPROPRIATE WORDS ARE USED. FOR INSTANCE, IN SECTION 80E, WHICH WAS CONSIDERED BY THE SUPREME COURT IN CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO. LTD CIT1978 CTR (SCJ50: ( 1978) 113 ITR 84 (SC), AFTER THE EXPRESSION 'TOTAL INCOME THE FOLLOWING WORDS ARE ADDED IN BRACKETS : 'AS COMPUTED I N ACCORDANCE WITH THE OTHER PROVISIONS OF THIS ACT . THIS EMPHASISES THAT WHEREVER PARLIAMENT CONSIDERED THAT THE COMPUTATION SHOULD BE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, IT INTRODUCED THE CONCEPT BY USING APPROPRIATE LANGUAGE. IN THE ABSENCE OF ANY SUCH LANGUAGE IN SECTION 11(1), WE CONSIDER THAT THE COMPUTATION AS ENVISAGED BY THE OTHER PROVISIONS OF THE ACT CANNOT BE IMPORTED INTO SECTION 11(1). THE TRIBUNAL HAS IN A WAY MIXED UP THE NOTION OF TOTAL INCOME IN UNDERSTANDIN G THE EXPRESSION 'INCOME FROM PROPERTY HELD UNDER TRUST'. SECTION 14 OCCURS IN THE CHAPTER 'COMPUTATION OF TOTAL INCOME'. IT PROVIDES THAT ALL INCOME FOR THE PURPOSES OF CHARGE OF INCOME - TAX AND COMPUTATION OF TOTAL INCOME BE CLASSIFIED UNDER CERTAIN HEA DS. 10 ITA NO. 744/DEL/2014 THEREFORE, THE COMPUTATION UNDER THE DIFFERENCE CATEGORIES OR HEADS ARISES ONLY FOR THE PURPOSES OF ASCERTAINING THE TOTAL INCOME FOR THE PURPOSES OF CHARGE. THOSE PROVISIONS CANNOT BE INTRODUCED TO FIND OUT WHAT THE INCOME DERIVED FROM THE PROPERTY HE LD UNDER TRUST TO BE EXCLUDED FROM THE TOTAL INCOME IS, FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III.' [EMPHASIS ASSIGNED] TH E CASE OF CIT VS. MANAV MANGAL SOCIETY (2011) 237 CTR (P&H) 519: (2010) 328 ITR 421 MAY ALSO BE RE FERRED WHICH ALSO DEALS WITH SECTION 11. IN VIEW OF THE DISCUSSION ABOVE, IT IS VERY CLEAR THAT THE AO HAS ERRED IN MAKING AN ADDITION U/S 69C. THEREFORE, THE ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO 3. 9. FIRST OF ALL, WE MAY POINT OUT THAT SECTION 69C OF THE ACT PROVIDES AS FOLLOWS: 69C. WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE O PINION OF THE [ASSESSING] OFFICER, SATISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR;] OF PEAK 10. IN THE PRESENT CASE, THE ASSESSING OFFICER MA DE ADDITION UNDER SECTION 69 C OF THE ACT BY ALLEGING FOUR POINTS VIZ., (I) THE TRUST HAS VIOLATED THE PROVISIONS OF SECTION 11(1) (D) OF THE ACT (II) THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF FUND USED IN CASH EXPENDITURE FOR THE PURPOSE OF CONSTRUCTION OF BUILDING (III) THE ASSESSEE NEVER TOOK THE PLEA THAT THE AMOUNT OF PEAK HAS BEEN INCURRED ON EXPENDITURE MADE ON BEHALF OF M/S GALAXY GLOBAL 11 ITA NO. 744/DEL/2014 EDUCATIONAL TRUST BY M/S GOEL INTERNATIONAL PRIVATE LIMITED (IV) THERE IS NO ENTRY OF RS. 6,09,80,178/ - IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE HENCE EXPENDITURE MENTIONED IN THE SEIZED DOCUMENTS FROM THE PREMISES OF THE ASSESSEE REMAINED UNEXPLAINED. 11. BEFORE WE PROCEED TO ANALYSIS THE FACT OF THE CASE IN THE LIGHT OF PROVISIONS OF SECTION 69C OF THE ACT AND OTHER RELEVANT PROVISIONS IT WOULD BE NECESSARY TO CONSIDER THE RATIO OF THE DECISION OF HON BLE HIGH COURT OF DELHI IN THE CASE OF DIT (E) VS. KESHAV SOCIAL AND CHARITABLE FOUNDATION (SUPRA) AND DIT (E) VS. RONAK EDUCATION FOUNDATION (SUPRA). IN THESE DE CISIONS THE HON BLE HIGH COURT HELD THAT THE ADDITION UNDER SECTION 68 OF THE ACT CANNOT BE MADE AND SUSTAINED IF THE IMPUGNED AMOUNTS HAVE BEEN USED FOR THE CHARITABLE PURPOSES OF THE SOCIETY/TRUST. PRESENT CASE IN HAND IS PERTAINING TO ADDITION UNDER SEC TION 69C OF THE ACT AND AS PER PROVISO INSERTED BY THE FINANCE (NO.2) ACT, 1998 W . E . F 01.04.1999 NOT WITH STANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THE ACT, SUCH UN EXPLAINED EXPENDITURE WHICH IS DEEM TO BE THE INCOME OF THE ASSESSEE SHALL NOT BE ALLOWED AS A DEDUCTION UNDER ANY HEAD OF INCOME. THUS, BENEFIT OF THE RATIO OF THESE DECISIONS IS NOT AVAILABLE FOR THE ASSESSEE IN THE PRESENT CASE HAVING DIFFERENT PROVISION OF SECTION 69C OF THE ACT AS INVOKED BY THE AO AND DEMOLISH BY THE CIT(A). 12 ITA NO. 744/DEL/2014 12. UNDISPUTEDLY ASSESSEE TRUST WAS FORMED ON 11.04.2008 AND REGISTRATION UNDER SECTION 12A OF THE ACT WAS GRANTED BY THE CIT PUNCHKULA VIDE ORDER DATED 30.09.2009 WHICH IS STILL ENFORCE D . IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE TRUST WAS FORMED WITH T HE OBJECTIVE IMPARTING EDUCATION. SO FAR AS, ALLEGATION OF THE AO REGARDING VIOLATION OF PROVISION OF SECTION 11(1)(D) OF THE ACT IS CONCERNED AS PER THIS PROVISION INCOME IN FORM OF VOLUNTARY CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FO RMED PART OF CORPUS OF THE TRUST ALL INSTITUTION SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR O F THE PERSONS IN RECEIPT OF SUCH INCOME. IN THE PRESENT CASE FROM THE COPIES OF THE LETTERS PLACED AT REVENUE PAPER BOOK - II PAGES 94 TO 96 IT I S CLEAR THAT THE ASSESSEE SUBMITTED CONFIRMATIONS OF THE CORPUS DONORS I.E. M/S GOEL INTERNATIONAL PRIVATE LIMITED THAT THE COMPANY MADE VOLUNTARILY DONATION TO THE ASSESSEE TRUST IN CASH OF RS. 2,87,91,723/ - DURING FY 2008 - 09 AND RS. 3,21,88,455/ - DURING FY 2009 - 10 PERTAINING TO AY 2009 - 10 AND 2010 - 11 IN CASH FOR SETTING UP IN CONSTRUCTION OF BUILDING. IN THE TOTALITY OF THE ALLEGATIONS MADE BY THE AO WE OBSERVED THAT THE MAIN BASIS OF THE IMPUGNED ADDITION IS THAT THE ASSESSEE TRUST COULD NOT EXPLAINED TH E SOURCE OF EXPENDITURE INCURRED BY IT ON CONSTRUCTION OF BUILDING. IN THIS SITUATION WHEN THE FUNDS HAVE BEEN USED AS PER SPECIFIC DIRECTIONS OF THE DONORS OF VOLUNTARILY CONTRIBUTIONS FOR THE 13 ITA NO. 744/DEL/2014 PURPOSE OF CONSTRUCTION OF THE BUILDING THEN VIOLATION OF PROV ISIONS OF SECTION 11(1)(D) OF THE ACT, CANNOT BE LABELLED AGAINST THE ASSESSEE. WE MAY ALSO OBSERVED THAT FROM PAGE 197 (APB) IN THE NOTES OF ACCOUNTS FORMING PART OF BALANCE SHEET AS ON 31.03.2009 MENTIONS THAT THE ASSESSEE TRUST RECEIVE VOLUNTARILY CONTR IBUTIONS AND CORPUS DONATIONS REPRESENTS ACQUISITIONS OF ASSETS I.E. LAND BUILDING ETC. ON BEHALF OF THE TRUST BY THE TRUSTEE S. PAGE 199 OF THE (APB) FURTHER MANIFEST THAT THE ASSESSEE TRUST ALSO RECEIVED CORPUS FUND FROM SHRI DEVI CHAND, VINOD GOEL, VIJA Y GOEL, KRISNHAN GOEL, RAJ BALA, RAJNI GOEL, SEEMA GOEL , WITH SPECIFIC DIRECTIONS AS PER NOTES TO ACCOUNTS (SUPRA) , IN THE NOTES TO ACCOUNTS IT HAS ALSO BEEN MENTIONED THAT THE CORPUS DONATIONS WHICH ARE REPRESENTED BY ACQUISITIONS OF ASSETS SUCH AS LAND B UILDING ETC. BY THE TRUST THEN IT CANNOT BE HELD THAT VOLUNTARILY CONTRIBUTIONS RECEIVED BY THE ASSESSEE WITH SPECIFIC DIRECTIONS DOES NOT FORM PART OF CORPUS DONATIONS . HENCE, FIRST ALLEGATION OF THE AO IS NOT SUSTAINABLE. 13. THE NEXT ALLEGATION MADE B Y THE AO IS THAT THE ASSESSEE COULD NOT EXPLAINED, THE SOURCE OF EXPENDITURE INCURRED ON CONSTRUCTION OF BUILDING. ON THIS ISSUE AS WE HAVE NOTED EARLIER THAT THE ASSESSEE BY WAY OF CONFIRMATION LETTERS OF THE DONORS PLACED AT REVENUES PAPERS BOOK PAGE 94 AND 95 ESTABLISHED THAT THE IMPUGNED VOLUNTARILY CONTRIBUTIONS WERE MADE 14 ITA NO. 744/DEL/2014 BY DONOR M/S GOEL INTERNATIONAL PVT. LTD. WITH SPECIFIC DIRECTIONS THAT THEY SHALL BE USED FOR THE CONSTRUCTION OF BUILDING THUS IT HAS TO BE HE LD THAT, IT SHALL FORM PART OF CORPUS D ONATIONS RECEIVED BY THE TRUST AND USED FOR THE CONSTRUCTION OF ITS BUILDING. WE MAY ALSO POINT OUT THAT FROM THE LETTER OF PART RETRACTION AVAILABLE AT PAGES 102 TO 104 OF THE ASSESSEE S PAPER BOOK. IT IS IMPLY CLEAR THAT THE GOEL GROUP OF ASSESSEE S INCL UDING M/S GOEL INTERNATIONAL PVT. LTD. SURRENDERED RS. 12.66 CRORE FOR AY 2009 - 10 AND 2010 - 11 WHICH INCLUDE RS. 5.00 CRORE USED FOR THE PURPOSE OF PURCHASE OF LAND FOR THE TRUST AND OTHER DONATIONS. AT THIS STAGE WE MAY ALSO POINT OUT THAT FROM THE COPY OF THE ASSESSMENT ORDER (FOR AY 2009 - 10 PLACED AT PAGES 235 TO 257 OF APB) IT IS CLEAR THAT THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION PERTAINING TO VOLUNTARY CONTRIBUTIONS TO THE ASSESSEE TRUST AND THUS IT IS PRESUMED THAT THE SAME AO HAS ACCEPTED FACT OF VOLUNTARY CONTRIBUTIONS BY THE SAID COMPANY TO THE ASSESSEE TRUST AND THIS AMOUNT WAS GIVEN BY THE DONOR TO THE ASSESSEE TRUST WITH SPECIFIC DIRECTIONS THAT THE SAME SHOULD BE USED FOR CONSTRUCTION OF BUILDING THEREFORE IT FORMED PART OF CORPUS DONATIO NS AND THUS SOURCE OF IMPUGNED AMOUNTS IS CLEARLY DISCERNABLE FROM THE ABOVE NOTED FACTS AND DOCUMENTS. 14. WE MAY ALSO POINT OUT THAT THE MAIN THRUST OF THE AO IS THAT THE ASSESSEE DID NOT DISCLOSE THE EXPENDITURE ON THE BUILDING IN THE FIRST BALANCE SHE ET PREPARED BEFORE THE SEARCH AND IT WAS SHOWN IN THE SUBSEQUENT 15 ITA NO. 744/DEL/2014 BALANCE SHEET PREPARED AFTER SEARCH ON 09.12.2011. THEREFORE SUBSEQUENT INCLUSION OF THIS AMOUNT IN THE BUILDING IS AFTER THOUGHT. ON THIS ISSUE WE OF THE CONSIDER VIEW THAT THE SEARCH WAS CO NDUCTED ON GOEL GROUP INCLUDING M/S GOEL INTERNATIONAL PVT. LTD., GOEL OVERSEAS AND ASSESSEE TRUST WHEREIN GOEL GROUP DECLARED AND SURRENDERED HUGE AMOUNTS AND ALSO PAID TAX AND INTEREST THEREON AFTER FILING RETURN OF INCOME IN RESPONSE TO THE NOTICE OF TH E AO UNDER SECTION 153A OF THE ACT. WHEN THE DONOR M/S GOEL INTERNATIONAL PVT. LTD. IS SURRENDERING HUGE AMOUNTS INCLUDING THE AMOUNTS WHICH WERE VOLUNTARILY CONTRIBUTED AND DONATED TO THE ASSESSEE TRUST FOR THE PURPOSE OF CONSTRUCTION OF BUILDING THEN THE AMOUNT WHICH HAS BEEN SURRENDERED IN THE CASE OF M/S GOEL INTERNATIONAL PVT. LTD. AND ALL DUE TAXES AND INTEREST ETC. HAS BEEN PAID BY THE SAID COMPANY THEN THE SOURCE OF EXPENDITURE INCURRED BY THE ASSESSEE TRUST ON CONSTRUCTION OF BUILDING HAS TO BE HEL D AS EXPLAINED AND THE SAME AMOUNT WHICH WAS SURRENDERED AND TAXED IN THE HANDS OF M/S GOEL INTERNATIONAL PVT. LTD. CANNOT BE TAXED AGAIN IN THE HANDS OF ASSESSEE TRUST UNDER SECTION 69C OF THE ACT, AND OBVIOUSLY IT WOULD AMOUNT TO DOUBLE TAXATION ON THE S AME AMOUNT WHICH IS NOT PERMISSIBLE AS PER WELL ACCEPTED PRINCIPLE OF THE TAX JURISPRUDENCE. 15. SO FAR AS THIRD ALLEGATION OF THE AO THAT THE ASSESSEE NEVER TOOK THE PLEA THAT THE AMOUNT OF PEAK HAS BEEN INCURRED ON EXPENDITURE MADE ON BEHALF OF 16 ITA NO. 744/DEL/2014 M/S GAL AXY GLOBAL EDUCATIONAL TRUST BY M/S GOEL INTERNATIONAL PRIVATE LIMITED IS CONCERNED WE ARE OF THE VIEW THAT THIS PLEA WAS NOT RELEVANT TO BE TAKEN BY THE ASSESSEE TRUST BECAUSE WHEN IT IS EXPLAINING THE SOURCE OF EXPENDITURE INCURRED IN THE CONSTRUCTION OF BUILDING THAT THE AMOUNT WAS RECEIVED FROM M/S GOEL INTERNATIONAL PVT. LTD. WITH SPECIFIC DIRECTIONS AS CORPUS FUND THEN PLEA OF THEN THE PLEA OF AMOUNT OF PEAK MAY BE RELEVANT FOR M/S GOEL INTERNATIONAL PVT. LTD. BUT NOT IN THE CASE OF PRESENT ASSESSEE T HEREFORE THIS ALLEGATION OF THE AO DOES NOT HAVE LAGS TO STAND ON THE JUSTIFIED BASIS. 16. REGARDING ALLEGATION OF NO ENTRY IN THE BOOKS OF THE ACCOUNT IS CONCERNED AND THE EXPENDITURE MENTIONED IN THE SEIZED DOCUMENTS RECOVERED FROM THE PREMISES OF THE A SSESSEE TRUST IS CONCERNED WE ARE OF THE VIEW OF THAT WHEN THE ASSESSEE HAS EXPLAINED SOURCE OF THE FUNDS INCURRED AS EXPENDITURE ON CONSTRUCTION OF BUILDING THAT THE CORPUS FUNDS WAS RECEIVED FROM M/S GOEL INTERNATIONAL PVT. LTD. WHICH WAS ALSO SEARCH THE N THE AMOUNTS WHICH WERE RECORDED IN THE SEIZED MATERIAL PERTAINING TO M/S GOEL INTERNATIONAL PVT. LTD. AND THE SAME AMOUNT WHICH WAS RECORDED IN THE SEIZED MATERIAL FOUND FROM THE ASSESSEE TRUST PREMISES DOES NOT ATTRACT PROVISIONS OF SECTION 69C OF THE A CT AS WHEN THE SAME AMOUNT HAS BEEN SURRENDERED AND TAXED IN THE HANDS OF DONOR THEN THE SOURCE OF THE FUNDS WHICH WERE USED FOR EXPENDITURE AS TO HELD AS EXPLAINED IN THE HANDS OF 17 ITA NO. 744/DEL/2014 DONEE ASSESSEE TRUST AND PROVISIONS OF SECTION 69C OF THE ACT CANNOT BE INV OKED FOR MAKING ADDITION ON ACCOUNT EXPLAINED EXPENDITURE. AT THE JUNCTURE WE MAY ALSO POINT OUT THAT IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT WHEN SEPARATE ENTITIES ARE FILING REVISED COMPUTATION AND RETURN OF INCOME THEN DISCRIMPENSES IN T HE EARLIER RETURN FILED BEFORE SEARCH AND FILED AFTER SEARCH WOULD BE FOUND AND THIS CANNOT BE A BASIS FOR MAKING ADDITION ON THE AMOUNT WHICH HAS BEEN SURRENDERED AND TAXED IN THE HELD OF ONE ENTITY OF THE GROUP AND WHICH WAS EXTENDED AS DONATION BY THAT ENTITY TO THE OTHER ENTITY OF THE GROUP SEARCHED THEN THE AMOUNTS WHICH WERE SURRENDERED AND TAXED IN THE HANDS OF ONE ASSESSEE CANNOT BE HELD AS UNEXPLAINED EXPENDITURE IN THE HANDS OF OTHER ASSESSEE OF THE SAME GROUP WHO USE THE SAME AMOUNT FOR THE PURPO SE SPECIFIED BY THE DONOR TOWARDS CONSTRUCTIONS OF THE BUILDING. 17. IN VIEW OF ABOVE DISCUSSION WE REACH TO A LOGICAL CONCLUSION THAT THE ASSESSING OFFICER MADE ADDITION UNDER SECTION 69C OF THE ACT WITHOUT ANY JUSTIFIED REASON AND BASIS AND CIT(A) WAS Q UITE JUSTIFIED AND CORRECT IN DISMISSING THE SAME FOR BOTH THE YEARS. WE, THEREFORE, OF THE CONSIDER OPINION THAT WE ARE UNABLE TO SEE ANY AMBIGUITY OR PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER FOR BOTH THE YEARS AND HENCE WE UPHOLD THE SAME. ACCORDINGLY, SOLE GROUND IN BOTH THE APPEALS BEING DEVOID OF MERIT IS DISMISSED. 18 ITA NO. 744/DEL/2014 18. IN THE RESULT BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF FEBRUARY , 201 7 . ( P.K. BANSAL ) ( C.M. GARG ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01 - 0 2 - 201 7 . SH COPY OF ORDER TO : - 1 ) THE APPELLANT; 2 ) THE RESPONDENT; 3 ) THE CIT ; 4 ) THE CIT(A) - , NEW DELHI ; 5 ) THE DR, I.T.A.T., NE W DELHI ; BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT , NEW DELHI 19 ITA NO. 744/DEL/2014 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 0 6 .1 2 .2016 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 0 9 .1 2 .2016 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBE R JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS .1 2 .2016 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON .1 2 .2016 SR. PS/PS 7 FILE SENT TO BENCH CLERK .1 2 .2016 SR. PS/PS 8 DATE ON WHICH THE FILE GOES T O THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE A.R. 10 DATE OF DISPATCH OF ORDER