Sreema Mahila Samity, Nadia V. D.C.I.T., Circle-Nadia, Nadia

ITA 2826/KOL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1243 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S ALLONG YADEN CIT LD
• Assessee Lawyers: K M ROY; P S GUPTA LD ARS
• Keywords: Charitable institution; Rule of consistency; Bad and doubtful debts
• Section: 12A; 12AA

Judgement Text

1 ITA NO. 2826/KOL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICI AL MEMBER I.T.A NO. 2826/KOL/ 2013 ASSESSMENT YEAR: 20 09-10 SREEMA MAHILA SAMITY PAN: AAAAS4589H. APPELLANT VS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-NADIA. RESPONDE NT FOR THE APPELLANT : S/SHRI K.M. ROY & P.S. GUPTA, LD.ARS,ADVOCATE FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL.CIT , LD.SR.DR DATE OF HEARING : 26-07-2017 DATE OF PRONOUNCEMENT : 13-10-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER DAT ED 17-10- 2013 OF CIT(A), XXXVI, KOLKATA FOR THE ASSESSMENT YEAR 2009-10. 2. GROUND NOS. 1 TO 4 ARE GENERAL IN NATURE RAISED QUESTIONING THE ANSWER OF THE CIT-A AND NEEDS NO ADJUDICATION. HENC E, THEY ARE DISMISSED. 3. GROUND NO. 5 IS RELATING TO ADDITIONS OF RS.71,6 8,803/- AND RS.38,27,197/- MADE ON ACCOUNT OF INCOME FROM MICRO FINANCE AND PROVISION FOR DOUBTFUL DEBTS RESPECTIVELY. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CHARITABLE INSTITUTION AND DECLARED TOTAL INCOME AS NIL. NOTI CE U/S. 143(2) OF THE 2 ITA NO. 2826/KOL/2013 ACT WAS ISSUED. IN RESPONSE TO WHICH, AN AR APPEARE D FROM TIME TO TIME AND THE CASE WAS DISCUSSED. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OPINED THAT THE ASSESSEE CARRIED MONEY LENDING BUSINESS TH ROUGH ITS 11 BRANCHES IN NADIA DISTRICT AND PROVIDED LOAN TO GEN ERAL PUBLIC AND SELF HELP GROUP (SHG) TO A SUM OF RS.11,76,58,642/- AND EARNED INTEREST INCOME OF RS. 3,15,52, 949/-. THE AO WAS OF THE OPI NION THAT THE ASSESSEE CARRIED AN ACTIVITY IN THE NATURE OF TRADE , COMMERCE OR BUSINESS AND NOT BEING THE CHARITABLE OBJECT, SHOW CAUSED WHY THE PROFITS GENERATED IN THE FORM OF INTEREST FROM MONE Y LENDING BUSINESS SHALL NOT BE TREATED AS INCOME. FOR WHICH, THE ASS ESSEE FILED WRITTEN SUBMISSION AND PLACED RELIANCE ON THE DECISIONS IN THE CASES OF DISHA INDIA MICRO CREDIT VS. CIT OF DELHI TRIBUNAL (ITAT, DELHI) SPANDANA VS. ACIT REPORTED IN (2010) 40 DTR 153 (VISAKHA) (TRIB) , ADIT (E) VS. BHARATHA SWAMUKHI SAMASTHE [2009] 28 DTR 13 (BANGAL ORE TRIBUNAL] AND THIAGARJAR CHARITIS VS. ACIT (1997) 0 92 TAXMAN 152 (SC) BARDA SAMITY AND TIA GAJA CHARITIS OF HONBLE SUPREME COURT. RELEVANT PORTION OF AOS ORDER IS REPRODUCED HEREI N BELOW:- 5. ASSESSEE'S REPLY. SRI S.N.SAHA, THE A/R, SUBMITTED ONE WRITTEN STATEM ENT AS BELOW: 'WITH REFERENCE TO YOUR SHOW CAUSE NOTICE NO. DCIT/ NADIA/2011-12/286 DATED 11.11.2011, IT IS INFORMED YOU THAT THE ASSESSEE WA S REGISTERED DURING THE YEAR, 1972 UNDER THE SOCIETY'S REGISTRATION ACT, 1961 AND SINC E THAT YEAR THE ASSESSEE WAS ENGAGED WITH THE CHARITABLE ACTIVITIES WHICH INCLUD ES, RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF & OTHER OBJECT OF GENERAL PUBLIC UTI LITY WITH THE OWN FINANCE (FROM DONATION RECEIVED) & FROM THE GRANT RECEIVED FROM F OREIGN CONTRIBUTION AS WELL AS INDIA GOVERNMENT. TO GIVE BETTER SERVICE TO LARGE NUMBER OF POOR PERS ONS IN THEIR VILLAGES, TOWNS ETC. FOR INCOME GENERATION AND TO HELP THEM AND THE IR FAMILY TO RISE OUT OF POVERTY THE ASSESSEE WAS ENGAGED IN ACTIVITIES OF PROMOTING MIC RO FINANCE SERVICES DURING THE YEAR, 2000 AS PERMITTED FROM TIME TO TIME BY THE RESERVE BANK OF INDIA. THE ASSESSEE WAS PROVIDING MICRO FINANCIAL SERVICES AS PER THE GUIDE LINES GIVEN BY THE RESERVE BANK OF INDIA. FURTHER THE ASSESSEE HAD MADE APPLICATION FOR FINANCIAL ASSISTANCE UNDER MICRO SCHEME TO UNITED BANK OF IND IA. STATE BANK OF INDIA, SIDBI, AXIS BANK, CARE & NABARD WHO SANCTIONED TO THE ASSE SSEE LOAN FOR FINANCING THE PROJECT UNDER MICRO CREDIT SCHEME WITH CERTAIN COND ITIONS AND STIPULATIONS WHICH HAD BEEN DULY COMPLIED WITH BY THE ASSESSEE. THERE WAS A SURPLUS OF RS.74,70,327.00 AS DISCLOSED BY YOU IN YOUR SHOW CAUSE NOTICE OF MICRO FINANCE ACTIVITY WHICH WAS NOT DIST RIBUTED AMONGST THE MEMBERS BUT HAVE BEEN UTILIZED TOWARDS EXCLUSIVELY TO LARGE NUM BER OF POOR PERSONS IN THEIR VILLAGES, TOWN ETC. FOR INCOME GENERATION AND THUS TO HELP TH EM AND THEIR FAN LILY TO RISE OUT OR POVERTY, NOT WITH MOTIVE OF PROFIT. HOWEVER MICRO FINANCE ACTIVITY IS A CHARITABLE ACTI VITY AS IT ALLEVIATES POVERTY AND ALSO BENEFITS SOCIO ECONOMICALLY WEAKER SECTION S OF THE SOCIETY AND SURPLUS EARNED FROM MICRO FINANCE ACTIVITY ALSO IS EXEMPTED U/ S. 11 OF THE INCOME TAX ACT. VARIOUS CASE LAWS IN FAVOUR OF NGO ENGAGED IN MICRO FINANCE ACTIVITIES ARE GIVEN BELOW. 3 ITA NO. 2826/KOL/2013 1) DISHA INDIA MICRO CREDIT V. CIT- JANUARY 28, 2011 (ITAT - DEL) SECTION 2 (15) READ WITH SECTION 12A/12AA OF THE IN COME TAX ACT 1961 - CHARITABLE PURPOSE. ACTIVITIES OF PROMOTING MICRO FINANCE SERVICES AS P ERMITTED FROM TIME TO TIME BY THE RESERVE BANK OF INDIA, EXCLUSIVELY TO LARGE NUMBER OF POOR PERSONS IN THEIR VILLAGES, TOWNS ETC. FOR INCOME GENERATION & THUS TO HELP THE M AND THEIR FAMILY TO RISE OUT OF POVERTY, NOT WITH MOTIVE OF PROFIT CAN BE CONSIDERED TO BE, CHARITABLE PURPOSE WITHIN THE MEANING OF SEC LION 2 (15). IT IS WELL SETTLED THAT WHEN A PROFIT IS USED TOWAR DS THE ACHIEVEMENT OF THE CHARITABLE OBJECTS OF THE TRUST, IT WOULD BE CONSIDERED TO BE INCIDENTAL TO THE ACHIEVEMENTS OF OBJECTS OF THE TRUST NOTWITHSTANDING THE PROFIT AND GAIN INVOLVED THEREIN. MERELY, BECAUSE THERE WAS A SURPLUS FROM THE ACTIVITY OF MICRO FINA NCING, THAT BY ITSELF COULD NOT BE A GROUND TO SAY THAT THE ASSESSEE DID NOT EXIST FOR C HARITABLE PURPOSE PARTICULARLY WHEN UNDER THE MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION, IT HAS BEEN CLEARLY PROVIDED THAT THE PROFIT WOULD NOT BE DISTRIBUTED A MONGST THE MEMBERS BUT SHALL BE UTILIZED TOWARDS ITS OBJECTS. 2) THE VISAKHAPATNAM, INCOME TAX APPELLANT TRIBUNAL IN THE CASE OF SPANDANA VS ACIT (2010) 40 DTR 153 (VISAKHA) (TRIB) HELD THAT MICROF INANCE ACTIVITY IS A CHARITABLE ACTIVITY AS IT ALLEVIATES POVERTY AND ALSO BENEFITS SOCIO-EC ONOMICALLY WEAKER SECTIONS OF THE SOCIETY. THE TRIBUNAL HELD THAT THE MICROFINANCE ACTIVITY WA S CHARITABLE IN NATURE BECAUSE OF THE FOLLOWING REASONS :- I) THE LOAN IS ADVANCED TO WEAKER SECTIONS OF THE S OCIETY TO MEET THEIR URGENT NEEDS. II) EVEN IF REASONABLE OR SLIGHTLY HIGHER INTEREST IS CHARGED, IT CANNOT BE HELD UNCHARITABLE BECAUSE THE COST OF RECOVERY IS VERY HIGH AND THE P OSSIBILITY OF BAD DEBT IS ALSO HIGH. III) THE FUNDS ARE GIVEN WITHOUT ANY SURETY OR GUAR ANTEE. SOME RELEVANT EXTRACT FROM THE CASE_ARE PROVIDED AS UNDER : MICROFINANCE ACTIVITY REQUIRES AN ORGANIZED SECTOR FOR PROCURING A LOAN TRAM BANKS OR OTHER FINANCIAL INSTITUTIONS FOR ITS DISBURSEMENT/ ADVANCEMENT OF LOAN TO POOR OR WEAKER SECTIONS OF THE SOCIETY IN WHICH THE ASSESSEE HAS T O INCUR A LOT OF EXPENDITURE. MOREOVER, WHEN A LOAN WAS GIVEN TO THE POOR WOMEN, THEY DO NO T HAVE ANY SURETY OR GUARANTEE TO STAND AND MOST OF THE TIMES THE LOAN COULD NOT BE R ECOVERED FROM THEM AND THAT ASPECT IS ALSO TO BE TAKEN INTO ACCOUNT BY THE ASSESSEE WHILE GRANTING A LOAN TO THE POOR WOMAN. NO DOUBT A SSESSEE IS THAT CHARGING HIGHER RATE OF INTEREST FROM THE POOR WOMEN OR THE DOWNTRODDEN OR SOCIO-ECONOMICALLY WEAKER SECTION OF THE SOCIETY. THE REASON BEHIND IS THAT M OST OF THE TIME THE ASSESSEE COULD NOT RECOVER THE LOAN FROM THESE POOR AND WEAKER SECTION S OF THE SOCIETY, BESIDES INCURRING HEAVY EXPENDITURE IN MAINTAINING THE ORGANIZED SECT OR. THESE POOR AND WEAKER SECTIONS HAPPILY AGREED WITH THE ASSESSEE FOR LOAN AT HIGHER RATE, ASSESSEE HAS ACCOMPLISHED ITS OBJECT OF MICROFINANCE TO THE SOCIO-ECONOMICALLY WE AKER SECTIONS OF THE SOCIETY AND ALSO TO ALLEVIATE POVERTY BESIDE COLLECTING THE INTEREST ON THE ADVANCEMENT LOAN. MOREOVER, THIS FUND WAS ADVANCED FOR A SHORTER PERIOD AND THE ASSESSEE HAS ALSO EARNED AN INTEREST THEREON WHICH WAS UTILIZED IN MICRO FINANCING ACTIV ITY TO THE POOR PEOPLE. 3) ADIT (E) VS. BHARATHA SWAMUKHI SAMSTHE [2009]28 DTR 13 (BANGALORE TRIBUNAL) IT WAS HELD THAT THE WORK OF LENDING MONEY TO POOR WOM EN FOR INCOME GENERATING ACTIVITIES WAS CHARITABLE IN NATURE AS THERE WAS NOTHING ON RE CORD TO SHOW THAT THE INTEREST CHARGED BY THE ASSESSEE WAS EXORBITANT. THE FOLLOWI NG EXTRACT FROM THE CASE IS CRUCIAL TO UNDERSTAND THE STATUTORY AND JUDICIAL INTERPRETATIO NS IN THE REGARD: IT IS NOT IN DISPUTE THAT THE ASSESSEE'S WORK IS LE NDING MONEY TO THE POOR WOMEN FOR INCOME GENERATING ACTIVITIES. THE LOAN GIVEN TO PRO JECT MEMBERS ARE BORROWED FROM BANK; THE BENEFICIARIES ARE POOR FAMILIES. IF HE WO MEN IN THE ASSESSEE'S PROJECT HAVE TO BORROW MONEY FROM. THE MONEY LENDERS THEY HAVE TO P AY MANY TIMES HIGHER INTEREST THAN WHAT THE ASSESSEE HAS CHARGED. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE INCURS FINANCIAL COSTS FOR OBTAINING LOANS FROM BANKS. THE ASSESSES ALSO HAVE TO MAKE PAYMENT TOWARDS SALARIES AND OTHER ADMINISTRATIVE ACTIVITIE S OF THE TRUST. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE ASSETS AND INCOME OF THE TRUST WERE AVAILABLE FOR THE PERSONAL BENEFIT OF THE TRUSTEE AND THE BOARD MEMBERS. THESE ARE ONLY USED FOR MICRO CREDIT TO POOR WOMEN FOR THEIR POVERTY ALLEVIATION AND FOR TH E BENEFIT OF THE SOCIO-ECONOMICALLY WEAKER SECTIONS OF THE SOCIETY. IT IS WELL SETTLED THAT WHEN A PROFIT IS USED TOWAR DS THE ACHIEVEMENT OF THE CHARITABLE OBJECTS OF THE TRUST, IT WOULD BE CONSIDERED AS CHA RITABLE ACTIVITIES OF THE SAMITY NOTWITHSTANDING THE PROFIT AND GAIN INVOLVED THEREI N. IN THIS RESPECT, A REFERENCE MAY BE MADE TO THE DECISION OF HEN' BLE SUPREME COURT IN T HE CASE OF ASSTT. CIT VS. THANTHI TRUST (2001) 247 ITR 785 (SQ. THUS, MERE BECAUSE TH ERE WAS A SURPLUS FROM THE ACTIVITY OF MICRO FINANCING, THAT BY ITSELF, CANNOT BE A GRO UND TO SAY THAT THE ASSESSEE DOES NOT EXIST FOR CHARITABLE PURPOSE PARTICULARLY WHEN UNDE R MEMORANDUM OF ASSOCIATION AND 4 ITA NO. 2826/KOL/2013 ARTICLES OF ASSOCIATION, IT HAS BEEN CLEARLY PROVID ED THAT THE PROFIT SHALL NOT BE DISTRIBUTED AMONGST THE MEMBERS BUT SHALL BE UTILIZED TOWARDS I TS OBJECTS. 4) BUSINESS ACTIVITIES INVOLVING POOR & BENEFICIARI ES THE SUPREME COURT IN CASE THIAGARAIAR CHARITIES V A CIT (1997) 092 TAXMAN 152 (SC) HAS HELD THAT BUSINESS INVOLVING THE POOR BENE FICIARIES CANNOT BE SAID AS BUSINESS OR ACTIVITY FOR PROFIT. BUSINESS ACTIVITY INVOLVING THE BENEFICIARIES AND D ONE ONLY WITH THE MOTIVE OF PROVIDING RELIEF TO THE POOR, CAN BE CONSIDERED AS BUSINESS A T ALL. IT MAY FURTHER BE NOTED THAT MICRO FINANCE AS AN IN CIDENTAL BUSINESS ACTIVITY AND A CHARITABLE ACTIVITY ARE TWO DIFFERENT ISSUES. AN NG O SHALL BE EXEMPTED ONLY IF IT IS ENGAGED IN MICROFINANCE AS A CHARITABLE ACTIVITY. I F AN NGO IS ENGAGED IN MICROFINANCE AS AN INCIDENTAL BUSINESS ACTIVITY, THEN IT WILL BE SU BJECTED TO THE RECENT AMENDMENTS TO SECTION 2 (15) AND SUCH MICROFINANCE ACTIVITY SHOUL D BE ONLY A SMALL PORTION OF ITS OVERALL ACTIVITIES. FROM THE ABOVE CLARIFICATION AND FROM THE RECENT IN COME TAX CASES, IT IS CLEARLY STATED THAT THE MICROFINANCE ACTIVITIES OF THE ASSESSEE IS A CHARITABLE ACTIVITIES AND SURPLUS EARNED IS EXEMPTED U/ S.1I OF THE ACT AND THE ASSES SEE HAS NOT LOST THE STATUS OF CHARITABLE ORGANIZATION. SO NO QUESTION OF CHARGING OF TAX ON THE SURPLUS OF THE MICROFINANCE ACTIVITIES IS ARISE. THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNT S WHICH HAVE BEEN AUDITED REGULARLY. AS PER SCHEDULE 15 OF THE AUDITED STATEMENT OF ACCO UNTS, THE EXPENDITURE WAS FINANCIAL EXPENSES THAT IS INTEREST ON BORROWINGS WHICH HAVE BEEN CHARGED BY UBI, UTI, SIDBL SBI, NABARD & CARE AND WERE REFLECTED IN THE BANK S TATEMENT. THE TOTAL AMOUNT WAS RS.L,10,17,453.52. IN ADDITION, IN TEREST PAID ON MEMBERS SAVINGS WAS RS.5,06,398.00 & OTHERS WERE BANK CHARGES & CLIENT INCENTIVE. 6. THE AO, HOWEVER, TAKING INTO CONSIDERATION THE A MENDMENT TO SECTION 2(15) OF THE ACT, WHICH CAME INTO FORCE FRO M A.Y 2009-10, APPLICABLE TO THE YEAR UNDER CONSIDERATION HELD THA T THE MONEY LENDING BUSINESS AND EARNING INTEREST THEREON IS AN INCOME AND FACTS IN THE ADVANCEMENT OF ANY OTHER OBJECT GENERAL PUBL IC UTILITY AND IT SHALL NOT BE A CHARITABLE PURPOSE AND ADDED THE EXC ESS INCOME OVER EXPENDITURE UNDER HEAD MICRO FINANCE/MONEY LENDING TO AN EXTENT OF RS.71,68,803/- TO THE TOTAL INCOME OF THE ASSESSEE. 7. AGGRIEVED, THE ASSESSEE CHALLENGED THE ASSESSMEN T ORDER IN RESPECT OF ADDITION MADE ON ACCOUNT OF INTEREST INC OME BEFORE THE CIT-A. BEFORE HIM THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE AO. THE CIT-A OPINED THAT THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE CASE IN JANALA KSHMI SOCIAL SERVICES VS. DIRECTOR OF INCOME-TAX (EXEMPTION) OF BANGALORE TRIBUNAL REPORTED IN 33SOT 197(BANG) AND HELD THAT LOANS HAVE BEEN RAISED IN COMMERCIAL LINES AND PROFIT IS GENERATED BY FINANCING SMALL 5 ITA NO. 2826/KOL/2013 HELP GROUPS AT HIGHER RATES AND INTEREST EARNED ON COMMERCIAL LINES AND CONFIRMED THE ORDER OF THE AO. RELEVANT FINDING OF THE CIT-A IS REPRODUCED HEREIN BELOW:- 4.2 IN THE CASE OF THE APPELLANT ALSO THE BORROWI NG IS NOT MADE DIRECTLY TO THE BENEFICIARIES. IN FACT FINANCING IS DONE TO VARIOUS SHG'S. HERE ALSO NO ASSISTANCE OR GRANT HAS BEEN RECEIVED FOR MICRO FINANCING. THE LOANS HA VE BEEN RAISED ON COMMERCIAL LINES. PROFIT IS GENERATED BY FINANCING THE SHG'S AT A HIG HER RATE. THEREFORE THE MICRO FINANCING BUSINESS IS RUN ON COMMERCIAL LINES. APPELLANTS REL IANCE ON DISHA INDIA MICRO CREDIT VS. CLT, MUZAFFARNAGAR ITA NO. 1374/DE1L2010 AND OTHER CASES IS MISPLACED. IN THOSE CASES THE ISSUE WAS WHETHER REGISTRATION U /S. 12A WAS TO BE GRANTED. SECONDLY IN THOSE CASE THE FINANCING WAS DONE DIREC TLY TO THE POOR BENEFICIARIES AND NOT SHG. IN FACT THE HON'BLE IT A T IN THE CASE OF DISH A INDIA MICRO CREDIT VS CIT (SUPRA),IN ITS ORDER WHILE DISTINGUISHING THE CASE ON FACTS FR OM JANALAKSHMI SOCIAL SERVICES VS. DIT(EXEMPTION) HAD STATED THE SAME. THE RELEVANT PO RTION FROM THE ORDER IS QUOTED AS UNDER :- 'WE HAVE CAREFULLY PERUSED THE AFORESAID DECISION I N THE CASE OF JANALAKSHMI SOCIAL SERVICES (SUPRA). IN THIS CASE, WE FIND THAT THE ASSESSEE WAS PROVIDING FINANCE TO A PARTICULAR SECTION OF SOCIETY I. E. TR ADERS DEALING IN VEGETABLES AND FRUITS, AND MAKING PURCHASES FROM SAFAL. THE ASSESS EE WAS AVAILING OF LOAN FACILITY FROM BANKS/FINANCIAL INSTITUTION AT INTERE ST RATES RANGING FROM 8.5 PER CENT TO 9 PER CENT AND SUCH LOAN FACILITY WAS EXTEN DED TO SO CALLED POOR PEOPLE IN URBAN AREAS AT RATES RANGING BETWEEN 18% TO 24% PER ANNUM IN ADDITION TO BURDEN OF PROCESSING AND SERVICE CHARGES BETWEEN 1 TO 2 PER CENT. IT WAS ALSO FOUND IN THAT CASE THAT THE ASSESSEE COMPANY WAS NO T REACHING TO INDIVIDUAL BENEFICIARIES DIRECTLY BUT WAS DOING SO THROUGH NGO S AND SHGS FROM WHOM IT CHARGES HIGH INTEREST RATE. IT WAS THUS, HELD THAT THE ASSESSEE WAS UNDERTAKING ONLY BUSINESS OF MICRO FINANCING AND HAD NOT DONE A NY ACTIVITY TO SHOW THAT IT HAD BEEN DONE AS A CHARITABLE ACT. THIS CASE IS TOT ALLY DISTINGUISHABLE ON FACTS FROM THE FACTS OF THE PRESENT CASE. IN THE PRESENT CASE, IT IS NOT A CASE, WHERE THE ASSESSEE HAS BEEN PROVIDING FINANCE TO A PARTIC ULAR SECTION OF THE SOCIETY. THE PRESENT CASE IS NOT A CASE, WHERE THE ASSESSEE HAS BEEN PROVIDING LOAN TO INDIVIDUAL BENEFICIARIES NOT DIRECTLY BUT THROUGH S OME MEDIATOR. ' 4.3 IN VIEW OF THE ABOVE DISCUSSION THE A.O. HAD C ORRECTLY CONCLUDED THAT APPELLANT HAD CARRIED OUT THE MICRO FINANCING ON COMMERCIAL L INES. THEREFORE, IT IS NOT COVERED UNDER THE DEFINITION OF 'CHARITABLE PURPOSE', AS AP PLICABLE FOR THE CURRENT YEAR. FURTHER, AS HAS BEEN STATED IN THE PROVISIONS OF SE CTION 2( 15), THE NATURE OF ACTIVITY HAS TO BE EXAMINED, WHETHER IT IS FOR CHAR ITABLE PURPOSE OR NOT, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. SO, THE A.O. HAD CORRECTLY CONCLUDED THAT THE PROFIT MADE F ROM THE MICRO FINANCING ACTIVITY IS NOT EXEMPT AS PER SECTION 11 OF THE I.T. ACT. 4.4 FURTHER THE PROVISIONS OF AMENDED SECTION 2 (15) HAS BEEN CLARIFIED IN A CIRCULAR, STATING THE CONDITIONS TO BE FULFILLED. ACCORDINGLY, AS HAS BEEN STATED IN THE CIRCULAR NO. 11 OF2008 DATED 19.12.2008:- '2. THE FOLLOWING IMPLICATIONS ARISE FROM THIS AMEN DMENT- 2.1 THE NEWLY INSERTED PROVISO TO SECTION 2(15) WIL L NOT APPLY IN RESPECT OF THE FIRST THREE LIMBS OF SECTION 2(1.5), I.E. RELIEF OF THE POOR, E DUCATION OR MEDICAL RELIEF CONSEQUENTLY, WHERE THE PURPOSE OF A TRUST OR INSTITUTION IS RELI EF OF THE POOR, EDUCATION OR MEDICAL RELIEF, IT WILL CONSTITUTE 'CHARITABLE PURPOSE' EVE N IF IT INCIDENTALLY INVOLVES THE CARRYING ON OF COMMERCIAL ACTIVITIES. 2.2 'RELIEF OF THE POOR' ENCOMPASSES A WIDE RANGE O F OBJECTS FOR THE WELFARE OF THE ECONOMICALLY AND SOCIALLY DISADVANTAGED OR NEEDY. I T WILL, THEREFORE, INCLUDE WITHIN ITS AMBIT PURPOSES SUCH AS RELIEF TO DESTITUTE, ORPHANS OR THE HANDICAPPED, DISADVANTAGED WOMEN OR CHILDREN, SMALL AND MARGINAL FARMERS, INDI GENT ARTISANS OR SENIOR CITIZENS IN NEED OF AID. ENTITIES WHO HAVE THESE OBJECTS WILL C ONTINUE TO BE ELIGIBLE FOR EXEMPTION EVEN IF THEY INCIDENTALLY CARRY ON A COMMERCIAL ACT IVITY, SUBJECT, HOWEVER, TO THE CONDITIONS STIPULATED UNDER SECTION 11 (4A) OR THE SEVENTH PROVISO TO SECTION 10(23C) WHICH ARE THAT- (I) THE BUSINESS SHOULD BE INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE ENTITY, AND (II) SEPARATE BOOKS OF ACCOUNT SHOULD B E MAINTAINED IN RESPECT OF SUCH BUSINESS. 6 ITA NO. 2826/KOL/2013 SIMILARLY, ENTITIES WHOSE OBJECT IS 'EDUCATION' OR 'MEDICAL RELIEF' WOULD ALSO CONTINUE TO BE ELIGIBLE FOR EXEMPTION AS CHARITABLE INSTITUTION S EVEN IF THEY INCIDENTALLY CARRY ON A COMMERCIAL ACTIVITY SUBJECT TO THE CONDITIONS MENTI ONED ABOVE. ' THUS TO BE COVERED UNDER THE DEFINITION OF RELIEF T O POOR, THE MICRO-FINANCING SHOULD BE INCIDENTAL TO THE ATTAINMENT OF THE OBJEC TIVES OF THE ENTITY. IN THIS CASE AS SEEN FROM THE AUDITED ACCOUNTS, MICRO FINANCING IS THE PREDOMINANT ACTIVITY. 8. BEFORE US THE LD.AR SUBMITS THAT THE ASSESSEE I S A CHARITABLE INSTITUTION AND CONDUCTING ITS BUSINESS IN PROVIDIN G LOANS TO WEAKER SECTIONS. WITHOUT CONSIDERING THE SAME, THE AO ARBI TRARILY DENIED THE ALLOWANCES IN VIEW OF AMENDMENT TO SECTION 2(15) OF THE ACT. HE FURTHER SUBMITS THAT THE ASSESSEE WAS REGISTERED UN DER THE SOCIETYS REGISTRATION ACT IN THE YEAR 1972 AND THE ASSESSEE WAS GRANTED REGISTRATION U/S. 12A OF THE ACT. SINCE THEN THE AS SESSEE WAS ENGAGED IN CHARITABLE ACTIVITIES WHICH INCLUDES RELIEF OF T HE POOR, EDUCATION, MEDICAL RELIEF AND OTHER OBJECT OF GENERAL PUBLIC U TILITY WITH THE OWN FINANCE I.E. DONATIONS AND GRANTS RECEIVED FOREIGN CONTRIBUTION AND GOVT. OF INDIA. THE LD. AR SUBMITS THAT THE ASSESSE E INTRODUCED SELF HELP GROUP (SHG) AS A CORNER STONE OF DEVELOPMENT, PARTICULARLY WOMEN EMPOWERMENT AND PROMOTED LARGE NUMBER OF SMAL L HELP GROUPS (SHG) UNDER THE FACILITATION OF NABARD & CAR E AND LINKED THEM WITH LOCAL BANKS. 9. SINCE 2000-01 THE ASSESSEE STARTED LENDING TO TH E SMALL FAMILY GROUP(SHG) FOR THE PURPOSE OF ON LENDING TO THEIR M EMBERS WHO ARE IN NEED OF CAPITAL FOR INCOME GENERATING ACTIVITIES WITH THE AIM TO RAISE FAMILY INCOME ABOVE SUBSISTENCE LEVEL. THE AS SESSEE STARTED MICROFINANCE FOR ECONOMIC SELF RELIANCE AND EMPOWER MENT OF THE POOR SO THAT THEY BECOME OUT OF POVERTY IN COURSE OF TIM E. THE ASSESSEE ACTED AS AN INTERMEDIARY BETWEEN BANK AND THE POOR TO FULFILL ITS SOCIAL AGENDA BY UPLIFTING THE SOCIO- ECONOMIC COND ITION OF THE POOR AND THE ASSESSEE HAD NO PROFIT MAKING GOAL OUT OF T HESE ACTIVITIES. 10. THE LD.AR SUBMITS THAT THE MOTO OF THE ASSESS EE IS LIVE AND LET LIVE AND ENVISIONS A SOCIETY WHERE NOBODY EXPL OITS OR FEELS 7 ITA NO. 2826/KOL/2013 EXPLOITED AND THE MISSION IS HOLISTIC DEVELOPMENT B Y ACTING LOCALLY, THINKING GLOBALLY. THE ASSESSEE CHOSEN THE WAY OF FINANCING TO THE MEMBERS OF THE GROUPS DIRECTLY TO KEEP TRACK ON THE INDIVIDUAL LOANEE/BORROWER AND THEIR REPAYMENT HABIT. IN SUPPO RT OF WHICH, HE REFERRED TO PARAS 11, 12 & 13 OF THE WRITTEN SUBMIS SIONS AND FURTHER ARGUED THAT THE ASSESSEE DISBURSED THE LOANS ON SPE CIFIC ELIGIBILITY CRITERIA. THE ASSESSEE FIXED THE RATE OF INTEREST O F LENDING ON THE BASIS OF RBI GUIDELINES BETWEEN THE MARGIN OF LENDING AN D COST OF FUND THAT DOES NOT EXCEED 12% P.A. AND MUST NOT EXCEED 2 6% P.A OF THE POORER. THE LD.AR OF THE ASSESSEE ALSO REFERRED TO PARAS 18-26 OF THE WRITTEN SUBMISSION BASING ON THE PROCEDURES CONTEMP LATED THEREIN THE ASSESSEE DISBURSED SMALL AMOUNT OF LOAN OF RS.5 ,000/- TO RS. 15,000/- TO THE POOR WOMEN OF THE SAID 11 BRANCHES OF NADIA DISTRICT. THE LD.AR ALSO SUBMITS THAT BECAUSE OF HIGHER INTER EST IS CHARGED, THEN THE ACTIVITIES OF THE ASSESSEE CANNOT BE HELD UNCHARITABLE BECAUSE THE COST OF RECOVERY IS VERY HIGH AND THE P OSSIBILITY OF BAD DEBT IS ALSO HIGH. THE FUNDS ARE GIVEN WITHOUT ANY SURETY OR GUARANTEE. 11. THE LD. AR SUBMITS THAT THE PROVISO TO SECTION 2(15) OF THE ACT DOES NOT APPLY IN RESPECT OF FIRST THREE LIMBS OF S ECTION 2(15), WHERE THE PURPOSE OF THE TRUST/INSTITUTION IS RELIEF OF T HE POOR, EDUCATION OR MEDICAL RELIEF IT WILL CONSTITUTE CHARITABLE PURPO SE EVEN IF IT INCIDENTALLY INVOLVES THE CARRYING ON OF COMMERCIAL ACTIVITIES AS PER CBDT CIRCULAR NO.11/2008 DT. 19-12-08. THE CIT-A F AILED TO UNDERSTAND THE RESTRICTION OF THE AMOUNT OF RS. 10, 00,000/- IN RELATION OF THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE LD.AR ARGUED THAT THE CLAIM OF THE AS SESSEE HAVING CHARITABLE ACTIVITIES WAS DENIED COMPLETELY AS BAD IN LAW AND VOID AN INITIO AND THE REGISTRATION U/S. 12AA OF THE ACT IS IN OPERATION AND SHOULD BE TREATED AS A SOCIETY HAVING CHARITABLE AC TIVITY LIKE RELIEF OF THE POOR AND THE EXPENSES TOWARD CHARITABLE ACTIVIT IES SHOULD BE 8 ITA NO. 2826/KOL/2013 CONSIDERED AND ALLOWED AS APPLICATION OF INCOME TOW ARDS CHARITABLE ACTIVITIES AND PLACED HIS RELIANCE. IN SUPPORT OF T HE CONTENTION, HE RELIED ON THE ORDER OF VISAKHAPATNAM TRIBUNAL IN TH E CASE OF SPANDANA (RURAL & URBAN DEVELOPMENT ORGANISATION) V S. ACIT REPORTED IN (2010) 40 DTE 153 (VISKHA-TRIB) AND ARG UED THAT MICRO FINANCE ACTIVITY IS A CHARITABLE ACTIVITY AND SOCIO -ECONOMICALLY WEAKER SECTIONS OF THE SOCIETY. HE FURTHER SUBMITS THAT TH E AO HAS NO POWER TO DENY THE RIGHT OF CLAIM OF EXEMPTION U/S. 11 OF THE ACT, IN VIEW OF THE FACT THAT THE ASSESSEE TRUST OBTAINED REGISTRAT ION U/S. 12AA OF THE ACT AND INCOME OF THE ASSESSEE SHOULD BE TREATED/DE TERMINED AS NIL. 12. THE LD.AR OF THE ASSESSEE PLACED HIS RELIANCE O N THE ORDER OF THE BANGALORE TRIBUNAL IN THE CASE OF ADIT(E) VS. B HARATHA SWAMUKHI SAMASTHE REPORTED IN (2009) 28 DTR 13 (BANGALORE-TR IB) AND ARGUED THAT WORK OF LENDING MONEY TO POOR WOMEN FOR INCOME GENERATING ACTIVITIES WAS CHARITABLE IN NATURE. 13. THE LD.AR OF THE ASSESSEE FURTHER PLACED HIS RE LIANCE ON THE ORDER OF THE MADHYA PRADESH HIGH COURT IN THE CASE OF MADHYA PRADESH MADHYAM VS. CIT REPORTED IN (2002) 256 ITR 277/125 TAXMAN 382(MP) AND ARGUED THAT INCOME-TAX AUTHORITI ES ARE BOUND BY REGISTRATION, ONCE THEY HAVE REGISTERED AN INSTI TUTION AS CHARITABLE ONE, THEY CANNOT GO BEHIND THE REGISTRATION IN ASSE SSMENT PROCEEDINGS, UNLESS IT IS CONCLUSIVELY SETTLED THA T THE SAID ORGANIZATION IS ENGAGED IN THE BUSINESS ACTIVITIES. 14. IN THE CASE OF SURAT CITY GYMKHANA REPORTED IN (2008) 300 ITR 214/170 TAXMAN 612 (SC), THE LD.AR ARGUED THE SUPRE ME COURT HELD THAT ONCE REGISTRATION IS PROVIDED THEN THE AO CANN OT PROBE INTO THE OBJECTS OF THE SOCIETY. 9 ITA NO. 2826/KOL/2013 15. IN THE CASE OF HIRALAL BHAGWATI REPORTED IN (20 00) 246 ITR 188(GUJ), THE LD.AR ARGUED THAT ONCE THE REGISTRATI ON U/S. 12A(A) WAS GRANTED, THE GRANT OF BENEFIT/EXEMPTIONS COULD NOT BE DENIED. 16. IN THE CASE OF U.P FOREST CORPRN REPORTED IN (2 008) 297 ITR 1/165 TAXMAN 533(SC), LD. AR ARGUED THAT THE HONBL E SC HELD THAT ONCE AN ORDER OF REGISTRATION U/S. 12AA IS PASSED B Y THE CIT, THE ENTIRE INCOME OF THE TRUST BECOMES EXEMPT UNDER THE PROVISIONS OF SECTIONS 11 AND 12 OF THE ACT, BECAUSE REGISTRATION OF A TRUST IS A CONDITION PRECEDENT FOR CLAIMING BENEFIT U/S. 11(1) (A) OF THE ACT. 17. THE LD.AR OF THE ASSESSEE PLACING HIS RELIANCE IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY VS. DCIT (EXE MPTION) REPORTED IN (2011) 335 ITR 575/ (2010) 233 CTR 407 (2010) 40 DTR 76 (GUJ-HC) ARGUED THAT IF THE 12A REGISTRATION WAS NOT WITHDRAWN ON THE DATE OF ASSESSMENT ORDER THEN THE INCOME OF THE ASSESSEE WAS EXEMPT IN ENTIRETY. 18. THE LD.AR OF THE ASSESSEE FURTHER RELIED ON PRO POSITION OF RULE OF CONSISTENCY OF THE HONBLE SUPREME COURT IN THE CAS E OF RADHASOAMI SATSANG VS. CIT REPORTED IN (1992) 193 ITR 321 (SC) . 19. IN THE CASE OF SHREE RAM MEMORIAL FOUNDATION OF DELHI HIGH COURT REPORTED IN (1985) 158 ITR 3, HELD THAT WHEN A PARTICULAR CHARITY WAS RECOGNIZED AS SUCH FOR SEVERAL YEARS A ND WAS CARRYING ON THE SAME OBJECT WITHOUT ANY PROTEST. 20. IN VIEW OF ABOVE, THE LD.AR OF THE ASSESSEE PRA YED THAT THE PRINCIPLES LAID DOWN BY THE HONBLE SC/HIGH COURTS IN THE CASES OF SUPRA ABOVE THE DETERMINING THE INCOME TO THE TUNE OF RS.59,05,970/- SHOULD BE DELETED IN FULL BY APPLICA TION OF EXEMPTION U/S. 11 OF THE ACT. 10 ITA NO. 2826/KOL/2013 21. ON THE OTHER HAND, THE LD.DR SUBMITS THAT THE A SSESSEE IS NOT GIVING LOANS DIRECTLY TO THE BENEFICIARIES AND THE AO FOUND LENDING OF FINANCES TO SELF HELP GROUP WAS A PRE-DOMINANT ACTI VITY AND TAKING ADVANTAGE OF THE POOR FAMILIES THE ASSESSEE CHARGED INTEREST @ 24%. THE CIT-A HAS RIGHTLY HELD THAT IT IS A COMMERCIAL ACTIVITY. THE LD.DR RELIED ON THE ORDERS OF THE AO & CIT-A. 22. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD AND CONSIDERED THE WRITTEN SUBMISSION. WE FIND THAT THE ASSESSEE D ECLARED IN ITS AUDITED ACCOUNTS EXCESS INCOME OVER EXPENDITURE, BU T BEING CHARITABLE INSTITUTION NOT OFFERED THE SAME TO TAX. THE AO SHOW CAUSED THE ASSESSEE BY FINDING THAT THE ASSESSEE EA RNED INTEREST INCOME ON MONEY LENDING TO SMALL HELP GROUP, WHICH IS NOT OBJECT OF THE ASSESSEE TRUST AND WHY THE SAID INCOME SHOULD N OT BE TREATED AS INCOME OF THE ASSESSEE TRUST AND TAKING INTO CONSID ERATION THE SUBMISSIONS OF THE ASSESSEE AND THE AMENDMENT EFFEC TED TO SECTION 2(15) OF THE ACT THE AO ADDED THE SAID INCOME TO TH E TOTAL INCOME OF THE ASSESSEE. WE NOTE THAT THE ASSESSEE IS A CHARIT ABLE INSTITUTION AND EXEMPTIONS CLAIMED BY IT ARE AVAILABLE ON CERTA IN CONDITIONS. THE CHARITABLE PURPOSES ARE DEFINED U/S. 2(15) OF THE A CT, WHERE THE SECTION STATES EXEMPTION CAN BE GRANTED TO THE INST ITUTIONS, WHICH ARE INVOLVED IN CHARITABLE PURPOSES VIZ. RELIEF TO POOR , EDUCATION, MEDICAL RELIEF AND ADVANCEMENT OF ANY OBJECT OF GENERAL PUB LIC UTILITY. BUT, HOWEVER, AN AMENDMENT CAME INTO FORCE BY THE FINANC E ACT 2008, WHEREIN PROVISO WAS ADDED TO SECTION 2(15) STATES T HAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY SHALL NOT BE CHARITABLE PURPOSE IF IT INVOLVES CARRYING ON ANY A CTIVITY IN THE NATURE, TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF REN DERING IN SERVICES IN RELATION TO TRADE, COMMERCE OR BUSINESS. THEREF ORE, THE EXEMPTION IS NOT AVAILABLE IN VIEW OF ADDING OF PROVISO TO SE CTION 15 PARTICULARLY THE 4 TH LIMBS DEFINITION OF THE CHARITABLE PURPOSE. WE FIN D THAT THE 11 ITA NO. 2826/KOL/2013 ASSESSEE DID NOT LEND LOANS TO BENEFICIARIES DIRECT LY AS IT WAS ADVANCED TO VARIOUS SELF HELP GROUPS. THE SAID LOAN S ALSO RAISED ON COMMERCIAL LINES AND THE PROFIT WAS BEING GENERATE D BY LEVYING HIGHER RATE OF INTEREST AND CIT-A BY DISTINGUISHING THE CASE LAWS HELD THAT THE SAID MICRO FINANCING AS CONDUCTED BY THE ASSESSEE WAS ON COMMERCIAL LINES AND CONFIRMED THE ORDER OF THE AO DENYING THE EXEMPTION IN VIEW OF ADDING PROVISO TO SECTION 2(15 ) OF THE ACT. THE CIT-A ALSO DISCUSSED AND DISTINGUISHED THE DECISION S IN THE CASE OF DISHA INDIA MICRO CREDIT OF DELHI TRIBUNAL WITH THA T OF JANALAKSHMI SOCIAL SERVICES AND HELD THAT THE FACTS OF JANALAK SHMI SOCIAL SERVICES ARE CLEARLY APPLICABLE TO THE CASE OF HAND AND HELD THAT THE ASSESSEE UNDERTAKEN ONLY BUSINESS OF MICRO FINANCING AND HAD NOT DONE ANY ACTIVITY TO SHOW THAT IT HAD BEEN DONE AS CHARITABL E ACT. 23. BEFORE US THE LD.AR PLACED HIS RELIANCE ON THE DECISIONS OF VARIOUS HIGH COURTS AND SUPREME COURT AND ARGUED TH AT THE AO HAS NO POWER TO DENY THE EXEMPTION AS REGISTRATION U/S 12AA IS IN FORCE. WE FIND THAT THE REGISTRATION U/S. 12AA IS GRANTED SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS CONTEMPLATED IN S ECTION 2(15) OF THE ACT. THEREFORE, WE ARE NOT IN AGREEMENT WITH THE AR GUMENTS OF THE LD.AR THAT THE AO HAS IGNORED THE REGISTRATION OF T HE ASSESSEE GRANTED U/S. 12AA OF THE ACT IN DENYING THE CLAIM O F EXEMPTION. THE LD.AR ALSO ARGUED THAT RULE OF CONSISTENCY SHOULD B E FOLLOWED BY PLACING HIS RELIANCE ON THE DECISION OF THE HONBLE SC IN THE CASE OF RADHA SWAMTY SATSANG SUPRA, WHICH HELD THAT THE AO SHOULD NOT INTERFERE WITH THE FUNDAMENTAL ASPECT PERMITTING TH ROUGH THE DIFFERENCE ASSESSMENT YEARS. IN OUR OPINION THAT PR IOR TO ADDING PROVISO TO SECTION 2(15), THE ENTITIES WHICH GOT RE GISTRATION U/S. 12AA ENGAGED IN COMMERCIAL ACTIVITY CLAIMED EXEMPTION ON THE GROUND THAT SUCH ACTIVITIES WERE FOR ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY IN TERMS OF 4 TH LIMB OF DEFINITION TO SECTION 2(15) OF THE ACT. WE FIND THAT THE SAID BENEFIT WAS TAKEN AWAY BY ADDING PROVISO TO SECTION 12 ITA NO. 2826/KOL/2013 2(15) OF THE ACT, WHEREIN IT EXPLAINS THAT THE ADVA NCEMENT OF ANY OTHER OBJECT, GENERAL PUBIC UTILITY SHALL NOT BE CH ARITABLE PURPOSE. IN OUR OPINION THAT THE AO AND THE CIT-A OPINED THAT T HE ASSESSEE CONDUCTED ITS ACTIVITIES ON COMMERCIAL LINE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. THEREFORE, THEY RIGHTLY DENI ED THE EXEMPTION BY FOLLOWING STATUTORY PROVISIONS. WE DO NOT FIND A NY INFIRMITY IN THE IMPUGNED ORDER OF THE CIT-A. WE FIND THAT THE RATIO LAID DOWN BY THE DECISIONS AS RELIED UPON BY THE LD.AR ARE NOT APPL ICABLE TO THE FACTS OF THIS CASE. WE UPHOLD THE SAME. THIS ISSUE OF THE ASSESSEE IS DISMISSED. 24. REGARDING THE CLAIM OF PROVISION FOR BAD & DOUB TFUL DEBTS, THE AO DENIED THE CLAIM OF THE ASSESSEE FOR A SUM OF RS .38,27,197/- AS IS NOT DEDUCTIBLE. THE CIT-A OBSERVED IN HIS ORDER TH AT THE ASSESSEE FAILED TO FULFILL THE CONDITIONS CONTEMPLATED U/S. 36(2) OF THE ACT. 25. WE FIND THAT THE ASSESSEE HAS SHOWN OTHER RECEI PTS OF RS.70,49,240/- WHICH INCLUDES PROVISION FOR BAD AND DOUBTFUL DEBT OF LAST YEAR (SCHEDULE 11 & 14) OF RS.53,60,345/-. THE ASSESSEE IN ITS WRITTEN SUBMISSION STATED THAT COST OF RECOVERY IS VERY HIGH AND THE POSSIBILITY OF BAD DEBT IS ALSO HIGH AS THE LOANS W ERE ADVANCED WITHOUT ANY SURETY OR GUARANTEE. WE FIND FROM THE RECORD THAT THE ASSESSEE HAS SHOWN A PROVISION OF BAD AND DOUBTFUL DEBT IN THE LAST YEAR FOR A SUM OF RS.53,61,345/-, WHICH IS MORE TH AN THE AMOUNT IN THE YEAR UNDER CONSIDERATION AND THE AO HAS ALREADY DEDUCTED THE SAME WHILE COMPUTING THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE, THEREFORE, CANNOT BE SAID TO HAVE ANY GRIEVANCE OF THE ASSESSEE ON THIS ISSUE. 26. GROUND NO. 6 IS RELATING TO AN ADDITION OF RS.2 ,15,548/- AND RS.29,077/- ON ACCOUNT OF FOREIGN GRANT AND LOCAL G RANT RESPECTIVELY. THE LD.AR DID NOT PUT FORTH ANY ARGUMENTS ON THIS I SSUE. WE FIND NO 13 ITA NO. 2826/KOL/2013 SUBMISSIONS WERE MADE IN WRITTEN SUBMISSION. THEREF ORE, GROUND NO. 6 IS DISMISSED. 27. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-10-2017 SD/- SD/- P.M. JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :13-10-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SREEMA MAHILA SAMITY C/O P.S GUPTA (ADV OCATE), 100, BANK LANE, HATAR PARA, P.O KRISHNAGAR, DIST: N ADIA, PIN 741101. 2 RESPONDENT THE DCIT, CIR-NADIA, P.O KRISHNAGAR, D IST: NADIA, PIN 741101. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT, KOLKATA