The ACIT, Indore V. M/s Arihant Cheritable Trust, Indore

ITA 288/IND/2010

• Counselvise Citation: 28822714 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 11-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: S N AGARWAL
• Keywords: Depreciation; Charitable institution
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARMA, A.M. PAN NO. : AAAAA0654R I.T.A.NO. 288 / IND /20 10 A.Y. : 2003 - 04 ACIT, M/S.ARIHANT CHARITABLE TRUST, 3(1), VS INDORE. INDORE. AP PELLANT RESPONDENT APPELLANT BY : SHRI ARUN DEWAN, SR. DR RESPONDENT BY : SHRI S.N.AGARWAL, C. A. 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) - II, INDORE, DATED 9.2.2010 FOR THE ASS ESSMENT YEAR 200 3 - 04 , IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME - TAX ACT, 1961 . 2. FOLLOWING TWO GROUNDS HAVE BEEN TAKEN BY THE REVENUE: - - : 2 : - 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIREC TING THE AO TO CONSIDER THE DONATIONS CLAIMED TO HAVE BEEN RECEIVED IN CASH WITHOUT APPRECIATING THE FACTS AND THE ASSESSEE HAD FAILED TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE DONOR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW DEPRECIATION OF RS. 51,21,566/ - ON THE VARIOUS BLOCK OF ASSETS. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE TRUST WAS RUNNING A CHARITABLE HOSPITAL. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS IN RECEIPT OF DONATION OF RS. 2.35 CRORES, WHICH INCLUDES DONATION IN CASH OF RS. 47.97 LAKHS. THE AO HAS ACCEPTED GENUINENESS OF C ORPUS AND DONATION, WHICH W ERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES. THE DON ATION RECEIVED IN CASH WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND TAXED AS INCOME OF THE ASSESSEE TRUST. TO PROVE THE GENUINENESS OF THE DONATION, THE ASSESSEE - : 3 : - 3 HAS FURNISHED COMPLETE DETAILS INCLUDING NAME, RECEIPT NUMBER OF THE DONOR WITH THE AMOUNT OF DONATION. LETTERS FROM ALL THE DONORS EXPRESSING THEIR INTENTION TO MAKE DONATION TOWARDS CORPUS OF THE FUNDS DESTROYED IN THE FLOOD IN THE YEAR 2005, THEREFORE, THE SAME COULD NOT BE FILED AND THE ASSESSEE TRUST HAS FILED THE COPY OF FIR BEFORE THE AO. T HE AO DID NOT ACCEPT THE DONATION RECEIVED IN CASH, THEREFORE, MADE ADDITION. BY THE IMPUGNED ORDER, THE CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - CONSIDERING THE FACTS OF THE PRESENT CASE, FINDING OF THE AO AND SUBMISSIONS OF THE ASSESSEE ARE TAKEN INCONSIDERATION VERY CAREFULLY. THE ASSESSEE BEING A TRUST RUNNING A HOSPITAL IN THE NAME OF ARIHANT HOSPITAL & RESEARCH CENTRE, ENTIRE AMOUNT OF DONATION ON ACCOUNT OF CORPUS AS RECEIVED BY THE ASSESSEE TRUST WAS UTILIZED TOWARDS I TS OBJECTS I.E. TOWARDS PURCHASE OF MACHINERY & EQUIPMENT AND CONSTRUCTION OF HOSPITAL BUILDING. THE AO HIMSELF ACCEPTED THE DONATION RECEIVED IN CHEQUES AS GENUINE TOWARDS CORPUS BUT DONATION RECEIVED IN - : 4 : - 4 CASH TAXED AS INCOME OF THE ASSESSEE TRUST. TWO DIF FERENT STAND FOR SAME SET OF FACTS ARE NOT JUSTIFIABLE. THE APPELLANT HAD PROVIDED LIST OF DONOR AND RECEIPT NO. HOWEVER, DUE TO FLOO D , LETTER RECEIVED FROM THE DONOR EXPRESSING THEIR INTENTION WERE LOST FOR DONATION WHETHER RECEIVED INC ASH OR THROUGH AN ACCOUNT PAYEE CHEQUE. THE APPELLANT TRUST UTILIZED ENTIRE AMOUNT OF DONATION RECEIVED TOWARDS ITS OBJECT AND THE AO HIMSELF ACCEPTED THE DONATION RECEIVED IN CHEQUES ON ACCOUNT OF CORPUS. THUS, THERE WAS NO VALID REASON FOR THE AO TO DISBELIEVE ON THE DONA TION RECEIVED IN CASH WHEN THE SAME WERE UTILIZED TOWARDS THE OBJECTS OF THE ASSESSEE S TRUST. THUS, THE AO IS DIRECTED TO TREAT THE DONATION OF RS. 4797911/ - AS RECEIVED IN CASH ON ACCOUNT OF CORPUS DONATION. THE SAID GROUND OF APPEAL IS ACCORDINGLY DECID ED IN FAVOUR OF THE APPELLANT. 4. IT IS CLEAR FROM THE FINDING RECORDED BY THE LD. CIT(A) THAT THE ENTIRE AMOUNT OF DONATION ON ACCOUNT OF CORPUS - : 5 : - 5 RECEIVED BY THE ASSESSEE TRUST WAS UTILIZED TOWARDS OBJECT OF THE TRUST. IT WAS ALSO OBSERVED THAT THE ASSESSEE TRUST HAS PROVIDED LIST OF DONORS AND RECEIPT NUMBERS AND ALSO EXPLAINED UTILIZATION OF DONATION AMOUNT TOWARDS OBJECT OF THE TRUST. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) FOR DELETING THE ADDITION MADE ON ACCOUNT OF DONATION RECEIVED IN CASH IN SO FAR AS DONATION RECEIVED BY CHEQUES WERE DULY ACCEPTED BY THE ASSESSING OFFICER SINCE BOTH THE FUNDS RECEIVED THROUGH CHEQUES AND CASH WERE UTILIZED FOR THE PURPOSE OF THE TRUST. 5. IN THE RESULT, GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 6. THE ISSUE WITH REGARD TO ALLOWABILITY OF DEPRECIATION IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF M.P. MADHYAM & OTHERS, 13ITJ 103. THE LD. SENIOR D.R. FAIRLY AGREED THAT THE ISSUE IS COVERED BY THE ORDER OF THE COORDINATE BE NCH, WHEREIN THE DEPRECIATION WAS HELD TO BE ALLOWABLE AND THE LD. CIT(A) HAS ALSO DELETED THE ADDITION BY FOLLOWING THE DECISION OF THE COORDINATE BENCH. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) FOR DELETING THE SAID ADDITION. - : 6 : - 6 7. IN THE RE SULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 20 TH JU LY , 2011. S D/ - S D/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH JU LY , 2011 . CPU* 207