ACIT, Jaipur V. SHYAM LAL PANWAR ANANDI DEVI MEMORIAL CHARITBLE TRUST, Jaipur

ITA 378/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2053 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI CIT DHK
• Assessee Lawyers: G M MEHTA
• Keywords: Capital asset; Depreciation; Charitable institution; Diversion of income; Tangible material; Capital receipt; Revised return; Revenue expenditure; Capital expenditure
• Section: 143(3); 12A; 194C; 12AA; 32; 11; 6

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.378/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 THE ACIT (EXEMPTION), CIRCLE-JAIPUR, JAIPUR. CUKE VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.295/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. CUKE VS. THE ACIT (EXEMPTION), CIRCLE-JAIPUR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.379/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 THE ACIT (EXEMPTION), CIRCLE-JAIPUR, JAIPUR. CUKE VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 2 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.296/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. CUKE VS. THE ACIT (EXEMPTION), CIRCLE-JAIPUR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.851/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. CUKE VS. THE ACIT (EXEMPTION), CIRCLE - JAIPUR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.897/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE ACIT (EXEMPTION), CIRCLE - JAIPUR, JAIPUR. CUKE VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 3 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.852/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. CU KE VS. THE ACIT (EXEMPTION), CIRCLE - JAIPUR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.898/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 THE ACIT (EXEMPTION), CIRCLE-JAIPUR, JAIPUR. CUKE VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, 135, RAM NAGAR EXTENSION, NEW SANGANER ROAD, SODALA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AADTS0692R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRHDH VKSJ LS@ ASSESSEE BY : SHRI G.M. MEHTA (C.A..) JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S.KOTHARI (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/05/2017 ?KKS'K .KK DH R KJH[K @ DATE OF PRONOUNCEMENT: 23/06/2017. VKNS'K@ ORDER PER: SHRI VIKRAM SINGH YADAV, A.M. ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 4 THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE DIRECTED AGAINST ORDERS OF LD. CIT(A)-3, JAIPUR FOR A.Y. 2012-13 & 2007-08 DATED 30.01.2016 AND FOR A.Y. 2008-09 & 2013-14 D ATED 29.07.2016. ALL THESE APPEALS INVOLVE COMMON ISSUES AND WERE HEARD TOGETHER AND BEING DISPOSED OFF BY A CONSOLIDATED ORDER. AS REQUESTED BY THE LD CIT DR AND WITH THE CONSENT OF THE LD AR, AY 2012-13 IS TAKEN AS THE LEAD CASE FOR THE PURPOSES OF DISCUSSIONS. IN AY 2012-13, THE RESPEC TIVE GROUNDS OF APPEAL TAKEN BY THE REVENUE AND THE ASSESSEE ARE AS UNDER : ITA NO. 379/JP/2016 ( REVENUES GROUND): ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE CIT(A)-3, JAIPUR, HAS ERRED IN:- 1. DELETING THE ADDITION OF RS. 5,29,48,789/- MADE ON ACCOUNT OF CORPUS DONATIONS RECEIVED IN THE FORM OF BUILDING F UND TREATED BY THE AO AS REVENUE RECEIPTS. (A) BUILDING FUND RECEIVED BY THE ASSESSEE IS PART OF FEE RECEIPT AND IT IS NOT VOLUNTARY. ANY NON-VOLUNTARY CONTRIBUTION CA NNOT BE HELD AS DONATION AND NEVER BE COVERED U/S 11(1)(D). (B) THE FEE RECEIPTS DOES NOT HAVE WORD CORPUS MENT IONED THERE IN THUS IT CANNOT BE TREATED AS CORPUS DONATION. (C) FUNDS RECEIVED FOR SPECIFIC PURPOSES (I.E. BUIL DING FUND ARE FOR THE APPLICATION FOR SPECIFIC PURPOSES. IT IS NOT THE CA PITAL OF THE SOCIETY THEREBY NOT THE CORPUS OF THE SOCIETY. 2. DELETING THE TAXING OF SURPLUS AMOUNT TO RS. 11, 95,189/- BY HOLDING THAT THE PROVISIONS OF SEC. 11 &12 WILL APP LY TO ANY PENDING ASSESSMENT AS ON DATE OF SUCH REGISTRATION WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE HAS CLAIMED EXEMPTION NEITH ER IN ORIGINAL RETURN OF INCOME NOR ANY REVISED RETURN WAS FILED. THE CIT(A) HAS ERRED BY NOT APPLYING THE DECISION OF HONBLE SUPRE ME COURT IN GOETZE (INDIA) LTD. VS CIT 284 ITR 323 (SC) IN THE ASSESSEES CASE. 3. DELETING THE ADDITION MADE ON ACCOUNT OF DISALLO WANCE OF DEPRECIATION AMOUNTING TO RS. 1,89,57,668/- WITHOUT APPRECIATING THE ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 5 FACT THAT THE APPLICATION OF 100% EXPENDITURE OF TH E CAPITAL ASSET IS ALREADY ALLOWED AS CAPITAL EXPENDITURE HENCE FURTHE R ALLOWANCE OF THE DEPRECIATION ON THE SAME CAPITAL ASSET WOULD TANTAM OUNT TO DOUBLE DEDUCTION. 4. DELETING THE ADDITION ON DISALLOWANCE OF CHARITY /DONATION AMOUNTING TO RS. 18,039/- WITHOUT APPRECIATING THE FACT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE IN SUPPORT OF HIS CL AIM. 5. DELETING THE ADDITION OF RS. 15,00,000/- MADE OU T OF EXPENSES. ITA NO. 296/JP/2016 ( ASSESSEES GROUND): (1) LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN SU STAINING ADDITIONS OF RS. 42,13,871/- ON ACCOUNT OF PRESUMED INTEREST @ 12% P.A. FOR WHICH LD. AO APPLIED PROVISIONS OF SECTION 13(1)(C) (II) R.W. SEC. 13(2)(G) ON OUTSTANDING BALANCES OF THE FOLLOWING P ERSONS/ INSTITUTIONS TO WHOM EITHER NO MONEY WAS ADVANCED O UT OF CURRENT YEARS RECEIPTS OR MINOR SUM WAS ADVANCED IN ONE CA SE AS PER FOLLOWING DETAILS: MONEY ADVANCED TO BALANCE (31.03.2011) BALANCE (31.03.2012) DURING THE YEAR ADDITIONS SUSTAINED MRS. PRATIMA PANWAR 5,72,440 5,72,440 NIL 68,692 MR. KIRAN SINGH 7,00,000 7,00,000 NILL 84,000 PRIME LOCATION DEV.P.LTD. 2,89,67,745 2,89,67,745 N ILL 34,76,129 NIRMAL PANWAR FINANCE P. LTD. 42,33,751 35,33,751 N IL 84,000 AMBASSY TOURISM DEV. P. LTD. 33,75,000 41,75,000 8, 00,000 5,01,000 ADDITION SUSTAINED BY LD. CIT(A) (FOR WHICH LD. AO APPLIED SEC. 13(1)(C)(II) R.W.SEC. 13(2)(G) 42,13,821 (2) LD. CIT(A) HAS ERRED IN LAW IN DENYING STATUTOR Y DEDUCTION UNDER SECTION 11 OF IT ACT (SURPLUS UP TO 15%) ON THE FOLLOWING S UMS: (I) ON ADDITION OF RS. 42,13,821/- SUSTAINED AS PER GROUND NO. (1); (II) ON ADDITION OF RS. 26,260/- SUSTAINED UNDER SE CTION 40(A)(IA) OF IT ACT. (3) LD CIT(A) WAS NOT JUSTIFIED IN SUSTAINING FOLLO WING ADDITIONS: ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 6 (I) RS. 18,039/- FOR THE CHARITABLY AND DONATIONS, THOUGH FOUND TO BE ALLOWABLE IN A.Y. 2007-08; (II) LUMP SUM ADDITION OF RS. 5,00,000/- OUT OF PAY MENTS MADE TO CIVIL CONSTRUCTION CONTRACTORS ON WHICH APPLICABLE TDS U/ S 194C OF IT ACT WAS DEDUCTED AND PAID TO THE CREDIT OF CENTRAL GOVT. 2. REGARDING GROUND NO. 1 IN REVENUES APPEAL, THE FAC TS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO OBSERVED THAT UNDER THE HEAD BUILDING FUND THERE IS AN ADDITION OF RS. 5,29,48,789/-. IN ORDER TO ASCERTAIN THE GENUINENESS OF THIS INCREASE IN BUILDING FUND, THE AO ISSUED A SHOW CAUSE AS UNDER: THE DETAILS FILED AND RECORDS PRODUCED HAVE REVEAL ED THAT THE BUILDING FUND IS RECEIVED FROM STUDENTS AS A PART OF REGULAR FEES . COPIES OF THE RECEIPTS ISSUED TO THESE STUDENTS HAVE ALSO BEEN GONE THROUG H WHEREIN IT IS CLEARLY MENTIONED THAT THE BUILDING FUND IS RECEIVED AS PAR T AND PARCEL OF THE REGULAR FEES AS ANY OTHER FEES UNDER THE HEAD ADMIS SION FEES, TUITION FEES AND CAUTION MONEY. FURTHERMORE THE BUILDING FUND IS FIXED BY THE MANAGEMENT OF UNIVERSITY. PRIMA FACIE THESE RECEIPT S OF BUILDING FUND IS NOT A VOLUNTARY CONTRIBUTION BUT THE STUDENTS WERE BOUN D TO PAY AS A PART OF REGULAR FEES. SIMILAR ISSUE WAS ALSO DEALT WITH BY THE AO WHILE C OMPLETING THE ASSESSMENT FOR A.Y. 2011-12 WHEREIN THE AO HAS HELD THAT THE BUILDING FUND WAS A PART OF REVENUE RECEIPTS. IN VIEW OF THE AFOR EMENTIONED FACTS YOU ARE REQUIRED TO FURNISH YOUR EXPLANATION AS TO WHY THE BUILDING FUND SHOULD NOT BE TREATED AS REVENUE RECEIPTS AS A PART OF THE FEE S RECEIVED FROM THE STUDENTS. ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 7 2.1 THE LD CIT DR TOOK US THROUGH THE FINDINGS OF T HE AO WHICH ARE AS UNDER: 5.2 THE MATERIAL AVAILABLE ON RECORD AS WELL AS TH E ASSESSEES ABOVE MENTIONED SUBMISSION HAS BEEN CONSIDERED. I HAVE AL SO CONSIDERED THE ASSESSEES ARS SUBMISSION THAT SIMILAR ISSUE WAS I NVOLVED IN A.Y. 2011-12 WHEREIN THE BUILDING FUND WAS TREATED BY THE AO AS REVENUE RECEIPT AND THE LD. CIT(A), JAIPUR-II, JAIPUR HAS DELETED THE ADDIT ION MADE. SIMILAR ISSUE IS ALSO INVOLVED IN THE SCRUTINY ASSESSMENT PROCEEDING FOR THE A.Y. 2012-13, THEREFORE, THE MATERIAL PRODUCED DURING THE SCRUTIN Y ASSESSMENT PROCEEDINGS FOR A.Y. 2007-08 AS WELL AS A.Y. 2012-1 3 IS CONSIDERED. THE COPIES OF THE RECEIPTS ISSUED AGAINST BUILDING FUND CLEARLY SHOWS THAT THE BUILDING FUND IS RECEIVED FROM THE STUDENTS AS NORM AL FEES. THERE IS NO DISTINCTION BETWEEN BUILDING FUND OR ANY OTHER FEES LIKE TUITION OR UNDER ANY OTHER HEAD. THERE IS NO OPTION AVAILABLE TO THE STU DENTS AND WITHOUT DEPOSITING THE BUILDING FUND THEY CANNOT BE ADMITTE D. IT IS PRE-CONDITION FOR THE STUDENTS AS SUCH THERE IS NO VOLUNTARY CONTRIBU TION BUT IT IS A STIPULATED FEES WHICH IS COMPULSORY IN NATURE. THEREFORE, BUIL DING FUND IS TREATED AS NORMAL FEES. IN THE ASSESSEES CASE IT IS ALSO WORT HWHILE TO DISCUSS THE NATURE OF THE RECEIPT ISSUED TO THE STUDENTS. 5.3 FROM THE AFOREMENTIONED RECEIPT IT IS VERY MUC H CLEAR THAT THE BUILDING FUND IS PART OF REGULAR FEES AND IT HAS BE EN MENTIONED IN THE RECEIPT ISSUED IN THE NAME OF BUILDING FUND ALONGWI TH OTHER RECEIPTS LIKE ADMISSION FEES, TUITION FEES. FROM THE AFOREMENTION ED RECEIPT IT IS ALSO CLEARLY ESTABLISHED THAT THERE IS NO DIRECTIONS FRO M THE STUDENTS THAT THESE PAYMENTS IS VOLUNTARY AND IT WILL FORM PART OF CORP US FUND. KEEPING IN VIEW OF THESE FACTS AND IN THE ABSENCE OF VOLUNTARY DONA TIONS AS WELL AS SPECIFIC DIRECTIONS FROM THE DONOR FOR A PARTICULAR PURPOSE IT CANNOT BE ALLOWED AS ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 8 CORPUS DONATION. THIS IS VITAL FACTOR WHICH MAKES I T VERY CLEAR THAT THE BUILDING FUND RECEIVED IS PART OF REGULAR FEES. 5.4 FURTHERMORE THE ASSESSEES ARS SUBMISSION TH AT THE ADDITION MADE IN A.Y. 2011-12 HAS BEEN DELETED BY THE LD. CIT(A) -II, JAIPUR IS NOT MAINTAINABLE FOR THE REASON THAT THERE ARE A NUMBER OF INCONSISTENCIES IN THE ORDER PASSED BY THE LD. CIT(A) WHICH HAVE NOT B EEN ACCEPTED BY THE DEPARTMENT AND FURTHER APPEAL HAS BEEN FILED BEFORE THE HONBLE ITAT, JAIPUR BENCH, JAIPUR WHICH IS PENDING FOR DECISION. FURTHERMORE EACH YEAR IS DISTINCT YEAR AND THE TRUE NATURE OF THE ASSESSEES RECEIPT OF BUILDING FUND HAS BEEN EXAMINED IN DETAIL WHICH HAS RESULTED IN H OLDING THAT IT IS A RECEIPT OF REVENUE NATURE AS SUCH IT HAS TO BE ROUNDED THRO UGH THE INCOME AND EXPENDITURE ACCOUNT. ACCORDINGLY IN VIEW OF AFOREME NTIONED DISCUSSION THE BUILDING FUND OF RS. 5,29,48,789/- IS HELD TO BE A REVENUE RECEIPTS FOR THE YEAR UNDER CONSIDERATION. 3. PER CONTRA, THE LD AR SUBMITTED THAT DURING THE YEAR, THE ASSESSEE TRUST HAS RECEIVED VOLUNTARY DONATION OF RS. 5,29,4 8,789/- FROM STUDENTS/PARENTS TOWARD BUILDING FUND FROM THE STUD ENTS/PARENTS WHICH WAS ONE TIME DONATION. THE BUILDING FUND SO RECEIVED IS NEITHER FIXED NOR IDENTICAL AMOUNT IN ALL CASES OF DONORS, SINCE IT I S VOLUNTARY.NO DONATION TOWARD BUILDING FUND WAS RECEIVED FROM MORE THAN 35 % OF THE STUDENTS.THE AMOUNT SO RECEIVED WAS PROPERTY ACCOUNTED FOR AND C REDITED DIRECTLY TO BUILDING FUND ACCOUNT OF THE ASSESSEE (IN BALANCE S HEET).THE BUILDING FUND DONATIONS WERE APPLIED IN CONSTRUCTION OF BUILDINGS FOR EDUCATIONAL PURPOSES IN SUBSEQUENT PERIOD WHEREAS OUT OF TUITION FEE, TH E MAJOR PART WAS SPENT IN IMPARTING EDUCATION. ASSESSEE TRUST WAS GRANTED REG ISTRATION U/S 12AA OF IT ACT ON 08.08.2014 (PAPER BOOK PAGE 83), AFTER CONSI DERING THE TRUST DEED DATED 24 TH NOVEMBER 2001 MEANING THEREBY, AND ASSESSEE TRUST WAS QUALIFYING AND WAS ELIGIBLE FOR 2001. MOREOVER, AFT ER INSERTION OF PROVISO TO ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 9 SECTION 12A(2) OF IT ACT BY FINANCE (NO. 2) ACT 201 4 THE BENEFIT OF REGISTRATION U/S 12AA IS TO BE ALLOWED TO ALL PENDI NG ASSESSMENTS BEFORE THE AO. HAD THE DONATION TOWARD BUILDING FUND BEEN TREA TED AS REVENUE RECEIPT, THE ASSESSEE TRUST WOULD NOT HAVE RESORTED TO CHARG E SEPARATELY THE MONTHLY/QUARTERLY TUITION FEE. ONETIME PAYMENT OF V OLUNTARY DONATION TOWARD BUILDING FUND IS CAPITAL RECEIPT AND IS BEIN G USED FOR CONSTRUCTION OF BUILDING (PB 84 TO 91) AND IS NON REFUNDABLE WHEREA S TUITION FEE SO COLLECTED IS SPENT FOR ACADEMIC FILED LIKE ON EDUCA TIONAL EXPENSES LIKE SALARY TO TEACHERS, STATIONARY, WORKSHOP EXPENSES, COMPUTE R EDUCATION ETC. LD. AO HAD RATHER FAILED TO DISTINGUISH THE RECEIPT OF CORPUS FUND AS AGAINST TUITION FEES. THERE IS A DISTINCTION BETWEEN THE C ORPUS FUND AND TUITION FEE. WHEREAS LD. CIT(A) WAS JUSTIFIED IN HER FINDI NG THAT THE SAID VOLUNTARY CONTRIBUTIONS WERE IN THE NATURE OF CORPUS FUND AND AS SUCH EXEMPT UNDER SECTION 12. 3.1 IT WAS FURTHER SUBMITTED THAT SECTION 11(1)(D) PROVIDES THAT SUBJECT TO PROVISIONS OF SECTIONS 60 TO 63, THE FOLLOWING I NCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PER SON IN RECEIPTS OF THE INCOME- (A) INCOME IN THE FORM OF VOLUNTARY CONTRIBUTIONS MADE WITH SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS O F THE TRUST OR INSTITUTION. THEREFORE, THE VOLUNTARY CONTRIBUTIONS WITH SPECIFI C DIRECTION AS TOWARD BUILDING FUND ARE CORPUS DONATION WHICH CANNOT BE T REATED AS REVENUE RECEIPTS AS HELD BY LD. AO. RELIANCE IS PLACED ON T HE FOLLOWING JUDGMENTS: (1) J.B. EDUCATIONAL SOCIETY VS. ACIT (2014)159 TTJ (HY D) 236: DONATIONS RECEIVED FOR A SPECIFIC OBJECT ARE TO BE CONSIDERED AS TIED UP FUND AND IS CAPITAL RECEIPT. SAME CANNOT BE HELD AS INCO ME AND TAXED. VOLUNTARY ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 10 CONTRIBUTIONS IN NATURE OF TIDE UP GRANTS RECEIVED BY THE ASSESSEE SOCIETY CANNOT BE BROUGHT TO TAX EVEN THOUGH IT IS NOT REGI STERED UNDER SECTION 12AA, IF THE SAME IS USED FOR SPECIFIC PURPOSE FOR WHICH THEY WERE GIVEN. (2) DIRECTION OF IT (EXEMPTION) VS. NATIONAL ASSOCIATIO N OF SOFTWARE & SERVICE COMPANIES (2012) 253 CTR 33(DEL): ONE TIME DONATION FOR ACQUIRING CAPITAL ASSETS MUST BE HELD TO BE CORPUS DONATION WHICH IS NOT TAXABLE AS INCOME. (3) DIRECTOR OF INCOME TAX (EXEMPTION) VS. SHRI RAMAKRI SHNA SEVA ASHRAM (2013) 357 ITR 731 (KARN):VOLUNTARY CONTRIBU TIONS FOR SPECIFIC PURPOSE CONSTITUTE CORPUS FUND. 85% OF AMOUNT IS NO T UTILIZED FOR CHARITABLE PURPOSE, NOT RELEVANT. THE WORD CORPUS USED IN CO NTEXT OF INCOME TAX ACT IS TO BE UNDERSTOOD IN CONTEXT OF CAPITAL AS OPPOSE D TO AN EXPENDITURE. IF A VOLUNTARY CONTRIBUTION IS MADE WITH A SPECIFIC DIRE CTION, IT SHALL BE TREATED AS THE CAPITAL OF THE TRUST FOR CARRYING ON ITS CHARIT ABLE OR RELIGIOUS ACTIVITIES. THEN SUCH INCOME FALLS UNDER SECTION 11(1)(D) AND I S NOT LIABLE TO TAX. (4) DIRECTOR OF INCOME TAX (EXEMPTION) VS. NATIONAL ASS OCIATION OF SOFTWARE & SERVICES COMPANIES (2012) 345 ITR 362 (D EL): CORPUS DONATION IS ONE TIME ADMISSION FEE PAID BY MEMBERS WHO ARE AWARE THAT IT COULD BE SPENT BY ASSESSEE ONLY FOR ACQUIRING CAPIT AL ASSET IS CORPUS DONATION, NOT TAXABLE INCOME. (5) CIT VS. CHILDRENS EDUCATION SOCIETY (2014) 264 CTR (KAR) 389: IF THE DONATIONS ARE RECEIVED BY ASSESSEE FROM STUDENTS WH O ARE STUDYING IN THE SCHOOL RUN BY IT AND THE SAME ARE PROPERLY ACCOUNTE D FOR IN THE BUILDING FUND/INFRASTRUCTURE FUND AND SAID AMOUNT IS UTILIZE D FOR CONSTRUCTION OF ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 11 BUILDING WHICH IS USED FOR IMPARTING EDUCATION, IT WOULD CONSTITUTE CHARITY AND THEREFORE, THE ASSESSEE SOCIETY WILL BE ENTITLE D FOR EXEMPTION. (6) SUKHDEO CHARITY ESTATE VS. ITO (1984) 149 ITR 470 ( RAJ): WHEN THE AMOUNT IS BE SPENT FOR SPECIFIC PURPOSES, IT CANNOT BE SAID AS ASSESSABLE INCOME UNDER SECTION 12(2). (7) SUKHDEO CHARITY ESTATE VS. ITO (1991) 192 ITR 61 (R AJ): THE INTENTION OF THE DONOR AND THE DONEE IS TO BE SEEN. IF THE INTENTION OF THE DONOR IS THAT THE DONATION GIVEN IS TO BE TREATED A S CAPITAL AND THE INCOME THEREOF HAS TO BE APPLIED FOR CHARITABLE PURPOSES, THEN THE SAID VOLUNTARY CONTRIBUTION IS TOWARDS THE PART OF THE CORPUS OF T RUST. SIMILARLY, AFTER RECEIVING THE AMOUNT IF THE DONE KEEPS IT IN DEPOSI T AND ONLY UTILIZES THE INCOME THERE FROM TO CARRY ON CHARITABLE ACTIVITIES , THEN ALSO THE SAID AMOUNT WOULD AMOUNT TO BE CONTRIBUTION TO THE CORPU S OF THE TRUST AND THE NOMENCLATURE IN WHICH THE DEPOSITS ARE KEPT AS CAPI TAL AND THE INCOME THEREOF IS UTILIZED FOR CARRYING ON THE CHARITABLE AND RELIGIOUS ACTIVITIES OF THE TRUST. 3.2 REGARDING SPECIFIC SUB-GROUNDS RAISED BY THE RE VENUE, IT WAS FURTHER SUBMITTED BY THE LD AR AS UNDER: (A) BUILDING FUND RECEIVED AS PART OF FEE: DONATIONS FO R BUILDING FUND ARE VOLUNTARY DONATION. HAD IT BEEN PART OF FEE, IT WOU LD HAVE BEEN IDENTICAL AMOUNT IN ALL CASES OF SAME COURSE OF STUDIES AND W OULD HAVE BEEN CHARGED FROM ALL STUDENTS WHEREAS IT WAS NOT RECEIVED FROM ABOUT 35% OF THE STUDENTS. (B) FEE RECEIPTS DO NOT HAVE THE WORD CORPUS: NO NEED U NDER THE ACT THAT IN RECEIPTS, CORPUS WORD BE MENTIONED. IT SHO ULD BE FOR SPECIFIC ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 12 PURPOSE {357 ITR 731 (KARN) & 149 ITR 470 (RAJ)}. THE INTENTION OF DONOR & DONEE TO BE SEEN {SUKHDEO CHARITY ESTATE 192 ITR 61 (RAJ)}. (C) FUND RECEIVED FOR SPECIFIC PURPOSE IS NOT CAPITAL O F SOCIETY AND THEREFORE NOT CORPUS: THIS GROUND APPEARS TO BE GEN ERAL IN NATURE WHERE LD. AO, AFTER EXAMINING THE RECORDS HAS ADMITTED THAT D ONATIONS WERE FOR SPECIFIC PURPOSE. WHEN IT IS FOR SPECIFIC PURPOSE, IT IS CORPUS DONATION AS HELD IN VARIOUS JUDICIAL PRONOUNCEMENTS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS OF THE CASE ARE IDE NTICAL TO THE FACTS IN ASSESSEES OWN CASE IN AY 2011-12. EVEN THE LD CIT (A) HAS FOLLOWED HER PREDECESSORS ORDER FOR AY 2011-12. WHILE DISPOSING OFF THE REVENUES APPEAL FOR AY 2011-12 IN ITA NO. 110/JP/15 VIDE OUR ORDER DATED 1.11.2016, WE HAVE ALREADY EXAMINED THE MATTER AT L ENGTH AND AFTER REFERRING TO THE CONTENTION OF BOTH THE PARTIES, HA VE SET-ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE MATTER AFRESH. F OR THE YEAR UNDER CONSIDERATION, OUR FINDINGS AND DIRECTIONS GIVEN FO R AY 2011-12 SHALL APPLY MUTATIS-MUTANDIS TO THIS APPEAL AS WELL. FOR SAKE OF CONVENIENCE, THE SAID FINDINGS ARE REPRODUCED AS UNDER: 3.6 IF WE WERE TO READ THE RATIO EMERGING OUT OF T HE ABOVE TWO JUDGEMENTS, WHAT CLEARLY EMERGES IS TO DETERMINE TH E INTENTION OF THE DONOR AND THE TREATMENT OF THE RECEIPTS BY THE DONE E TRUST. WHERE THE INTENTION OF THE DONOR IS THAT THE AMOUNT/DONAT ION GIVEN IS TO BE TREATED AS CAPITAL AND THE INCOME FROM THAT CAPITAL HAS TO BE UTILIZED FOR THE CHARITABLE PURPOSES, THEN THE SAID VOLUNTAR Y CONTRIBUTION IS TOWARDS THE PART OF THE CORPUS OF THE ASSESSEE TRUS T. IT IS NOT NECESSARY THAT THE PERSONS WHO MADE THESE CONTRIBUT IONS SPECIFICALLY DIRECT THAT THEY SHALL FORM PART OF THE CORPUS OF T HE TRUST. SIMILARLY, THE ASSESSEE TRUST AFTER RECEIVING THE AMOUNT, KEEP S THE AMOUNT IN DEPOSIT AND ONLY UTILISE THE INCOME FROM THE DEPOSI T TO CARRY OUT THE ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 13 EDUCATIONAL ACTIVITIES, THEN ALSO THE SAID AMOUNT W OULD BE A CONTRIBUTION TO THE CORPUS OF THE TRUST AND THE NOM ENCLATURE IN WHICH THE AMOUNT IS KEPT IN DEPOSIT IS OF NO RELEVANCE AS LONG AS THE CONTRIBUTION RECEIVED ARE KEPT IN DEPOSIT AS CAPITA L AND ONLY THE INCOME FROM THE SAID CAPITAL IS UTILIZED FOR CARRYI NG ON EDUCATIONAL ACTIVITIES OF THE ASSESSEE TRUST. FURTHER, THE VOL UNTARY CONTRIBUTION/DONATION, CAN BE MADE BY THE PARENTS O F THE STUDENTS STUDYING IN THE EDUCATION INSTITUTIONS, WITH A SPEC IFIC DIRECTION TOWARDS THE BUILDING FUND. THE DIRECTIONS COULD BE IN WRITING OR ORAL. WHERE THE DIRECTIONS ARE ORAL, WHAT IS ESSENTIAL IS THAT THE CONTRIBUTIONS ARE PROPERLY ACCOUNTED FOR AND INCOME FROM SUCH CONTRIBUTIONS ARE UTILIZED FOR CONSTRUCTION OF THE BUILDING. IN LIGHT OF THESE DISCUSSIONS, GROUND NO. 1(III) AND 1(IV) TAKE N BY THE REVENUE ARE DISMISSED. 3.7 IN THE INSTANT CASE, THE LD AR HAS SUBMITTED TH AT THE VOLUNTARY CONTRIBUTIONS MADE WITH SPECIFIC DIRECTION TOWARDS BUILDING FUND ARE CORPUS DONATION WHICH CANNOT BE TREATED AS REVENUE RECEIPTS AND THE SAME IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11(1)( D) OF THE ACT. IT WAS SUBMITTED THAT DURING THE YEAR, THE ASSESSEE TR UST HAS RECEIVED VOLUNTARY DONATION OF RS. 5,30,09,085/- FROM STUDEN TS/ PARENTS TOWARD BUILDING FUND AND THIS WAS ONE TIME DONATI ON DISTINCT FROM THE REGULAR TUITION FEES. THE BUILDING FUND SO RECE IVED IS NEITHER FIXED NOR IDENTICAL AMOUNT IN ALL CASES OF DONORS, SINCE IT IS VOLUNTARY. NO DONATION TOWARDS BUILDING FUND WAS RECEIVED AT ALL FROM 269 STUDENTS. THE AMOUNT SO RECEIVED WAS PROPERLY ACCOUNTED FOR A ND CREDITED DIRECTLY TO BUILDING FUND ACCOUNT OF THE ASSESSEE. IN SUPPORT, REFERENCE WAS DRAWN TO LEDGER OF BUILDING FUND ACCO UNT AVAILABLE AT APB 7-75. THERE IS NO DISCRETION WITH THE MANAGEME NT OF THE ASSESSEE TRUST AND THE BUILDING FUND DONATIONS SO R ECEIVED WERE APPLIED IN CONSTRUCTION OF BUILDINGS FOR EDUCATIONA L PURPOSES AFTER RECEIPT WHEREAS THE OTHER RECEIPT-TUITION FEE, CHAR GED SEPARATELY WAS UTILIZED FOR IMPARTING EDUCATION. IN SUPPORT, REFE RENCE WAS AGAIN DRAWN TO EXPENDITURE INCURRED ON BUILDING INFRASTRU CTURE AND IT WAS SUBMITTED THAT AN AMOUNT OF RS 3,98,47,044 WAS SPEN T DURING THE YEAR ON CONSTRUCTION OF BUILDING INFRASTRUCTURE AND AS ON 31.3.2014, AN AMOUNT OF RS 19,16,31,482 HAS BEEN SPENT ON THE BUILDING INFRASTRUCTURE. PER CONTRA, THE LD DR SUBMITTED T HAT THE STUDENTS ARE ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 14 PAYING FEES TO PURSUE THEIR EDUCATIONAL QUALIFICAT IONS AND THERE IS NO VOLUNTARY ELEMENT INVOLVED IN IT RATHER IT IS COMPU LSORY FOR THEM TO PAY FEES FOR THESE COURSES. FURTHER, THE QUESTION OF GIVING SPECIFIC DIRECTION DOES NOT ARISE AS THIS IS NOT THE DONATI ON BUT THE FEES RECEIVED FOR ACQUIRING EDUCATIONAL QUALIFICATIONS. MERE ASSIGNING THE NAME OF BUILDING FUND TO RECEIPTS OF REVENUE NAT URE DOES NOT WARRANT THAT THESE RECEIPTS WILL BE CONSIDERED AS C APITAL RECEIPTS. STUDENTS DO NOT HAVE CHOICE TO DONATE THE AMOUNT FO R BUILDING FUND WITH SPECIFIC DIRECTIONS. THERE IS NO DONOR/DONEE RELATIONSHIP WHICH IS PERQUISITE FOR DONATION BUT IN THE INSTANT CAS E THE STUDENTS ARE GETTING THEIR EDUCATIONAL QUALIFICATION IN LIEU OF PAYMENT MADE TO INSTITUTION AND THE AMOUNT IN QUESTION IS NOTHING B UT THE FEES RECEIVED FROM STUDENTS IN THE NAME OF BUILDING FUN D. IT WAS FURTHER SUBMITTED THAT NO SEPARATE BOOKS OF ACCOUNTS ARE BE ING MAINTAINED FOR THE USE OF THIS FUND I.E. NO SEPARATE ACCOUNT I N THE FORM OF BUILDING FUND IS BEING MAINTAINED IN ANY BANK SO T HAT ITS USE CAN BE ASCERTAINED. ASSESSEE HAS FAILED TO ESTABLISH THAT THESE FUNDS ARE BEING UTILIZED FOR THE SPECIFIC PURPOSE AND THE MAN AGEMENT IS FREE TO USE THIS FUND AS PER THEIR OWN SUITABILITY. A DONA TION WILL BE TREATED AS CORPUS DONATION ONLY IF IT IS ACCOMPANIED BY A S PECIFIC WRITTEN DIRECTION OF THE DONOR. IN THE ABSENCE OF ANY WRIT TEN DIRECTION OF THE DONOR, A CONTRIBUTION OF GRANT CANNOT BE TRANSFERRE D TO CORPUS FUND. 3.8 IN OUR VIEW, WHAT IS RELEVANT TO DETERMINE IS W HETHER THERE IS A VOLUNTARY CONTRIBUTION/DONATIONS BY THE STUDENTS/PA RENTS WITH A DIRECTION TO UTILISE THE SAME TOWARDS CONSTRUCTION OF THE BUILDING INFRASTRUCTURE AND SECONDLY, HOW THE SAME HAS BEEN ACCOUNTED FOR AND UTILISED BY THE ASSESSEE TRUST. HOWEVER, GIVEN THE CONTRADICTORY POSITION TAKEN BY THE ASSESSEE AND THE REVENUE AND IN ABSENCE OF ANY TANGIBLE MATERIAL ON RECORD PRODUCED BY EITHER OF THE TWO PARTIES, IT WOULD BE IN INTEREST OF JUSTICE AND FAIR PLAY TH AT THE MATTER IS REMANDED BACK TO THE ASSESSING OFFICER WHO SHALL TA KING INTO CONSIDERATION THE LEGAL PROPOSITIONS AS LAID DOWN B Y THE VARIOUS COURTS AS DISCUSSED ABOVE, WILL EXAMINE THE MATTER A FRESH. WE ACCORDINGLY SET-ASIDE THE MATTER RELATING TO ELIGIB ILITY TO CLAIM BENEFIT OF SECTION 11(1)(D) OF THE ACT TO THE FILE OF THE A SSESSING OFFICER. HENCE, REVENUES GROUND NO. 1(II) AND ASSESSEES GR OUND NO. 2(A) ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 15 5. IN RESPECT OF GROUND NO. 2 OF THE REVENUES A PPEAL, THE FACTS OF THE CASE ARE THAT THERE IS NO CLAIM OF EXEMPTION U/S 11 IN THE RETURN OF INCOME FILED ON 06.05.2013 AND THIS RETURN HAS NOT BEEN RE VISED WITH THE TIME ALLOWED U/S 139(4) OF THE ACT BUT DURING THE ASSESS MENT PROCEEDINGS THE ASSESSEE HAS RAISED CLAIM OF EXEMPTION U/S 11 ON TH E BASIS OF REGISTRATION GRANTED U/S 12A BY THE COMMISSIONER OF INCOME TAX, JAIPUR-I, JAIPUR VIDE LETTER NO. CIT/JPR-I/ITO(T&J) U/S 12AA 2014-15/549 DATED 08.08.2014 W.E.F. 26.03.2014. HOWEVER, THE ASSESSEES CONTENTI ON THAT IN VIEW OF PROVISO TO SECTION 12A THE ASSESSEE IS ELIGIBLE FOR EXEMPTION FOR THE YEAR UNDER CONSIDERATION AS THE PROCEEDINGS ARE PENDING BEFORE THE AO WAS NOT ACCEPTED BY THE AO FOR THE REASON THAT WHEN THERE I S NO CLAIM IN THE RETURN OF INCOME OR IN THE REVISED RETURN THEN THIS PROVIS O DOES NOT COME IN PICTURE. IN THE ASSESSEES CASE IN THE ORIGINAL RET URN OF INCOME FILED ON 06.05.2013 THERE IS NO CLAIM OF EXEMPTION U/S 11. F URTHERMORE NO REVISED RETURN HAS BEEN FILED. THERE IS NO CLAIM IN THE ORI GINAL RETURN FILED AND AS WELL AS NO REVISED RETURN HAS BEEN FILED SO AS TO M AKE THE CLAIM FOR EXEMPTION U/S 11 BASED ON THE REGISTRATION GRANTED U/S 12AA OF THE ACT. THE ASSESSEES CLAIM CANNOT BE ENTERTAINED. THE ONL Y AVAILABLE GROUND FOR CLAIMING THE EXEMPTION IS BY WAY OF EITHER MAKING A CLAIM IN THE ORIGINAL RETURN OF INCOME OR TO FILE A REVISED RETURN BUT TH IS IS NOT SO IN THE ASSESSEES CASE. THEREFORE, IN VIEW OF THE HONBLE APEX COURTS DECISION IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT 284 ITR 323 (SC), THE ASSESSEES CLAIM WAS NOT ACCEPTED BY THE AO. HOWEVER, THE LD CIT(A) ACCEPTED THE SAID CLAIM AND NOW, THE REVENUE IS IN APPEAL BEFORE US AND THE LD CIT DR RELIED ON THE FINDINGS OF THE AO. 6. IN THIS REGARD, THE LD AR SUBMITTED THAT THE ORI GINAL RETURN OF INCOME WAS SUBMITTED ON 06.05.2013. ON 07.04.2014 WHEN REQ UEST WAS MADE TO ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 16 AO, THE FIRST PROVISO TO SECTION 12A(2) WAS NOT IN STATUTE BOOK, NOR THE ASSESSEE COULD FILE REVISED RETURN FOR A BELATED RE TURN, THEREFORE, THERE WAS NO OCCASION TO FILE ANY REVISED RETURN OF INCOME FO R CLAIMING DEDUCTION U/S 11 AND 12 OF IT ACT. THE ASSESSEE HAD CLAIMED THE E XEMPTION WHICH HAS ALSO BEEN ADMITTED BY LD. AO AT PARA 1.8 OF ORDER A PPEALED AGAINST. IT WAS REQUESTED TO THE LD. AO THAT AFTER INSERTION OF FIR ST PROVISO TO SECTION 12A(2) OF IT ACT BY FINANCE (NO.2) ACT 2014, THE ASSESSEE TRUST IS ELIGIBLE FOR DEDUCTION U/S 11 AND 12 OF IT ACT WHICH MAY PLEASE BE ALLOWED. THOUGH THE LD. AO HAD ADMITTED THE REQUEST OF THE ASSESSEE FOR CLAIM OF EXEMPTION U/S 11 & 12 OF IT ACT BUT THE CLAIM WAS NOT ALLOWED BY HIM STATING THAT IT WAS NOT CLAIMED. IT IS RELEVANT TO REFER THE FOLLOW ING JUDICIAL PRONOUNCEMENTS, IGNORED BY THE LD. AO. (A) WIPRO LTD. VS. DY. CIT(2016) 382 ITR 179 (KARN): IT IS DUTY OF THE AO TO ALLOW DEDUCTION, EVEN IF NOT CLAIMED IN RETURN. (B) VIJAY GUPTA VS. CIT (2016) 386 ITR 643 (DEL): AO SH OULD NOT TAKE ADVANTAGE OF IGNORANCE, ERROR OR MISTAKE OF ASSESSE E. (C) PR. CIT VS. WESTERN INDIA SHIPYARDS LTD. (2015) 379 ITR 289 (DEL) IF THERE IS ANY BAR ON AO IN ENTERTAINING CLAIM WITHOU T REVISED RETURN, NO SUCH RESTRAIN IS ON CIT(A) DURING APPELLATE STAGE. ON THE FACTS, LD CIT(A) WAS JUSTIFIED IN ALLOWING B ENEFIT OF DEDUCTION U/S 11 AND 12 OF IT ACT CLAIMED DURING COURSE OF FIRST APP ELLATE STAGE, CONSIDERING THE INSERTION OF FIRST PROVISO TO SECTION 12A(2) AP PLICABLE TO PENDING ASSESSMENTS. 7. THE RELEVANT FINDINGS OF THE LD CIT(A) ARE AS UN DER: 4.3 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE AO AS ALSO ARGUMENTS OF THE LD. AR OF THE APPELLANT. ON PERUSAL OF FACTS & THE I.T. ACT, IT IS SEEN THAT ASSESSEE WAS GRANTED REGISTRATION U/S 12A VIDE LET TER DATED 08.08.2014 W.E.F. 26.03.2014. PROVISO TO SEC. 12A(2) PROVIDES: - ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 17 WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE. PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED T O THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISIONS OF SECTION S 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM PROPERTY HELD UN DER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDING ARE PENDING BEFORE THE ASSESS ING OFFICER AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIV ITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECEDING ASSE SSMENT YEAR. FROM THE ABOVE IT CAN BE SEEN THAT ONCE REGISTRATIO N IS GRANTED U/S 12AA, THE PROVISIONS OF SEC 11 &12 WILL APPLY TO ANY PEND ING ASSESSMENT AS ON THE DATE OF SUCH REGISTRATION. IN THE PRESENT CASE REGI STRATION WAS GRANTED ON 08.08.2014. ON THIS DATE ASSESSMENT FOR A.Y. 12-13 WAS PENDING & THEREFORE BENEFIT OF SECTION 11 &12 IS AVAILABLE TO THE ASSESSEE. SO FAR AS AOS OBSERVATION THAT ASSESSEE HAS NOT CLAIMED DEDU CTION IN RETURN OF INCOME, THEREFORE THE SAME IS NOT ALLOWABLE IN VIEW OF SUPREME COURT DECISION IN 284 ITR 323 (GOETZE INDIA), IS CONCERNE D THE SAME HAS NO RELEVANCE AS THIS DECISION IS NOT APPLICABLE TO APP ELLANT AUTHORITIES. CONSIDERING ALL THESE FACTS THE AO IS DIRECTED TO A LLOW THE BENEFIT OF SEC. 11 TO THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. SIMILAR ISSUE HAS COME UP IN ASSESSEES OWN CASE FOR AY 2011-12 WHERE WE HAVE TAKEN A VIEW THAT WHERE DU RING PENDENCY OF APPEAL BEFORE THE LD CIT(A), THE ASSESSEE WAS GRANT ED REGISTRATION UNDER SECTION 12AA, IT WOULD BE A CASE OF PENDENCY OF ASS ESSMENT PROCEEDINGS AND THE ASSESSEE WOULD BE ELIGIBLE TO CLAIM BENEFIT S OF SECTION 11 AND 12 OF THE ACT. IN THE INSTANT CASE, THE FACTS ARE ON A B ETTER FOOTING AS REGISTRATION WAS GRANTED DURING THE PENDENCY OF ASSESSMENT PROCE EDINGS BEFORE THE AO ITSELF. FURTHER, WE AGREE WITH THE VIEW OF THE LD CIT(A) THAT THE DECISION OF ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 18 HONBLE SUPREME COURT IN CASE OF GOETZE INDIA RELAT ES TO POWERS OF THE AO AND NOT TO THE POWERS OF THE APPELLATE AUTHORITIES AND HENCE, THE SAID DECISION DOESNT SUPPORT THE CASE OF THE REVENUE. THE ASSESSEE HAS MADE THE NECESSARY CLAIM FOR EXEMPTION U/S 11 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE LD CIT(A) HAS RIGHTLY ALLOWED T HE SAME. WE ACCORDINGLY, CONFIRM THE ORDER OF LD CIT(A) ON THIS ACCOUNT AND THE REVENUES GROUND NO. 2 IS DISMISSED. 9. IN RESPECT OF GROUND NO. 3 OF THE REVENUES APPE AL, BRIEFLY THE FACTS OF THE CASE ARE THAT IN THE P&L ACCOUNT, THE ASSES SEE HAS CLAIMED DEPRECIATION OF RS. 1,89,57,668/-. AS PER THE AO, D EPRECIATION HAS BEEN CLAIMED WHEN THE INVESTMENT MADE IN PURCHASE OF FIX ED ASSETS AND OTHER CAPITAL EXPENDITURE HAS ALREADY BEEN ALLOWED IN YEA R OF EXPENDITURE AS APPLICATION OF INCOME U/S 11. IN VIEW OF JUDGMENT O F HONBLE APEX COURT IN THE CASE OF ESCORTS LTD. VS UNION OF INDIA (1993) 1 99 ITR 43 (SC) AND FOLLOWED IN THE CASES OF LISSIE MEDICAL INSTITUTION S VS. CIT (348 ITR 43), CHARANJIV CHARITABLE TRUST 267 CTR 305 (DELHI), A SUM OF RS. 1,89,57,668/- WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 10. THE LD AR SUBMITTED THAT DEPRECIATION IS A STAT UTORY DEDUCTION WHICH IS ALLOWABLE AS PER EXPLANATION 5 TO SECTION 32 OF IT ACT, EVEN IF NOT CLAIMED BY THE ASSESSEE. THE LD. AO HAD PLACED WRONG FACTS BEFORE THIS HONBLE TRIBUNAL THROUGH THIS GROUND OF APPEAL THAT THE ASS ESSEE TRUST WAS ALLOWED APPLICATION OF 100% EXPENDITURE ON CAPITAL ASSET. I T WAS SUBMITTED THAT NO SUCH APPLICATION WAS EITHER CLAIMED BY THE ASSESSEE TRUST IN ANY OF THE EARLIER YEARS OR ALLOWED BY THE LD. AO. COPY OF COM PUTATION OF TOTAL INCOME FOR PRECEDING TWO YEARS (A.Y. 2010-11 AND FOR A.Y 2 011-12) ARE ENCLOSED. IT WILL PROVE THAT NO SUCH DEDUCTION OF APPLICATION ON PURCHASE OF ASSET WAS CLAIMED BY THE ASSESSEE TRUST IN PAST. OTHERWISE AL SO IN NUMBER OF JUDICIAL ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 19 PRONOUNCEMENTS IT HAS BEEN REPEATEDLY HELD EVEN IF ENTIRE COST OF THE ASSET HAS BEEN CLAIMED AS APPLICATION OF TRUST INCOME, AL LOWANCE OF DEPRECIATION (BEFORE INSERTION OF SECTION 11(6) OF IT ACT W.E.F 01.04.2015) WILL NOT BE A DOUBLE DEDUCTION. 11. THE RELEVANT FINDINGS OF THE LD CIT(A) ARE A S UNDER: IN RESPECT OF (F), DEPRECIATION OF FIXED ASSETS, T HE SAME IS ALLOWABLE IN VIEW OF DECISION OF RAJASTHAN HIGH COURT IN CASE OF CIT VS. KRISHI UPAJ MANDI SAMITI, JAISALMER WHEREIN IT HAS HELD THAT IN COMPU TING THE INCOME OF A CHARITABLE TRUST/INSTITUTION, DEPRECIATION OF ASSET S OWNED BY SUCH INSTITUTION IS A NECESSARY DEDUCTION ON COMMERCIAL PRINCIPLES, HENCE, THE AMOUNT OF DEPRECIATION HAS TO BE DEDUCTED TO ARRIVE AT THE IN COME AVAILABLE EVEN THOUGH THAT CAPITAL EXPENDITURE HAS ALREADY BEEN A LLOWED IN THE YEAR UNDER CONSIDERATION. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT, THE DISALLOWANCE OF DEPRECIATION OF RS. 18957668/- MADE BY THE AO IS DELETED. 12. THE SUBJECT ISSUE IS NO MORE RES INTEGRA. AS PER HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT VS. AL-AMEEN CHARITAB LE FUND TRUST (ITA NO. 62 AND 414 OF 2010 VIDE ORDER DATED 22.02.2016), TH E PLAIN LANGUAGE OF THE AMENDMENT BY WAY OF INSERTION OF SUB-SECTION 6 TO S ECTION 11 ESTABLISHES THE INTENT OF THE LEGISLATURE IN DENYING THE DEPREC IATION DEDUCTION IN COMPUTING THE INCOME OF CHARITABLE TRUST IS PROSPEC TIVE IN NATURE WITH EFFECTIVE FROM 1.4.2015. THIS VIEW IS FURTHER SUPPO RTED BY THE NOTES ON CLAUSES IN FINANCE [NO.2] BILL, 2014, MEMO EXPLAINI NG PROVISIONS AND CIRCULARS ISSUED BY THE CENTRAL BOARD OF DIRECT TAX ES IN THIS REGARD. 13. AS RIGHTLY HELD BY THE LD CIT(A), THE MATTER IS COVERED IN FAVOUR OF THE CASE BY THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. KRISHI UPAJ MANDI SAMITI REPORTED IN 388 ITR 605 (RAJ) WHEREIN IT WAS HELD AS UNDER: ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 20 (5) THE ASSESSEE IS A CHARITABLE INSTITUTION REGIS TERED U/S 12A OF THE ACT, 1961 AND 100 PER CENT CAPITAL EXPENDITURE WAS AVAI LED BY IT AGAINST THE ASSET CONCERNED, I.E. A BUILDING. SECTION 32(1) OF THE ACT, 1961 PROVIDES FOR DEPRECATION IN RESPECT OF BUILDING, PLANT AND M ACHINERY OWNED BY THE ASSESSEE AND USED FOR BUSINESS PURPOSES. INCOME OF THE CHARITABLE TRUST LIKE THE PRESENT ASSESSEE DERIVES FROM THE DEPRECIA BLE HEADS IS ALSO LIABLE TO BE COMPUTED ON COMMERCIAL BASIS, HOWEVER, WHILE DOING SO IT IS TO BE KEPT IN MIND THAT ULTIMATELY THE ASSESSEE IS A CH ARITABLE INSTITUTION AND ITS INCOME FOR TAX PURPOSES IS REQUIRED TO BE DETE RMINED BY TAKING INTO CONSIDERATION PROVISIONS OF SECTION 11 OF THE ACT O F 1961 AFTER EXTENDING NORMAL DEPRECIATION AND DEDUCTIONS FROM ITS GROSS INCOME. IN COMPUTING THE INCOME OF A CHARITABLE INSTITUTION/TR UST DEPRECIATION OF ASSETS OWNED BY SUCH INSTITUTION IS A NECESSARY DE DUCTION ON COMMERCIALS, HENCE, THE AMOUNT OF DEPRECIATION HAS TO BE DEDUCTED TO ARRIVE AT THE INCOME AVAILABLE. IN VIEW OF THE DISCUSSIONS MADE ABOVE, WE FIND OUR SELVES IN AGREEMENT WITH THE VIEW TAKEN BY THE BOMBAY HIGH COURT IN DI T (EXEMPTIONS) VS. FRAMJEE CAWASJEE INSTITUTE (SUPRA) AND THE CIT VS. INSTITUTE OF BANKING (SUPRA). THE SUBSTANTIAL QUESTION FRAMED IN THE I NSTANT MATTER , THUS IS ANSWERED IN THE TERMS THAT THE INCOME TAX APPELLAT E TRIBUNAL RIGHTLY ALLOWED DEPRECIATION CLAIMED BY THE ASSESSEE SOCIET Y ON CAPITAL ASSETS FOR WHICH CAPITAL EXPENDITURE WAS ALREADY GIVEN IN THE YEAR UNDER CONSIDERATION. 14. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE KARNATAKA HIGH COURT (SUPRA) WHEREIN THE AMENDMENT TO SECTION 11 (6) HAS BEEN HELD PROSPECTIVE IN NATURE WITH EFFECT FROM 01-04-2015 AND THE HONB LE RAJASTHAN HIGH COURT ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 21 DECISION (SUPRA), THE DEPRECIATION IS HELD ADMISSIB LE TO THE ASSESSEE SOCIETY REGISTERED UNDER SECTION 12AA AND HELD ELIGIBLE FOR EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. IN THE RESULT, THE GROUND NO . 3 OF THE REVENUES APPEAL IS DISMISSED. 15. IN RESPECT OF GROUND NO. 4 OF THE REVENUES APPEAL, THE AO HAS DISALLOWED DONATION AND CHARITY OF RS 18,039 ON GRO UND OF LACK OF EVIDENCE AND FACT THAT THE CLAIM OF EXEMPTION UNDER SECTION 11 WAS REJECTED. 16. IT WAS SUBMITTED BY THE LD AR THAT IN ADDITION TO T HE EDUCATION, CHARITY AND DONATIONS IS ALSO OBJECT OF THE ASSESSE E TRUST. BOOKS OF ACCOUNTS OF THE ASSESSEE TRUST ARE AUDITED U/S 44AB OF IT ACT AND THE ISSUE WAS ALSO EXAMINED BY THE AUDITORS. OTHERWISE ALSO, THE SAME IS WITHIN LIMIT OF 15% OF GROSS RECEIPTS OF RS. 10,10,74,418/- AS P ROVIDED UNDER SECTION 11(1) OF IT ACT, NOT LIABLE TO TAX. 17. AS WE HAVE HELD ABOVE, THE ASSESSEE IS ELIGIBLE FOR CLAIM OF BENEFIT UNDER SECTION 11 AND 12 OF THE ACT. WE ACCORDINGLY SET ASIDE THIS MATTER TO THE FILE OF THE AO TO EXAMINE THE CLAIM OF THE ASSE SSEE THAT IT IS WITHIN LIMITS OF 15%. THE ASSESSEE IS ALSO DIRECTED TO SUBMIT TH E NECESSARY EVIDENCE IN SUPPORT OF THE SAID CLAIM TO THE SATISFACTION OF TH E AO. IN THE RESULT, GROUND NO. 4 OF REVENUES APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. 18. IN RESPECT OF GROUND NO. 5 OF THE REVENUES APPEAL AND ASSESSEES GROUND OF APPEAL NO. 3(II), IT WAS SUBMITTED BY THE LD AR THAT THE AO MADE ADDITION OF RS. 20,00,000/- ON ACCOUNT OF DEFECT IN VOUCHERS UNDER THE HEAD BUILDING CONSTRUCTION ACCOUNT WHICH WAS NOT CLAIMED AS REVENUE EXPENSES BUT CAPITAL EXPENSES. EVEN BEFORE APPLYING PROVISIO NS OF SECTION 145(3) OF IT ACT, NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE . CONSIDERING THE FACT THAT LD. AO DID NOT POINTED OUT SPECIFIC AND THE PA YMENTS WERE SUBJECTED TO TDS U/S. 194C OF IT ACT, LD. CIT(A) REDUCED THE ADD ITION TO RS. 5,00,000/- ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 22 AS FOR MINOR DEFECTS NO SUCH ADDITION COULD BE MADE . SURPRISINGLY WHEN THE ASSESSEE TRUST DID NOT CLAIM THESE PAYMENTS AND EXP ENSES AS REVENUE PAYMENTS, LD. AO MADE ADDITION OF RS. 20,00,000/- A ND THE LD. CIT(A) WITHOUT CONSIDERING THE NATURE SUSTAINED IT TO RS. 5,00,000/-. 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. IT IS ASSESSEES CONTENTION T HAT THE EXPENSES DISALLOWED AND PARTLY SUSTAINED BY THE LD CIT(A) HA VE NOT BEEN CLAIMED AS REVENUE EXPENDITURE DURING THE YEAR. THERE IS NO F INDING RECORDED BY THE AO OR LD CIT(A) IN THIS REGARD. WE ACCORDINGLY SET ASIDE THIS MATTER TO THE FILE OF THE AO TO EXAMINE THE SAID CONTENTION OF TH E ASSESSEE AND DECIDE THE MATTER A FRESH AS PER LAW. IN THE RESULT, BOTH THE GROUNDS OF REVENUE AND ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 20. NOW COMING TO THE ASSESSEES APPEAL, IN RESPECT OF GROUND NO. 1 OF THE ASSESSEES APPEAL, IT WAS SUBMITTED BY THE LD A R THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITIO NS OF RS. 42,13,871/- ON ACCOUNT OF PRESUMED INTEREST @ 12% P.A. FOR WHICH L D. AO APPLIED PROVISIONS OF SECTION 13(1)(C)(II) R.W.S 13(2)(G) O F IT ACT ON OUTSTANDING BALANCES OF THE FOLLOWING PERSONS/INSTITUTIONS TO W HOM EITHER NO MONEY WAS ADVANCED OUT OF CURRENT YEARS RECEIPTS OR MINOR SU M WAS ADVANCED IN ONE CASE AS PER FOLLOWING DETAILS: MONEY ADVANCED TO BALANCE (31.03.2011) BALANCE (31.03.2012) DURING THE YEAR ADDITIONS SUSTAINED MRS. PRATIMA PANWAR 5,72,440 5,72,440 NIL 68,692 MR. KIRAN SINGH 7,00,000 7,00,000 NILL 84,000 PRIME LOCATION DEV.P.LTD. 2,89,67,745 2,89,67,745 N ILL 34,76,129 NIRMAL PANWAR FINANCE P. LTD. 42,33,751 35,33,751 N IL 84,000 AMBASSY TOURISM DEV. P. LTD. 33,75,000 41,75,000 8, 00,000 5,01,000 ADDITION SUSTAINED BY LD. CIT(A) (FOR WHICH LD. AO APPLIED SEC. 13(1)(C)(II) R.W.SEC. 13(2)(G) 42,13,821 ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 23 20.1 IT WAS FURTHER SUBMITTED THAT THE ASSESSMENT FOR IMMEDIATELY PRECEDING ASSESSMENT YEAR (A.Y 2011-12) WAS COMPLET ED UNDER SECTION 143(3) OF IT ACT IN WHICH NO ADDITION WAS MADE U/S SEC. 13(1)(C)(II)/13(2)(G) OF IT ACT ON ADVANCES TO MAJO RITY OF THE SAME DEBTORS B/F. IN YEAR UNDER APPEAL, CONSIDERING NATURE OF AD VANCES NOT COVERED U/S 13(3) OF IT ACT AND INTEREST FREE FUNDS AVAILABLE W ITH ASSESSEE TRUST. HOWEVER, IN THE YEAR UNDER APPEAL, IN AVOIDANCE OF THE FACT THAT MAJOR ADVANCES ARE B/F BALANCES OF PRECEDING YEAR AND ASS ESSEE TRUST HAD INTEREST FREE UNSECURED LOANS OF RS. 49,69,466/-, L D. AO MADE ADDITION OF RS. 42,13,821/- EQUAL TO 12% AS PRESUMED INTEREST. SUCH ADDITION IS INCLUSIVE OF RS. 34,76,129/- FOR ADVANCE TO PRIME L OCATION DEV. PVT. LTD. FOR PURCHASE OF LAND FOR EXPANSION OF EDUCATIONAL BUILD ING. 21. THE RELEVANT FINDINGS OF THE LD CIT(A) ARE AS UNDER: 6.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, FINDINGS OF THE AO AND SUBMISSION OF THE APPELLANT. REGARDING ADDITIO N MADE IN RESPECT OF GROUND 3 (A TO E), IT IS SEEN THAT THE ASSESSEE DUR ING ASSESSMENT PROCEEDINGS HAS NOT GIVEN ANY JUSTIFICATION SUPPORT ED BY EVIDENCE TO PROVE THAT THE ADVANCE GIVEN TO VARIOUS PERSONS ARE FOR T HE BENEFIT OF THE TRUST. THEREFORE THE ACTION OF AO IN ASSESSING NOTIONAL IN TEREST INCOME IS CONFIRMED. ACCORDINGLY ADDITION OF (68692+84000+3476129+84000+501000) RS. 4213871/- IS CONFIRMED. FURTHER NO DEDUCTION U/S 11 WILL BE ALLOWABLE WITH RESPECT TO THESE ADDITIONS. 22. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED TH E MATERIAL AVAILABLE ON RECORD. THE PRINCIPAL CONTENTION RAISED BY THE LD AR IS THAT EXCEPT FOR AN AMOUNT OF RS 8,00,000, NONE OF THE AMOUNTS HAVE BEE N ADVANCED OR INVESTED DURING THE RELEVANT PREVIOUS YEAR AND HENC E, THE ACTION OF THE AO IS NOT JUSTIFIED. IN ORDER TO ADDRESS THIS CONTENT ION, THE RELEVANT PROVISIONS ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 24 INVOKED BY THE AO AND ITS APPLICABILITY IN RESPECT OF EACH OF THE TRANSACTIONS WOULD REQUIRE EXAMINATION. . 23. IT IS NOTED THAT THE AO HAS INVOKED THE PROVISION S OF SECTION 13(1)(C)(II) R.W.S 13(2)(G) OF ACT IN RESPECT OF TR ANSACTION WITH PRATIMA PAWAR AND KIRAN SINGH. ON PERUSAL OF THESE PROVISI ONS, IT IS NOTED THAT 13(1)(C)(II) PROVIDES THAT NOTHING CONTAINED IN SEC TION 11 OR SECTION 12 SHALL OPERATE AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF, ANY INCOME THEREOF IF AN Y PART OF SUCH INCOME OR ANY PROPERTY OF THE TRUST OR THE INSTITUTION IS DUR ING THE PREVIOUS YEAR USED OR APPLIED DIRECTLY OR INDIRECTLY FOR THE BENEFIT O F ANY PERSON REFERRED TO IN SECTION 13(3). THE EMPHASIS THEREFORE IS ON RECEIP T OF INCOME BY THE ASSESSEE DURING THE PREVIOUS YEAR AND USE OF SUCH I NCOME DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF INTERESTED PERSON DUR ING THE PREVIOUS YEAR. THE ACTION U/S 13(1)(C)(II) THEREFORE LIES IN THE YEAR OF RECEIPT AND UTILISATION OF SUCH INCOME. FURTHER, SECTION 13(2)(G) ALSO PROVID ES THAT IF ANY INCOME OR PROPERTY OF THE TRUST OR INSTITUTION IS DIVERTED DU RING THE PREVIOUS YEAR IN FAVOUR OF THE PERSON REFERRED TO IN SECTION 13(3). THE ACTION U/S 13(2)(G) THEREFORE LIES IN THE YEAR OF DIVERSION OF INCOME I N FAVOUR OF INTERESTED PERSON. IN LIGHT OF THE SAME, GIVEN THAT NO AMOUN T HAS BEEN ADVANCED TO PRATIMA PAWAR AND KIRAN SINGH DURING THE YEAR UNDER CONSIDERATION, THERE IS NO CAUSE OF ACTION THAT LIES UNDER SECTION 13(1)(C) (II) R.W.S 13(2)(G) OF ACT AND HENCE, THE ADDITION MADE IN THIS REGARD IS DELE TED. 24. IN RESPECT OF PRIME LOCATION DEVELOPERS LTD, THE AO HAS INVOKED PROVISIONS OF SECTION 13(1)(C)(II) R.W.S 13(2)(G) A ND SECTION 11(5) OF ACT. THE AO HAS STATED IN HIS ORDER THAT THE ASSESSEE IS MAKING PAYMENT SINCE AY 2007-08 AND UPTO YEAR UNDER CONSIDERATION AND TH E PAYMENT HAS REACHED TO A LEVEL OF RS 2,89,67,745 FOR WHICH NO I NTEREST HAS BEEN ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 25 CHARGED. PER CONTRA, THE LD AR HAS SUBMITTED THAT NO PAYMENT HAS BEEN MADE DURING THE YEAR. IN VIEW OF THE CONFLICTING F ACTS AND NO FURTHER MATERIAL AVAILABLE ON RECORD, WE ARE UNABLE TO TAKE A VIEW IN THE MATTER. FURTHER, THERE IS NO FINDING AS TO HOW THE PROVISIO NS OF SECTION 11(5) ARE ATTRACTED IN THE INSTANT CASE. THE MATTER IS ACCOR DINGLY SET-ASIDE TO THE FILE OF THE AO TO EXAMINE THE SAME AFRESH TAKING INTO CO NSIDERATION THE DISCUSSION IN PARA 23 ABOVE. 25. IN RESPECT OF EMBASSY TOURISM DEVELOPERS PVT LTD, THE AO HAS INVOKED THE PROVISIONS OF 13(1)(D)(I), 13(1)(D)(III) READ W ITH SECTION 13(2)(G) OF THE ACT. THE LD AR HAS SUBMITTED THAT ONLY AN AMOUNT OF RS 8,00,000 HAS BEEN PAID DURING THE YEAR TOWARDS SHARE APPLICATION MONE Y IN M/S EMBASSY TOURISM DEVELOPMENT PVT LTD AND NO INCOME HAS ACCRU ED DURING THE YEAR WHICH CALL FOR DISALLOWANCE. FURTHER, THE SHARES HA VE BEEN ALLOTTED IN FY 2014-15. IN OUR VIEW, SIMILAR ANALOGY WILL APPLY IN RESPECT OF THESE PROVISIONS AS WE HAVE DISCUSSED IN RESPECT OF SECTI ON 13(1)(C)(II) IN PARAGRAPH 23 ABOVE. WHAT IS RELEVANT TO EXAMINE IS THE YEAR IN WHICH THE MONEY HAS BEEN INVESTED OR SHARES HAVE BEEN BROUGHT OTHERWISE THAN IN THE PRESCRIBED MODE AND INCOME ARISING THEREFROM DU RING THE PREVIOUS YEAR. IN ABSENCE OF ANY FINDING OF THE AO IN THIS REGARD, THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE AO TO EXAMINE THE SAME AFRESH TAKING INTO CONSIDERATION THE ABOVE DISCUSSIONS. SIMILARLY, TH E MATTER RELATING TO TRANSACTION WITH NIRMAL PANWAR FINANCE PVT LTD IS A LSO SET ASIDE TO THE FILE OF THE AO WHERE THE AO HAS INVOKED THE SIMILAR PROV ISIONS. IN THE RESULT, GROUND NO. 1 OF THE ASSESSEES APPEAL IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. 26. IN RESPECT OF GROUND NO. 2 OF THE ASSESSEES APPE AL IN RESPECT OF DENYING THE DEDUCTION U/S 11, FIRSTLY, IN RESPECT O F ADDITION OF RS. ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 26 42,13,821/- AS PER GROUND NO. 1, SINCE WE HAVE SET ASIDE THE GROUND NO. 1 TO THE FILE OF THE AO, THIS GROUND NO. 2(I) IS ALSO SET-ASIDE TO THE FILE OF THE AO. 27. IN RESPECT OF ADDITION OF RS. 26,260/- SUSTAI NED U/S 40(A) (IA) OF IT ACT, SINCE THE ASSESSEE IS HELD ELIGIBLE FOR DEDUCT ION U/S 11 AND 12 OF THE ACT AS WE HAVE DISCUSSED ABOVE, THE PROVISIONS OF S ECTION 40(A)(IA) OF IT ACT ARE NOT ATTRACTED AS THE SAME ARE RESTRICTED TO INCOME CHARGEABLE UNDER THE HEAD PROFIT AND GAINS FROM BUSINESS OR PROFESS ION. SIMILAR VIEW HAS BEEN TAKEN BY THE COORDINATE BENCH IN CASE OF ITO V S. HARYANA STATE COUNSELLING SOCIETY (2016) 179 TTJ (CHENNAI) 660. IN THE RESULT, GROUND NO. 2(II) IS ALLOWED. ITA NO. 378/JP16 & 295/JP/16 FOR AY 2007-08, ITA NO . 897/JP16 & 851/JP/16 FOR AY 2008-09, ITA NO. 898/JP16 & 852/JP /16 FOR AY 20013-14 28. IN RESPECT OF CROSS APPEALS FOR AY 2007-08, 2008- 09 AND AY 2013-14, BOTH PARTIES AGREED THAT THE FACTS ARE PARI-MATERIA AND SIMILAR GROUNDS OF APPEAL HAVE BEEN RAISED BY THE REVENUE AS WELL AS A SSESSEE SOCIETY AS IN ITA NO. 379/JP/16 AND 296/JP/16 DECIDED SUPRA. IN VIEW OF THE SAME, OUR OBSERVATIONS AND DECISION IN 379/JP/16 AND 296/JP/1 6 SHALL APPLY MUTATIS- MUTANDIS TO THESE CROSS APPEALS AS WELL. WITH THE ABOVE DIRECTIONS, THE APPEALS FILED BY THE REVENUE AND THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED IN THE OPEN COURT ON 23/06/2017. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 379,296,378,295,851,897,852 & 898/JP/2016 ACIT (E) VS. M/S SHYMA LAL PANWAR ANANDI DEVI MEMOR IAL CHARITABLE TRUST, JAIPUR. 27 JAIPUR DATED:- 23/06/2017 SANTOSH VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ACIT(E),CIRCLE, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S SHYMA LAL PANWAR ANANDI DEVI MEMORIAL CHARITABLE TRUST, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, 6. XKMZ QKBZY@ GUARD FILE (ITA NO.379,296,378,295,851,897,852 & 898/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR .