The ACIT, 3(1), Bhopal V. M/s Vichar Bharti Education Society, Bhopal

ITA 280/IND/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61979 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 05-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Keywords: Capital asset
• Section: 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAAAV0976F I.T.A.NO. 280 /IND/2011 A.Y. : 2007 - 08 ACIT, 3(1), BHOPAL VS VICHAR BHARTI EDUCATION SOCIETY, THAKRAL NAGAR, O0PP.PATEL NAGAR, RAISEN ROAD, BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI KESHAVE SAXENA, CIT DR RESPONDENT BY : SHRI SUMIT NEMA, ADV. DATE OF HEARING : 03 .0 5 .2012 DATE OF PRONOUNCEMENT : 07 . 0 5 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 7.7.2011 FOR THE ASSESSMENT YEAR 20 07-08. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE : - -: 2: - 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN 1. HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR THE BENEF ITS U/S 11 & 12 OF THE INCOME-TAX ACT, 1961, AND THE PROVISIONS OF SECTION 13 IS NOT APPLICABLE IN THE C ASE OF THE ASSESSEE. 2. HOLDING THAT THE PROVISION OF SECTION 13(2)(A) HAVE NO APPLICATION IN THE CASE OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS NARRATED IN ASSESSMENT ORDER AND NOT TREATING THE FUNDS DIVERTED TO ITS SISTER SOCIETY M/S. DEVI SHAKUNTALA CHARITABLE FOUNDATION AS VIOLATION OF SECTION 13(2)(H). 3. DELETING THE ADDITION OF RS. 5,05,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DONATION TO M/S. DEVI SHAKUNTALA CHARITABLE FOUNDATION. 4. HOLDING THAT THE ASSESSEE IS FULLY ELIGIBLE FOR THE DEDUCTION CLAIMED AT RS. 51,17,576/- AS AN APPLICATION OF INCOME U/S 11 AND 12 FOR THE -: 3: - 3 ACQUISITION OF FIXED ASSETS, WITHOUT APPRECIATING T HE FACTS NARRATED IN THE ASSESSMENT ORDER. 5. DELETING THE ADDITION OF RS. 1,27,144/- ON ACCOUNT OF TELEPHONE EXPENSES AND RS. 1,39,644/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF TRAVELLING EXPENSES. 6. HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 11(1)(A) OF THE INCOME-TAX ACT, 1961. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. F ACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED WITH THE REGISTRAR OF SOCIETIES VIDE REGISTRATION NO.368/90 DATED 14.11.1990. THE ASSESSEE SOCIETY RUNS AN ENGINEERIN G COLLEGE UNDER THE NAME AND STYLE OF ORIENTAL INSTITUTE OF SCIENCE & TECHNOLOGY. REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961, WAS GRANTED BY CIT, BHOPAL, VIDE ORDER NO. HQRS/INSP/12A/38/92-93 DATED 23.11.1992. 4. IN THE ASSESSMENT ORDER, THE A.O. HAS OBSERVED THAT THE ASSESSEE HAS GIVEN INTEREST FREE LOAN TO RELATE D CONCERN -: 4: - 4 DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION, WHER E THE EXECUTIVE BODY CONSIST OF MOSTLY K.L. THAKRAL & HIS FAMILY MEMBERS AND, THEREFORE, THE THAKRAL FAMILY HAVE SUB STANTIAL INTEREST IN BOTH THE SOCIETIES. THE A.OS. THUS INFE RRED THAT THERE IS A VIOLATION OF CLAUSE(H) OF SECTION 13(2). THE SOCIETY HAS ALSO NOT CHARGED INTEREST ON THE LOAN AND THUS IT HAS FURTHER VIOLATED CLAUSE (A) OF SECTION 13(2). THERE FORE, THE A.O. DID NOT ALLOW EXEMPTION TO ASSESSEE U/S. LL & 12 OF THE LT. ACT. 5. BY THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED ASSESSEES CLAIM AFTER HAVING THE FOLLOWING OBSERVA TIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE SUBMISSIONS OF THE LEARNED COUNSEL AND THE CASE LAWS RELIED UPON BY HIM. THE LEARNED COUNSEL HAS STATED THAT THE ISSUE IS FULLY COVERED BY THE DECIS ION OF CIT(A)-II ORDER DATED 29.01.2007 IN APPEAL NO. CIT(A)II/BPL/IT -85/2006-07 WHICH HAS BEEN FURTHER CONFIRMED BY THE APPELLATE TRIBUNAL IN ITS DECISION DATED 13.7.2010. THUS, RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTIONAL TRIBUNAL, I HOLD THAT TH E -: 5: - 5 ASSESSEE IS ELIGIBLE FOR THE BENEFITS U/S.11 & 12 O F THE I. T. ACT, 1961 AND THE PROVISIONS OF SECTION 1 3 ARE NOT APPLICABLE IN THE CASE OF APPELLANT. ACCORDINGLY, I DECIDE THIS GROUND IN FAVOUR OF THE APPELLANT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT IN ASSESSEES OWN CASE, THE TRIBUN AL VIDE ITS ORDER DATED 13.7.2010 HAVE HELD THAT PROVISIONS OF SECTION 13(2)(H) READ WITH SECTION 13(2)(A) AND SECTION 13( 1)(B)(1) ARE NOT APPLICABLE TO THE ASSESSEE. FOLLOWING WAS THE P RECISE OBSERVATION OF THE TRIBUNAL IN ITS ORDER DATED 13.7 .2010 AT PARA 34 :- AS REGARD TO ISSUES RAISED IN GROUND NOS. 2 & 3, W E FIND THAT NONE OF THE PERSONS OF THE ASSESSEE SOCIE TY ARE HAVING SUBSTANTIAL INTEREST IN M/S. DEVI SHAKUNTALA THAKARAL AND CHARITABLE FOUNDATION AND THE LAND IS ALSO REGISTERED IN THE NAME OF THE ASSESSEE SOCIETY. HENCE, IN OUR OPINION, THE PROVISIONS OF SECTION 13(2)(H) READ WITH SECTION 13(2)(A) AND 13(1)(D)(1) ARE ALSO NOT APPLICABLE. T HIS -: 6: - 6 VIEW IS BASED IN REGARD TO THESE ISSUES. THUS, BOTH THESE GROUNDS ARE ALSO DISMISSED. 7. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDE R CONSIDERATION ARE IN PARI MATERIA, RESPECTFULLY FOL LOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR HOLDING TH AT PROVISIONS OF SECTION 13 ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE. 8. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF DISALLOWANCE OF DONATION TO M/S.DEVI SHAKUNTALA THA KRAL CHARITABLE FOUNDATION. IN THE ASSESSMENT ORDER, THE A.O. HAS DISCUSSED THIS ISSUE IN PARA 6 AT PAGE 6 & 7 OF HIS ORDER. THE A.O. OBSERVED THAT THE DONATION OF RS. 5,05,00,000 HAS B EEN GIVEN TO DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDAT ION. THIS IS A HUGE DONATION AND AFTER THIS DONATION, THERE I S A NET DEFICIT, MEANING THEREBY THAT THE DONATION HAS BEEN GIVEN OUT OF PAST ACCUMULATED FUNDS WHICH IS NOT ALLOWABLE IN VIEW OF EXPLANATION TO SUB-SECTION (2) OF SECTION 11 OF THE LT. ACT. THE A.O. FURTHER OBSERVED THAT THE DONATION HAS BEEN GIVEN T O RELATED CONCERN AND, THEREFORE, THERE IS A VIOLATIO N OF SECTION 13(1)(C)(II) AND THUS THE PROVISIONS OF SECTION 11 & 12 SHALL NOT -: 7: - 7 OPERATE. IN THE CONCLUDING PARA, THE A.O SAID THAT THE PROVISION OF SECTION 13(L)(D)(I) AND 13(I)(C)(II) A RE CLEARLY ATTRACTED AND THE BENEFIT OF SECTION 11 & 12 IS NOT GIVEN TO THE SOCIETY, THEREFORE, THE COMPUTATION OF TOTAL INCOME IS MADE UNDER THE NORMAL PROVISIONS OF THE LAW AND HENCE HE HAD DISALLOWED THE DONATION. 9. AFTER CONSIDERING THE FACTS, THE LD. CIT(A) DIRECTE D THE ASSESSING OFFICER TO ALLOW EXEMPTION U/S 11. FOLLOW ING WAS THE PRECISE OBSERVATION OF THE CIT(A) :- I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE SUBMISSIONS OF THE LEARNED COUNSEL AND THE CASE LAWS RELIED UPON BY HIM. THE OBSERVATION OF THE A.O. THAT AFTER THIS DONATION, THERE AROSE A NET DEFICIT, IN MY OPINION IS NEITHER JUSTIFIED NOR PRO PER BECAUSE THE A.O. HAS NOT INCLUDED THE INCOME OF RS. 22754725 RECEIVED BY WAY OF ADVANCE FEE IN THE RELEVANT ASSESSMENT YEAR AND OFFERED THE SAME BY THE ASSESSEE FOR THE PURPOSE OF ASSESSMENT. THE DETAILED REASONS HAVE ALSO BEEN GIVEN BY THE -: 8: - 8 ASSESSEE FOR SUCH INCOME AND, THEREFORE, SUCH INCOME REQUIRES INCLUSION IN THE ASSESSMENT. FROM THE CHART GIVEN BY THE ASSESSEE IN HIS SUBMISSION, IT IS EXPLICITLY CLEAR THAT THE DONATION HAS BEEN MADE OUT OF THE CURRENT YEAR'S INCOME. THE OTHER OBSERVATION OF THE A.O. THAT AS THE PROVISIONS OF SECTION 13 ARE APPLICABLE HENCE THE BENEFIT OF SECTION 11 & 12 IS NOT ALLOWED IS ALSO NOT JUSTIFIE D BECAUSE I HAVE ALREADY HELD IN THE PRECEDING GROUND THAT THE PROVISIONS OF SECTION 13 ARE NOT ATTRACTED AND, THEREFORE, THE ASSESSEE IS ELIGIBLE FOR THE BENEFIT U/S. LL & 12. CONSIDERING THE FACTS OF CASE AND THE CASE LAWS RELIED UPON BY THE ASSESSEE, I FIND THAT THE DISALLOWANCE OF DONATION OF RS.50500000/- IS NOT JUSTIFIED AND, THEREFORE, THE AO IS DIRECTED TO ALLOW IT AS AN APPLICATION OF INCOME U/S. 11 OF THE LT. ACT. THIS GROUND IS ACCORDINGLY DECIDED IN FAVOUR OF THE ASSESSEE. -: 9: - 9 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT DONATION WAS GIVEN OUT OF CURRENT YEARS INCOME. AS THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITS ORDER DATED 13.7.2010 HAVE ALREADY HELD THAT PROVISIONS O F SECTION 13 ARE NOT APPLICABLE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR ALLOWING CLAIM OF DONATION TO DEVI SH AKUNTALA THAKRAL CHARITABLE FOUNDATION. 11. GROUND NO. 4 RELATES TO ALLOWING DEDUCTION CLAIMED AT RS. 51,17,576/- AS AN APPLICATION OF INCOME, ON ACC OUNT OF ACQUISITION OF FIXED ASSETS. 12. FROM THE RECORD, WE FOUND THAT THE A.O. HAS DENIED THE DEDUCTION ON THE GROUND THAT THE BENEFIT OF SECTION 11 & 12 ARE NOT ALLOWED TO THE ASSESSEE, DEDUCTION IN RESPE CT OF ACQUISITION OF CAPITAL ASSET CANNOT BE ALLOWED. THE CONTENTION OF THE ASSESSEE WAS THAT THE PROVISIONS OF SECTION 13 ARE NOT APPLICABLE. THE ASSESSEE IS REGISTERED U/S.12A OF T HE I T. ACT AND, THEREFORE, THE DEDUCTION OF THE SAME IS FULLY ADMISSIBLE. THE ASSESSEE CONTEND FURTHER THAT IN EARLIER YEARS ALSO SIMILAR DISALLOWANCE WAS MADE ON IDENTICAL REASONS AND THE LEARNED FIRST APPELLATE AUTHORITY DELETED ALL SUCH ADDITION S. THE MAIN -: 10: - 10 ORDER WAS PASSED IN A. Y. 2003-04 DATED 29.01.2007 (APPEAL NO. CIT(A)-II/BPL/IT-85/06-07). 13. BY THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED ASSES SEES CLAIM FOR DEDUCTION ON ACCOUNT OF ACQUISITION OF CA PITAL ASSETS AFTER HAVING FOLLOWING OBSERVATIONS :- '27. AS REGARD TO ISSUE OF APPLICATION OF INCOME I N RESPECT OF ACQUISITION OF FIXED ASSETS, WE FIND TH AT IT IS NOT IN DISPUTE THAT SUCH ASSETS HAVE BEEN ACQUIRED FOR THE PURPOSE OF ADVANCEMENT OF THE OBJECTS OF THE SOCIET Y AND, THEREFORE, SUCH INVESTMENT SHOULD BE TREATED AS AN APPLICATION OF INCOME IN TERMS OF THE PROVISIONS OF SECTION 11 OF THE ACT. THUS, THESE GROUNDS OF THE REVENUE A RE WITHOUT ANY MERIT, HENCE, DISMISSED IN ALL THE YEAR S. ' 14. WE HAVE CONSIDERED RIVAL CONTENTIONS. AS THE TRIBUN AL IN ASSESSEES OWN CASE HAS ALREADY HELD THAT THE ASSES SEE IS ELIGIBLE FOR CLAIM OF DEDUCTION U/S 11 AND SINCE TH E ASSETS HAVE ACQUIRED FOR THE PURPOSE OF ADVANCEMENT OF THE OBJECTS OF THE SOCIETY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) -: 11: - 11 FOR ALLOWING CLAIM OF DEDUCTION ON ACCOUNT OF ACQUI SITION OF CAPITAL ASSETS AMOUNTING TO RS. 51,17,576/-. 15. NEXT GRIEVANCE OF REVENUE RELATES TO DELETION OF AD DITION OF RS. 1,27,134/- ON ACCOUNT OF TELEPHONE EXPENSES AND RS. 1,39,644/- ON ACCOUNT OF TRAVELLING EXPENSES. 16. WITH REGARD TO DISALLOWANCE OF TELEPHONE EXPENSES, THE A.O.'S DISCUSSION IS IN PARA 7 OF HIS ORDER. THE A. O. OBSERVED THAT THE TOTAL EXPENSES CLAIMED TOWARDS TELEPHONE I N THE INCOME & EXPENDITURE ACCOUNT IS RS. 2,19,219/- AND OUT OF THIS 1,27,144/- PERTAINS TO THE PERSONAL/OFFICIAL U SE BY THE CHAIRMAN, PRESIDENT OF THE SOCIETY AND THEIR FAMILY MEMBERS. THE ASSESSEE WAS ASKED TO FURNISH THE CALL-WISE DET AILS BUT IT WAS SUBMITTED BY THE ASSESSEE THAT IT IS NOT POSSIB LE TO KEEP A RECORD OF EACH AND EVERY TELEPHONE CALL IN THE MANN ER DESIRED. THE A.O., THEREFORE, INFERRED THAT THE SOCIETY HAS PASSED ON BENEFITS TO THE PERSONS MENTIONED IN SECTION 13(3) AND, THEREFORE, THE BENEFIT OF THE SECTION 11 & 12 ARE N OT AVAILABLE. THUS AN AMOUNT OF RS. 1,27,144/- HAS BEEN DISALLOWE D OUT OF TOTAL EXPENSES. -: 12: - 12 17. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE DISALLOWANCE BY OBSERVING THAT NO PERSONAL BENEFIT WAS GIVEN TO THE RELATED PERSONS IN VIOLATION OF SECTION 13. FURTHERMORE, THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITS ORDER FOR THE ASSESSMENT YEAR 2001-02 HELD AS UNDER :- 11. THE TELEPHONE INSTALLED AT THE RESIDENCE OF THE CHAIRMAN AND THE MOBILE PHONES GIVEN TO THE OFFICE BEARERS WERE FOR THE PURPOSE OF THE WORK OF THE SOCIETY BECAUSE THESE PEOPLES ARE WORKING ON WHOLE TIME BASIS EXCLUSIVELY FOR THE SOCIETY AND THAT THE Y ARE NOT ENGAGED IN ANY OTHER BUSINESS PROFESSION OR ANY EMPLOYMENT. NO MEMBER CAN ATTEND THE OFFICE 24 HOURS. HENCE THE TELEPHONE WAS INSTALLED AT HIS RESIDENCE TO LOOK AFTER THE SOCIETY'S WORK AND TO G IVE THE NECESSARY INSTRUCTIONS FROM PHONE CALLS. THE DETAILS OF TELEPHONE EXPENSES WITH COPY OF TELEPHON E BILLS WERE SUBMITTED IN THE ASSESSMENT PROCEEDINGS. THE EXPENSES INCURRED ON TELEPHONE ARE VERY FAIR AN D REASONABLE AND, THEREFORE, IT WOULD NOT BE JUSTIFIE D TO DRAW INFERENCE THAT SUCH EXPENSES ARE THE PERSONAL -: 13: - 13 EXPENSES OF THE MEMBERS. IT HAS BEEN HELD BY VARIOU S COURTS THAT THE REASONABLE COMPENSATION GIVEN TO TH E MEMBERS OF THE SOCIETY FOR ACTUAL EXPENDITURE IS NO T A BENEFIT GIVEN TO THE MEMBERS. PRIVATE BENEFITS BARR ED U/S.13 CANNOT BE INFERRED FROM NORMAL TRANSACTION WHICH ARE NOT BARRED. REASONABLE EXPENDITURE INCURRED FOR TELEPHONE CANNOT BE HURDLE IN THE WAY OF EXEMPTION. THE ASSESSEE SUBMITS, THEREFORE, THE FAC TS OF THE CASE HAVE NOT BEEN APPRECIATED BY THE LEARNE D A. 0. OBJECTIVELY AND WITHOUT ANY CONCRETE AND POSITIVE EVIDENCE HE HAS RECORDED FINDINGS ON ASSUMPTIONS, PRESUMPTION, CONJECTURES AND SURMISES AN ERRONEOUSLY HELD THAT SECTION 13 IS ATTRACTED. THE PROVISIONS OF SECTION 13(2)(C) IN VIEW OF THE FACTS ABOVE HAS NO APPLICATION, THEREFORE, THE FINDINGS O F THE A.O. ARE WHOLLY WRONG, INJUDICIOUS AND UNLAWFUL AND BE QUASHED AND IT BE HELD THAT INCURRING OF EXPENDITURE IN THE PERFORMANCE OF DUTY BY THE OFFIC E BEARERS DOES NOT DISENTITLE THE ASSESSEE INSTITUTIO N FROM THE BENEFITS OF PROVISIONS OF SECTION 11. IT BE, -: 14: - 14 THEREFORE, HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION AND ALL OTHER BENEFITS AS PROVIDED IN SECTION 11 OF THE 1 T. ACT. IT IS REITERATED THAT THERE ARE NO PAYMENTS IN RESPECT OF TELEPHONES OF ANY OF THE MEMBERS OR THE OFFICE BEARER OF THE SOCIETY FOR THEIR PERSONAL BENEFITS. ALL THE TELEPHONE EXPENSES WERE INCURRED BY THE OFFICE BEARERS/MEMBERS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE AND THE OBJECT OF T HE ASSESSEE INSTITUTION. 18. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 AS NARRATED ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE OF EXPENDITURE TOWARDS TELEPHONE. 19. DISALLOWANCE OF TRAVELLING EXPENSES WERE DELETED BY THE LD.CIT(A) AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE GONE THROUGH THE ASSESSMENT ORDER AND ALSO G IVEN DUE CONSIDERATION TO THE DETAILED SUBMISSION OF THE AS SESSEE. I FIND FROM THE DETAILS OF TRAVELLING EXPENSES THAT SUCH E XPENSES RELATES TO INDORE VISITS, DELHI VISITS & JABALPUR V ISITS. THE -: 15: - 15 PURPOSE OF THESE VISITS HAS ALSO BEEN EXPLAINED BY THE APPELLANT IN ITS SUBMISSION AND FROM THE SAID EXPLA NATION, IT WOULD NOT BE JUSTIFIED TO INFER THAT VISITS TO SUCH PLACES ARE FOR THE PERSONAL BENEFITS OF THE OFFICE MEMBERS. THE OF FICE OF THE ALL INDIA COUNCIL OF TECHNICAL EDUCATION IS A REGULATOR Y BODY AND IS SITUATED AT DELHI AND, THEREFORE, THE VISIT TO D ELHI ARE INEVITABLE AND THERE IS NO EVIDENCE ON RECORD THAT SUCH VISITS WERE FOR THE PERSONAL BENEFIT FOR THE OFFICER BEARE RS. SO FAR AS THE OTHER TWO PLACES ARE CONCERNED, THE COLLEGES OF THE SOCIETY IS ARE FUNCTIONING AND, THEREFORE, FOR THE PROPER C ONTROL AND MANAGEMENT, THE VISITS ARE ALSO INEVITABLE. THE VOU CHERS AS ATTACHED WITH THE ASSESSMENT ORDER CARRIES THE DETA ILS OF PAYMENTS MADE IN THE COURSE OF TRAVELLING. FURTHER CONSIDERING THE COST OF LODGING AND BOARDING ETC IN THE PRESENT DAYS CANNOT BE CONSTITUTE AS UNREASONABLE. THE A.O. HAS ALSO NO T BROUGHT ANY MATERIAL ON RECORD THAT SUCH PAYMENTS ARE UNREA SONABLE AS COMPARED TO THE MARKET RATES FOR SUCH FACILITIES /SERVICES. IN MY OPINION, THE FINDINGS OF THE A.O. ARE BASED ON A SSUMPTIONS AND PRESUMPTIONS AND ON SUSPICION, HENCE SUCH FINDI NGS ARE NOT ACCEPTABLE. IN MY VIEW, THEREFORE, THE DISALLOW ANCE OF RS.139644 OUT OF TRAVELLING EXPENSES IS NOT JUSTIFI ED AND, -: 16: - 16 THEREFORE, THE SAME IS DELETED. THE GROUND NO. (7) READ WITH GROUND NO.(5) IS DECIDED IN FAVOUR OF THE ASSESSEE. 20. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND T HAT PURPOSE OF VISITS HAVE BEEN DULY EXPLAINED BY THE A SSESSEE, WHICH WERE UNDERTAKEN TO INDORE, DELHI, JABALPUR ET C. AS THE OFFICE OF ALL INDIA COUNCIL OF TECHNICAL EDUCATION IS SITUATED AT DELHI, THEREFORE, VISIT TO DELHI WAS INEVITABLE AND THERE WAS NO EVIDENCE ON RECORD THAT SUCH VISIT WAS FOR PERSONAL VISIT OF THE OFFICE BEARER. DETAILED FINDING HAS BEEN RECORDED B Y CIT(A) AT PAGE 23 AS REPRODUCED ABOVE, WHICH HAVE NOT BEEN CONTROVERTED BY DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON RECORD. 21. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) IN DELETING THE DISALLOWANCE OF TRAVELLING E XPENSES OF RS. 1,39,644/-. 22. WITH REGARD TO GROUND NO.6, THE ASSESSEE'S CONTENTI ON IS THAT THE A.O. HAS DENIED THE DEDUCTION CLAIMED AT R S. 1,65,22,945/- ON THE GROUND THAT SINCE THERE IS A V IOLATION U/S.13, THEREFORE, THE SAID DEDUCTION AS AN APPLICA TION OF -: 17: - 17 INCOME IS NOT ADMISSIBLE. THE ASSESSEE CONTENDED TH AT THERE IS NO VIOLATION OF SECTION 13 AND, THEREFORE, THIS DEDUCTION IS ADMISSIBLE AS AN APPLICATION OF INCOME. THUS THE DE DUCTION CLAIMED AT RS. 1,65,22,945/- BE ALLOWED. 23. BY THE IMPUGNED ORDER, THE LD. CIT(A) HELD THAT TH E ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S11(1)(A) OF T HE ACT. FOLLOWING WAS THE PRECISE OBSERVATION OF THE CIT(A) :- I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT. I FIND THAT IN THE RELEVANT YEAR, THE ASSESSEE HAD SHOWN A DEFICIT OF RS.1,18,58,041/- AND THE PROVISIONS OF S ECTION 13 WERE MADE APPLICABLE BY THE A.O. HENCE THE ASSESSEE WAS NOT ALLOWED DEDUCTION AS AN APPLICATION OF INCO ME U/S.11(L)(A). IN THIS APPELLATE ORDER, VIDE GROUND NO.(3), I HAVE HELD THAT THE ASSESSEE HAS NOT VIOLATED THE PROVISIONS OF SECTION 13 AND IS ENTITLED FOR THE DE DUCTION U/S.11 & 12 OF THE INCOME-TAX ACT, 1961. THEREFORE, I HOLD THAT THE ASSESSEE IS ELIGIBLE FOR THE DEDUCTION U/S 11(1)(A) OF THE INCOME-TAX ACT, 1961. -: 18: - 18 24. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. AS ALREAD Y DISCUSSED HEREINABOVE PROVISIONS OF SECTION 13 WAS NOT APPLICABLE TO THE ASSESSEE. AS THE ASSESSEE HAS NOT VIOLATED THE PRO VISIONS OF SECTION 13, THEREFORE, DEDUCTION U/S 11(1)(A) CANNOT BE DECLINED. THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 11 & 12 OF THE INCOME-TAX ACT, 1961. 25. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 7 TH MAY , 2012. SD SD (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :_7 TH ______MAY, 2012. CPU 345