JCIT, Ghaziabad V. M/s. Highway Multiple Charitable Trust, Hapur

ITA 3602/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86472 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 05-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Additional evidence; Assessment record
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY , JUDICIAL MEMBER ITA NO. 3602/DEL/2013 ASS TT. YEAR 2006-07 JCIT V S. HIGHWAY MULTIPLE CHARITABLE TRUST RANGE-2, 16, VIVEK VIHAR CGO-2, HAPUR ROAD, HA PUR GHAZIABAD (PAN AADFH3226N) (APPELLANT) (RESPONDENT) APPELLANT BY :SHRI V.S. RASTOGI, AR RESPONDENT :SHRI SATPAL SINGH, SR. DR O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX GHAZIABAD DATED 13.3.201 3. 2. FACTS IN BRIEF : THIS IS THE CASE OF A T RUST WHICH WAS RUNNING A SCHOOL IN THE NAME OF CITY ACADEMY AT BABUGARH CANT. THE RETUR N OF INCOME FOR ASSTT. YEAR 2006-07 WAS FILED ON 31.10.2006 DECLARING NIL IN COME. AS PER THE STATEMENT OF TAXABLE INCOME ENCLOSED WITH THE RETURN, THE ASSESS EE DECLARED NET ASSESSABLE LOSS OF RS. 1,06,062/-. COPIES OF AUDITED ACCOUNTS WERE ENCLOSED WITH THE RETURN. THESE SHOW RECEIPT OF DONATION OF RS. 9,55,000/- AND UNS ECURED LOANS OF RS. 29,78,500/-. IN THE INCOME AND EXPENDITURE ACCOUNT OF CITY ACAD EMY , TOTAL RECEIPTS HAVE BEEN SHOWN AT RS. 14,63,650/- FROM SCHOOL FEES AND RENT. THERE ARE THREE BALANCE SHEETS ENCLOSED. ONE IS OF THE SCHOOL CITY ACADEMY . HER E A LOAN OF RS. 11,48,500/- WAS SHOWN. THE OTHER BALANCE SHEET IS OF HIGHWAY MULT IPLE CHARITABLE TRUST . HERE ITA . NO.3602/DEL/2013 AY 2006-07 JCIT VS. M/S HIGHWAY MULTIPLE CHARITABLE TRU ST 2 RECEIPT OF DONATIONS OF RS. 9,55,000/- AND UNSECURE D LOANS OF RS. 18,30,000/- WAS SHOWN. THE THIRD BALANCE SHEET IS CONSOLIDATION OF BOTH THE ABOVE REFERRED BALANCE SHEETS. AS PER INFORMATION IN THE ASSESSMENT RECORD , FOR A.Y. 2005-06, FOR WHICH ASSESSMENT WAS MADE U/S 143(3) ON 27.12.2007, ASSES SEE HAS ALREADY DECLARED RECEIPT OF UNSECURED LOANS OF RS. 23,30,000/- BEFOR E THE PERIOD ENDED 31.3.2005. THEREFORE IN F.Y. 2005-06 RELEVANT TO A.Y. 2006-07 NEW LOANS ARE TO THE TUNE OF RS. 6,48,500/- ONLY. 3. THE ASSESSMENT WAS MADE ON INCOME COMPUTED AS UNDER :- (I) UNPROVED UNSECURED LOANS RS. 6,48, 500/- (II) UNPROVED DONATIONS RS. 9, 55,000/- (III) RECEIPTS OVER EXPENDITURE OF SCHOOL RS. 98, 782/- ________________ RS. 17,02,282/- _________________ 4. AGGRIEVED THE ASSESSEE CARRIED THE MATTE R IN APPEAL. THE FIRST APPELLATE AUTHORITY GRANTED THE RELIEF. 5. AGGRIEVED BY THIS ORDER THE REVENUE IS IN APPEAL BY THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS A ND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITION OF RS. 6,48,500/- MA DE ON ACCOUNT OF UNAPPROVED UNSECURED LOANS AS CREDITWORTHINESS OF L ENDERS COULD NOT BE ESTABLISHED. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS A ND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITIONS OF RS. 9,55,000/- M ADE ON ACCOUNT OF UNPROVED DONATION. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS A ND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITION OF RS. 98,782/- MADE ON ACCOUNT OF RECEIPTS OVER EXPENDITURE OF SCHOOL. ITA . NO.3602/DEL/2013 AY 2006-07 JCIT VS. M/S HIGHWAY MULTIPLE CHARITABLE TRU ST 3 4. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS A ND CIRCUMSTANCES OF THE CASE, IN ACCEPTING THE ADDITIONAL EVIDENCES WHEN TH E CONDITIONS OF RULE 46A(1) OF THE I.T. RULES, 1962 ARE NOT SATISFIED WH EREAS THE ASSESSEE HAS BEEN PROVIDED SUFFICIENT OPPORTUNITY BY THE AO TO A DDUCE THE EVIDENCE. 5. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, IN NOT GIVING SUFFICIENT OPPORTUNITY TO THE A O U/S 250(4) OF THE ACT TO CONDUCT FURTHER INQUIRIES / VERIFICATION ON THE ADD ITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. 6. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS A ND CIRCUMSTANCES OF THE CASE, IN NOT FORWARDING THE COMMENTS OF THE ASSESSE E ON THE REMAND REPORT OF THE AO, FOR HIS COMMENTS, WHEN THE REMAND REPORT OF THE AO HAS BEEN CONFRONTED TO THE ASSESSEE BY THE LD. CIT(A) TO PRO VIDE THE AO A REASONABLE OPPORTUNITY. 6. WE HAVE HEARD SHRI SATPAT SINGH, SR. DR ON BEHALF OF THE REVENUE AND SHRI NEERAJ JAIN. LD. COUNSEL FOR THE ASSESSEE. 7. ON A CAREFUL CONSIDERATION OF THE FACTS AN D CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF T HE AUTHORITIES BELOW WE HOLD AS FOLLOWS :- 7.1. LD. FIRST APPELLATE AUTHORITY ADMITTED A DDITIONAL EVIDENCE ON AN APPLICATION MADE BY THE ASSESSEE UNDER RULE 46A. THE REMAND REP ORT WAS CALLED FOR. THE FIRST APPELLATE AUTHORITY AT PARA 8.1 HELD AS FOLLOWS :- 8.1 THE APPELLANT IS A CHARITABLE SOCIETY AND IS RUNNING SCHOOL IN THE VILLAGE FOR THE POOR STUDENTS AND THE RECEIPTS FROM THE SCH OOL HAVE BEEN DECLARED IN THE INCOME AND EXPENDITURE ACCOUNT OF THE SCHOOL R UN UNDER THE NAME OF CITY ACADEMY AT VILLAGE BABUGARH, TEHSIL HAPUR. THE RE IS EXCESS OF EXPENDITURE OVER THE RECEIPTS DECLARED AT RS. 14,63 ,650/- RESULTING IN TO LOSS OF RS. 35,287/- IN THE SCHOOL SET OF ACCOUNT. THIS FACT HAS BEEN ADMITTED BY THE AO IN THE ORDER AND THERE IS NO DISPUTE ON THIS POINT. THE APPELLANT HAS ENCLOSED WITH THE RETURN, SEPARATE INCOME AND EXPEN DITURE ACCOUNT OF SOCIETY WHERE AN AMOUNT OF RS. 68,699/- AS BANK INTEREST AN D RS. 2,075/- AS BANK CHARGES HAVE BEEN DEBITED MAKING THE TOTAL LOSS AT RS. 1,06,061/50 FOR THE FINANCIAL YEAR ENDING 31.3.2006. ITA . NO.3602/DEL/2013 AY 2006-07 JCIT VS. M/S HIGHWAY MULTIPLE CHARITABLE TRU ST 4 8. ON THE ADDITIONS OF RS.6,48,500/- U/S 68 THE LD. FIRST APPELLATE AUTHORITY OBSERVED THAT THESE VERY PARTIES ADVANCED LOANS TO THE ASSESSEE FOR THE EARLIER ASSTT. YEARS AND NO ADDITION WAS MADE IN THAT YEAR, THOUGH A SCRUTINY ASSESSMENT ORDER WAS PASSED. THESE PARTIES WERE SMT. HARJEET KAUR, S HRI GURJEET SINGH AND SHRI SURJEET SINGH. AFTER CONSIDERING REMAND REPORT OF THE AO AND THE DOCUMENTARY EVIDENCE GIVEN BY THE ASSESSEE, THE FIRST APPELLATE AUTHORITY CAME TO THE CONCLUSION THAT ON EXAMINATION OF ALL THE DOCUMENTS AND DETAIL S FURNISHED, NO ADDITION IS CALLED FOR. HE DELETED THE ADDITION. LD. DR COULD NOT CONT ROVERT THESE FACTUAL FINDINGS OF THE FIRST APPELLATE AUTHORITY. SIMILARLY ON AN ADDITION OF RS.9,55,000/- BEING DONATIONS, ON EXAMINATION OF EVIDENCE, THE FIRST APPELLATE AUT HORITY CAME TO THE CONCLUSION THAT THE ADDITION CANNOT BE SUSTAINED FOR THE REASON THA T THE ASSESSEE HAD PRODUCED ALL DOCUMENTARY EVIDENCES IN SUPPORT OF ITS CLAIM, WHER EAS THE AO HAS NOT CONDUCTED ANY INVESTIGATION OR COLLECTED ANY EVIDENCE TO CONT ROVERT THE EVIDENCE FURNISHED BY THE ASSESSEE. HE HELD THAT THE REASONS GIVEN BY THE AO ARE CASUAL IN NATURE. WE SEE NO REASON TO INTERFERE WITH THIS GROUND. 9. VIDE GROUND NO. 3 THE APPELLANT HAS OBJECTE D TO AN ADDITION OF RS. 1,34,070/- TO THE INCOME OF THE TRUST IN RESPECT OF EXPENSED D EBITED TO THE RECEIPT AND EXPENDITURE STATEMENT OF THE SCHOOL BY THE NAME OF CITY ACADEMY THEREBY TREATING THE SAME AS NOT ALLOWABLE EXPENDITURE. 10. THE ASSESSING OFFICER HAS NOT GIVEN ANY COMME NT ON THIS GROUND OF SUBMISSION MADE BY THE APPELLANT IN THE REMAND PROCEEDINGS. IN VIEW OF THE DETAILED SUBMISSION MADE BY THE APPELLANT, THE ADDITION OF R S. 98,782/- MADE TO THE INCOME HAS DELETED BY THE LD. CIT(A). ITA . NO.3602/DEL/2013 AY 2006-07 JCIT VS. M/S HIGHWAY MULTIPLE CHARITABLE TRU ST 5 11. WE FIND NO INFIRMITY IN THE SAME. IN THE RE SULT WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY AND DISMISS THE APPEAL OF THE R EVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JANUARY, 2015. SD/- SD/- (A.T. VARKEY) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 5 TH JANUARY, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DEPUTY REGISTRAR