DDIT(E), New Delhi V. DAV College Trust & Management Society, New Delhi

ITA 3093/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52526 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-08-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 21-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Assessee Lawyers: KARAN KHANNA
• Keywords: Capital asset; Opportunity of being heard; Additional evidence; Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO. 3093/DEL/2010 ASSESSMENT YEAR: 2002-03 DDIT(E), VS. DAV COLLEGE TRUST & INV. CIRCLE-II, MANAGEMENT SOCIETY, NEW DELHI. CHITRA GUPTA ROAD, PAHARGANJ, NEW DELHI. AAATD0495L (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. PRATIMA KAUSHIK, SR. D R RESPONDENT BY : KARAN KHANNA, ADV. ORDER PER C.L. SETHI, J.M. THE ONLY GROUND RAISED BY THE REVENUE IN THIS APPE AL FILED AGAINST THE ORDER DATED 17.03.2010 PASSED BY LD. CIT(A) FOR THE A.Y. 2002-03 IS AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE ON A/C OF CORPUS DONATION AT RS. 78,73,838/- EVEN THOUGH NO PROOF OR CONFIRMATION WAS FILED BEFORE THE AO TO PROVE THAT THE SAME WERE WITH ANY SPECIFIC DIRECTIONS ITA NO. 3093/D/2010 2 TO THE EFFECT THAT THEY WOULD FORM PART OF CORPUS FUND OF THE ASSESSEE. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. IN THIS CASE, THE ASSESSEE SOCIETY FILED ITS RET URN OF INCOME DECLARING TOTAL INCOME AT RS. NIL. THIS RET URN WAS SUBSEQUENTLY REVISED. THE CASE WAS SELECTED FOR SC RUTINY. AMONGST THE VARIOUS ADDITIONS, THE AO ALSO MADE AN ADDITION OF RS. 78,73,838/- CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE TOWARDS CORPUS FUND. THE AO MADE THIS ADD ITION FOR THE REASON THAT ASSESSEE HAD FAILED TO FILE PROPER CONFIRMATION IN SUPPORT OF THE CLAIM THAT THE AMOUNT WAS RECEIVE D TOWARDS CORPUS. 3. ON AN APPEAL, CIT(A) DELETED THE ADDITION BY HOL DING THAT THE DONATION TO THE CORPUS DOES NOT CONSTITUTE REVENUE BUT CAPITAL RECEIPT. HOWEVER, HE HAS FAILED TO EXA MINE AND DETERMINE AS TO WHETHER THE AMOUNT OF RS. 78,73,838 /- WAS ACTUALLY RECEIVED BY THE ASSESSEE TOWARDS CORPUS FU ND. THE GENUINENESS OF THE ASSESSEES CLAIM OF CORPUS FUND HAS NOT ITA NO. 3093/D/2010 3 BEEN EXAMINED BY THE LD. CIT(A) BEFORE DELETING THE ADDITION. FROM THE ORDER OF LD. CIT(A), IT IS SEEN THAT ASSES SEE PRODUCED CERTAIN ADDITIONAL EVIDENCES BEFORE HIM BUT THE SAM E WERE NOT ADMITTED/ENTERTAINED BY THE LD. CIT(A). THE LD. C IT(A) REJECTED THE ASSESSEES APPLICATION FOR ADMISSION O F ADDITIONAL EVIDENCES. IT IS, THUS, CLEAR THAT ASSESSEES ADDI TIONAL EVIDENCES FILED BEFORE THE LD. CIT(A) WERE NOT CONS IDERED BY HIM AND STILL THE LD. CIT(A) DELETED THE ADDITION M ERELY BY OBSERVING THAT THE DONATION TO THE CORPUS WOULD NOT CONSTITUTE REVENUE BUT CAPITAL RECEIPT WITHOUT DECIDING AS TO WHETHER THE DONATION RECEIVED BY THE ASSESSEE WAS TOWARDS CORPU S FUND. AT THIS STAGE, IT IS PERTINENT TO NOTE THAT EVEN AF TER MAKING THE AFORESAID ADDITION OF RS. 78,73,838/- ALONG WITH OT HER ADDITIONS MADE BY THE AO, THE TOTAL TAXABLE INCOME OF THE ASSESSEE WAS DETERMINED TO BE NIL IN AS MUCH AS THE AO ALLOWED THE DEDUCTION ON ACCOUNT OF APPLICATION OF INCOME TOWARDS CAPITAL ASSETS ACQUIRED DURING THE YEAR AND AS WELL AS A DEDUCTION U/S 11(1)(A) TO THE EXTENT OF 25% OF TH E TOTAL INCOME OF THE TRUST RESTRICTED THE SAME TO THE SURP LUS AVAILABLE TO THE ASSESSEE OUT OF THE TOTAL INCOME. HOWEVER, THE QUESTION WHETHER THE ADDITION OF RS. 78,73,838/- IS RELEVANT TO DECIDE WHETHER ASSESSEE HAS FURNISHED INACCURATE PA RTICULARS ITA NO. 3093/D/2010 4 OF INCOME OR CONCEALED ITS INCOME DURING THE YEAR, THOUGH ULTIMATELY, NO TAX WAS FOUND TO BE PAYABLE BY THE A SSESSEE BECAUSE OF EXEMPTION ALLOWED ON ACCOUNT OF APPLICAT ION OF INCOME AS WELL AS DEDUCTION U/S 11(1)(A) OF THE ACT . WE, THEREFORE, SET ASIDE THE ORDER OF LD. CIT(A) AND RE STORE THE MATTER BACK TO THE FILE OF AO FOR HIS FRESH ADJUDIC ATION AFTER EXAMINING AND VERIFYING THE NATURE OF DONATION CLAI MED TO HAVE BEEN RECEIVED BY THE ASSESSEE TOWARDS CORPUS. THE AO SHALL MAKE SUCH ENQUIRY FROM THE DONORS AS HE THINK S FIT AND PROPER FOR PROPER ADJUDICATION OF THE MATTER. THE AO SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. WE ORDER ACCORDINGLY. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED TO BE ALLOWED FOR A STATISTICAL PURPOSE. 5. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2011. SD/- SD/- (B.C. MEENA) (C. L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5.8.11 *KAVITA ITA NO. 3093/D/2010 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR