The ADIT(Exemp.), Sabarkantha V. Gitanjali Trust, Sabarkantha

ITA 2864/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0087 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 08-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A C SHAH
• Keywords: Unexplained cash credit; Charitable institution; Source of fund; Additional evidence; Reasonable cause
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2864/AHD/2013 / ASSTT. YEAR: 2009-2010 ASSTT. DIRECTOR OF IT(EXEMPTION) SABARKANTHA, HIMATNAGAR. VS GITANJALI TRUST DESAI NAGAR, NR. POST OFFICE AT. PO TALOD DIST. SABARKANTHA PAN : AAATG 2528 H ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI A. C. SHAH, AR REVENUE BY : SHRI MUDIT NAGPAL, SR.DR / DATE OF HEARING : 08/11/2016 / DATE OF PRONOUNCEMENT: 09/11/2016 $%/ O R D E R REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF THE LD.CIT(A)-III, AHMEDABAD DATED 13.9.2013. 2. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: (I)(A) THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACT IN DELETING THE ADDITION OF RS.37,83,616/- MADE BY THE A.O. TREATING IT AS UNEXPLAINED AND ANONYMOUS DONATIONS, WITHOUT CONSIDERING THE APPLICATION OF FUNDS BY THE TRUST. (I)(B) DURING THE ASSESSMENT PROCEEDINGS NO DETAILS /SUBMISSIONS WERE GIVEN ON THE ISSUE UNDER CONSIDERATION AND HENCE AS SESSMENT ORDER WAS FRAMED U/S 144. THE CIT(A) WHILE ACCEPTING THE FR ESH/ADDITIONAL EVIDENCE SHOULD HAVE EXAMINED NOT ONLY THE SOURCE OF DONATIO N BUT ALSO THE APPLICATION OF THESE FUNDS BEFORE DELETING THE ENTI RE ADDITION. ITA NO.2864/AHD/2013 2 (II) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) MAY BE SET ASIDE AND THAT OF T HE ASSESSING OFFICER BE RESTORED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST AND RUNNING A PHARMACY COLLEGE AT TALOD, DIST. SABARKAN THA. WHILE SCRUTINIZING THE CASE OF THE ASSESSEE, THE LD.AO HAD ISSUED NOTI CE UNDER SECTION 142(1) ON 23.9.2010, WHICH WAS DULY SERVED UPON THE ASSESSEE. ACCORDING TO THE LD.AO, NUMBER OF NOTICES WERE SERVED UPON THE ASSESSEE, BU T REMAINED UN-COMPLIED WITH. THE LD.AO FOUND A DEPOSIT OF RS.37,83,616/- IN SAVING BANK ACCOUNT BEARING NO.08272 WITH SK DIST. CO-OP. BANK. THE LD .AO HAS MADE ADDITION OF THIS AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, THE ASSESSEE HAS FILED AN APPLICATION FOR PERMISSION TO FILE ADDITIONAL EVIDENCE. IT WAS CONTENDED IN THE APPLI CATION THAT MAIN TRUSTEE OF THE TRUST, SHRI KANUBHAI CHUNIBHAI PATEL WAS 85 YEA RS OF AGE, AND BECAUSE OF HIS INDIFFERENT HEALTH, THE NOTICE ISSUED COULD NOT BE COMPLIED WITH. THE LD.CIT(A) HAS ADMITTED ADDITIONAL EVIDENCE AND CALL ED FOR REMAND REPORT OF THE AO. REMAND REPORT SUBMITTED BY THE AO HAS REPR ODUCED BY THE LD.CIT(A) IN THE IMPUGNED ORDER AT PAGE NO.4. THE AO HAS SUBMITTED THAT HE HAS GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE, B UT THE ASSESSEE FAILED TO GIVE ANY EVIDENCE. THEREFORE, THE ASSESSEE SHOULD NOT B E PERMITTED TO PRODUCE ADDITIONAL EVIDENCE. THE LD.CIT(A) HAS ADMITTED AD DITIONAL EVIDENCE AND DECIDED THE APPEAL ON MERIT. EXPLANATION GIVEN BY THE ASSESSEE HAS REPRODUCED BY THE LD.CIT(A) IN PARA-9. THE EXPLANA TION OF THE ASSESSEE AND THE FINDING OF THE LD.CIT(A) ON THIS ISSUE READS AS UNDER: ITA NO.2864/AHD/2013 3 9. APPELLANT IN ITS WRITTEN SUBMISSION ARGUED THAT : 1. THE APPELLANT IS A CHARITABLE TRUST RUNNI NG A PHARMACY COLLAGE AT TALOD, DIST: SABARKANTHA. THE MAIN TRUSTEE OF TH E TRUST IS SHRI KANUBHAI CHUNIBHAI PATEL WHO IS OF 85 YEARS OLD. BE CAUSE OF HIS INDIFFERENT HEALTH, THE NOTICES ISSUED COULD NOT BE ' COMPLIED AND THEREFORE THERE IS A REASONABLE CAUSE FOR NON COMPL IANCE OF NOTICES. 2. THE LEARNED AO HAS PASSED EX PARTY ORDER. HE HAS CALLED FOR THE COPY OF BANK STATEMENT FROM S.K. DIST CO.OP. BANK L TD., TALOD BRANCH. THE CREDITS APPEARING IN THE BANK STATEMENT IS TREA TED AS INCOME OF THE TRUST. THE TOTAL ADDITION MADE IS RS. 37,83,616. 3. THE ADDITION MADE IS NOT PROPER. THE EXP LANATION FOR EACH DEPOSIT IS GIVEN BELOW: SR. NO. DATE AMOUNT RS. REMARKS 01 01-04- 2008 [OPENING BALANCE] 14,55,939 THE OPENING BALANCE CANNOT BE CONSIDERED AS UNEXPLAINED CREDIT. THE ADDITION CANNOT BE MADE. \ 02 15-05-2008 10,00,000 TRANSFER FROM GITANJALI PRIMARY TEACHER'S TRAINING COLLAGE. THE COPY OF BANK STATEMENT OF PTC COLLAGE IS ENCLOSED. 03 25-08-2008 5,62,500 THE AMOUNT REPRESENTS THE MATURITY OF OLD FDR. THE BANK CERTIFICATE TO THAT EFFECT IS ENCLOSED. 04 19-09-2008 13,946 INTEREST. 05 17-11-2008 5,00,000 TRANSFER FROM GITANJALI PRIMARY TEACHERS TRAINING COLLEGE. THE COPY OF BANK STATEMENT OF PTC COLLEGE IS ENCLOSED. 06 03-12-2008 89,000 THE AMOUNT REPRESENTS THE MATURITY OF FOLD FDR. THE BANK CERTIFICATE TO THAT EFFECT IS ENCLOSED. 07 22-12-2008 75,000 DONATION RECEIVED IN CASH FROM SEVERAL PERSONS 08 09-03-2008 75,000 DONATION RECEIVED IN CASH FROM SEVERAL PERSONS 09 20-03-2009 12,232 INTEREST. THE XEROX COPY OF BANK STATEMENT FROM S.K. DIST. CO . OP. BANK LTD. IS ENCLOSED. ITA NO.2864/AHD/2013 4 4. FROM THE ABOVE, IT MAY PLEASE BE SEEN THAT EACH ENTRY IS EXPLAINED AND THEREFORE THE QUESTION OF ANY ADDITION DOES NOT ARISE. 5. YOUR HONOUR IS THEREFORE PRAYED TO DELETE THE AD DITION AND ALLOW THE APPEAL. 10. FROM THE PERUSAL OF RECORDS, IT IS FOUND THAT A PPELLANT HAS EXPLAINED SOURCE OF VARIOUS DEPOSITS IN ITS BANK AC COUNT. NO FURTHER INQUIRY HAS BEEN CONDUCTED BY AO AND NO OTHER MATER IAL HAS BEEN BROUGHT ON RECORD BY HIM TO PROVE THAT EXPLANATION GIVEN BY APPELLANT REGARDING DEPOSITS IN BANK IS NOT SATISFACTORY. THE REFORE, THERE IS NO JUSTIFICATION FOR ADDITION OF RS. 37,83,616/- MADE BY AO AND THE SAME IS DIRECTED TO BE DELETED. GROUND NO. 2 OF APPEAL I S THUS ALLOWED. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD. IN MY OPINION, THE LD.CIT(A) HAS EXAMINED THE FACTS IN RIGHT PERSPECTIVE. THE ASSESSEE HAS EXPLAINED SOURCE OF FUNDS DEPOSITED IN THE ACCOUNT. THIS EXPLANATION IS DULY DISCERNIBLE FROM THE FINDING OF THE LD.CIT(A) EXTRACT SUPRA. THEREFORE, I FIND NO REAS ON TO INTERFERE IN THE ORDER OF THE LD.CIT(A). ACCORDINGLY, APPEAL OF THE REVEN UE IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 9 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 09/11/2016