SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, Ajmer V. ITO, Ajmer

ITA 53/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5141 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 18-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Assessee Lawyers: SUBHASH PORWAL
• Keywords: Unexplained cash credit; Revenue expenditure; Capital expenditure
• Section: 80G; 12AA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 53 & 54/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 & 2008-09 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST SARI BASTI, BRAHMA GHAT, PUSHKAR AJMER CUKE VS. THE ITO (EXEMPTION) AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAITS 6911 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI SUBHASH PORWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/08/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29 /08/2016 VKNS'K@ ORDER PER BHAGCHAND, AM BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A), AJMER DATED 11- 12-2015 FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 RAISING THEREI N FOLLOWING GROUNDS OF APPEAL. ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 2 ITA NO. 53/JP/2016 A.Y. 2007-08 THAT UNDER THE FACTS OF THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN:- (1) RESTRICTING THE TOTAL CAPITAL EXPENDITURE CLAIM ED OF RS. 6,92,735/- TO RS. 4,36,209/- ONLY FOR APPLIC ATION OF SURPLUS U/S 11(2) (2) RESTRICTING THE VARIOUS REVENUE EXPENSES MEANT FOR OBJECT OF TRUST OF RS. 3,23,282/- OUT OF CLAIM OF RS. 6,32,032/- ITA NO. 54/JP/2016 A.Y. 2008-09 THAT UNDER THE FACTS OF THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN:- (1) RESTRICTING THE TOTAL CAPITAL EXPENDITURE CLAIM ED OF RS. 2,67,167/- TO RS. 1,87,718/- ONLY FOR APPLIC ATION OF SURPLUS U/S 11(2) (2) RESTRICTING THE VARIOUS REVENUE EXPENSES MEANT FOR OBJECT OF TRUST OF RS.4,47,305/- OUT OF CLAIM OF RS. 6,67,505/- (3) CONSIDERING THE CASH RECEIPTS OF RS. 5,000/- FROM SHYAM DHARMAWAT ON 04-02-2008 AS UNEXPLAINED C REDIT. 2.1 FIRST OF ALL, I TAKE UP THE GROUNDS OF APPEAL O F THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 FOR ADJUDICATION. 3.1 IN GROUND NO. 1, THE ASSESSEE IS AGGRIEVED THAT THE LD. CIT(A) HAS ERRED IN RESTRICTING THE TOTAL CAPITAL EXPENDITURE CLAIMED OF RS. 6,92,735/- TO RS. 4,36,209/- ONLY FOR APPLICATION OF SURPLUS U /S 11(2) OF THE ACT. THE ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 3 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD CLAIMED TO HAVE MADE THE FOLLOWING CAPITAL EXPENDITURE/ INVESTMENT. ELECTRIC GOODS RS. 2,005/- CONSTRUCTION OF LAND RS. 6,26,184/- MISC. INSTRUMENT RS. 1,046/- MOBILE PHONE RS. 7,450/- UTENSILS RS. 55,750/- TOTAL RS. 6,92,735/- THE AO NOTICED THAT THE ASSESSEE HAD SUBMITTED SELF MADE VOUCHERS OF ELECTRIC GOODS LIKE HOLDERS, STARTER, CHOWK AND FAN S WITHOUT MENTIONING THE NAME OF DEALERS, QUANTITY OF ITEM AND RATE OF T HE ITEMS WHICH WAS NOT RELIED UPON BY THE AO AND HE DID NOT CONSIDER THESE ITEMS OF CAPITAL NATURE. THE ASSESSEE ALSO PRODUCED THE SELF MADE VO UCHERS FOR PURCHASE OF UTENSILS OF RS. 55,750/- ON 26-03-2007 AND PURCH ASE OF MOBILES OF RS. 7,450/- BUT NO DETAILS WERE PROVIDED TO THE AO LIKE NAME OF THE DEALER, QUANTITY AND RATE OF THE MOBILES. THE AO OBSERVED T HAT THE ASSESSEE HAD SUBMITTED A CONSTRUCTION ACCOUNT WITHOUT ANY SUPPOR TING BILLS/ VOUCHERS THERETO AND THE DETAILS OF SUCH AMOUNT INCURRED IN CONSTRUCTION ACCOUNT IS MENTIONED IN THE ASSESSMENT ORDER BY THE AO BUT AS PER THE AO THE DETAILS MENTIONED BY THE ASSESSEE DID NOT FALL UNDE R THE CATEGORY OF CAPITAL EXPENDITURE. HENCE, THE CLAIM OF THE ASSESS EE FOR UTILIZATION OF THE ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 4 FUNDS TO THE EXTENT OF RS. 6,92735/- TOWARDS CAPITA L EXPENDITURE/ INVESTMENT WAS DISALLOWED BY THE AO ON THE GROUND T HAT GENUINENESS OF THE EXPENDITURE WAS NOT VERIFIABLE. 3.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAS RESTRICTED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS. 2,56,526/- BY OBSERVING AS UNDER:- 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STATEMENT OF FACT, GROUNDS OF APPEAL AND WRITTEN SU BMISSION CAREFULLY. IT IS SEEN THAT THE EXPENSES OF RS. 4,36 ,209/- (RS. 373009+RS. 7450+RS. 55570) WERE PAID BY CHEQUE. HOWEVER, THE ITO EXEMPTION-1 IN HIS REMAND REPORT H AS MENTIONED THAT OUT OF TOTAL CONSTRUCTION EXPENSES O F RS. 6,26,183/-, THE ASSESSEE HAS NOT PRODUCED ANY EVIDE NCE IN SUPPORT OF THE EXPENSES OF RS. 1,66,553/- (RS. 6261 84 - RS. 439625). I AM OF THE VIEW THAT ONLY THE CONSTRUCTIO N EXPENSES OF RS. 3,73,00/-, PAYMENT OF WHICH HAVE BE EN MADE THROUGH CHEQUE, IS ALLOWABLE AS CAPITAL EXPENDITURE OUT OF THE TOTAL CAPITAL EXPENDITURE OF RS. 6,26,184/- CLAIMED FOR THE CONSTRUCTION. FURTHER, THE CLAIM OF THE ASSESSEE FO R EXPENSES OF RS. 7,450/- IN RESPECT OF MOBILE PHONE AD RS. 5 5,750/- IN RESPECT OF PURCHASE OF UTENSILS IS ALSO ALLOWED AS THE PAYMENT OF THESE EXPENSES HAVE ALSO BEEN MADE IN CH EQUE. THE AO IN THE ASSESSMENT ORDER HAS MENTIONED THAT P AYMENT OF RS. 7,450/- FOR PURCHASE OF MOBILE PHONE AND PAY MENT OF RS. 55,750/- FOR PURCHASE OF UTENSILS HAVE BEEN MAD E IN CASH BUT FROM THE BANK STATEMENT FILED BY THE APPELLANT, IT IS SEEN THAT THESE PAYMENTS WERE MADE THROUGH CHEQUE. THUS, OUT OF TOTAL CAPITAL EXPENDITURE OF RS. 6,92,735/- CLAIMED BY THE APPELLANT, EXPENDITURE OF RS. 4,36,209/-(RS. 373009+RS7450+RS. 55750) IS ALLOWABLE AS CAPITAL EXPENDITURE AND THE REMAINING AMOUNT OF RS. 2,56,52 6/- (RS. 6,92,735 RS. 4,36,209) IS DISALLOWED. ACCORDINGLY , THE SUM ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 5 OF RS. 2,56,526/- WILL NOT BE CONSIDERED AS APPLICA TION OF INCOME FOR CAPITAL INVESTMENT IN TERMS OF SECTION 1 1(2) OF THE I.T. ACT. 3.3 NOW THE ASSESSEE IS IN APPEAL BEFORE ME WITH TH E PRAYER THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE AMOUNT TO THE EXTE NT OF RS. 2,56,526/-. THE LD. AR OF THE ASSESSEE ALSO FILED THE WRITTEN S UBMISSION TO THIS EFFECT WHICH HAS ALSO BEEN TAKEN INTO CONSIDERATION. 3.4 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 3.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTICED FROM THE ASSESSM ENT ORDER THAT THE AO HAD DISALLOWED THE EXPENSES TO THE EXTENT OF RS. 6, 92,735/- AS THE ASSESSEE WAS NOT ABLE TO PROVIDE PROPER BILLS OF THE PARTIES DURING ASSESSMENT PROCEEDINGS AND THEY WERE SELF MADE VOUCHERS AS MEN TIONED BY THE AO IN THE ASSESSMENT ORDER. THE LD. CIT(A) HAS DISALLOWED THE SAME TO THE EXTENT OF RS. 2,56,526/-. IT IS NOTICED FROM THE D ETAILS FILED BY THE LD. AR OF THE ASSESSEE THAT ALL MAJOR EXPENSES HAD EITHER BEEN PAID THROUGH CHEQUE OR CONTAINED BILL NO. & NAME OF SUPPLIER & D ULY APPROVED BY AUTHORITY. THE BRIEF ANALYSIS AS MENTIONED BY THE L D. AR OF THE ASSESSEE IS AS UNDER:- ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 6 S.NO. CAPITAL GOODS AMOUNT (RS.) DETAILS OF PAYMENTS 1 ELECTRIC GOODS 2005.00 CASH PAID 2 CONST. ON LAND 6,26,184.00 MOST OF THE PAYMENTS A RE THROUGH CHEQUES AS MARKED RED IN DETAILS. FURTHER BUILDING IS SUCH AN ASSET CAN BE PHYSICALLY VERIFIED. ALL VOUCHERS SEEN BY A.O. SIGNED. 3 MISC. INSTRUMENTS 1046.00 CASH PAID 4 MOBILE PHONE 7450.00 PAID BY CHEQUE NO. 611452 FO R BILL NO. 2493873 DATE 13.03.2007. 5 UTENSILS 55750.00 PAID BY CHEQUE NO. 31668 TO M/S ASHOK UTENSILS. AJMER DATED 26.03.2007 TOTAL 692435.00 THE LD. AR FURTHER SUBMITTED THAT THUS MERELY VOUCH ERS ARE INTERNAL AND NOT DULY SUPPORTED BY PARTYS BILL CANNOT BE THE SO LE ISSUE TO REJECT THE CLAIM OF ASSESSEE. IT IS ALSO OBSERVED THAT ELECTRI C EXPENSES LIKE TUBE, LIGHT, HOLDER, CHALK ETC. ARE SUCH PETTY EXPENSES A ND ITS PAYMENTS ARE NOT GENERALLY MADE BY CHEQUE. IT IS ALSO NOTICED THAT I N CASE OF CONSTRUCTION, THE BUILDING MATERIALS LIKE LIME, BAZRI ETC ARE PUR CHASED BY THE PARTY ON CASH BASIS AND LABOUR ARE HIRED AND THEY ARE PAID C ASH WAGES FOR THE WORK DONE ON DAILY BASIS. HENCE, IN SUCH A SITUATION, I T IS NOT JUSTIFIED TO DISALLOW THE EXPENSES BY THE LD. CIT(A) TO THE EXT ENT OF RS. 2,56,526/- . AND THE SAME IS DIRECTED TO BE DELETED. THUS GROUN D NO. 1 OF THE ASSESSEE IS ALLOWED. ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 7 4.1 IN GROUND NO. 2, THE ASSESSEE IS AGGRIEVED THAT THE LD. CIT(A) HAD DISALLOWED THE EXPENSES TO THE EXTENT OF RS. 3,08,7 50/-. BRIEF FACTS IN THIS GROUND OF APPEAL AS PER THE AO IS THAT THE ASSESSEE HAD SHOWN INCOME OF RS. 13,96,913/- AND AFTER CLAIMING EXPENSES OF RS., 6,32,032/-, THE SURPLUS OF RS. 7,64,881/-HAD BEEN DECLARED BY THE ASSESSEE. THE AO VIDE ORDER SHEET ENTRY DATED 25-11-2011 ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND BILLS/VOUCHERS OF EXPENSES BUT THE ASSE SSEE HAD FAILED TO SUBMIT THEM FOR VERIFICATION BEFORE THE DEPARTMENT. THE AO THUS OBSERVED THAT THE ASSESSEE HAD NOT SUBMITTED THE CO MPLETE LEDGER ACCOUNTS OF VARIOUS EXPENSES. ONLY A FEW LEDGER ACC OUNT OF EXPENSES HAD BEEN SUBMITTED IN WHICH THE AO DURING SCRUTINY OBSE RVED AS UNDER:- (I) THE ASSESSEE DEBITED THE EXPENSES OF RS. 1,3,75 0/- UNDER THE HEAD INTEREST BUT IN THE LEDGER ACCOU NT THE SAME HAS BEEN MENTIONED AS INTEREST TO MOTIVATION (COMMISS ION) AND SUCH COMMISSION WAS ALSO PAID TO SHRI VIMAL KUMAR A ND SHRI SHYAM SUNDER WHO ARE TRUSTEE AS MENTIONED IN THE OR DER OF HON'BLE CIT, AJMER DATED 28-12-2011. THUS, THE TRUST HAS VI OLATED THE PROVISION OF SECTION 13(2) AND THE EXPENDITURE IS N OT ALLOWABLE WHICH IS NOT IN EXPEDIENCY OF CHARITABLE ACTIVITIES . (II) ON GOING THROUGH THE LEGAL ACCOUNT OF LEGAL EX PENSES, IT IS SEEN THAT A SUM OF RS. 1,000/- ON 3-08-2006 P AID TO SHRI LADU RAM SHARMA FOR AUDIT WORK WHO IS THE TRUSTEE. THUS THE TRUSTEE HAS VIOLATED THE PROVISION OF SECTION 13(2) AND THE EXP ENDITURE IS NOT ALLOWABLE WHICH IS NOT IN EXPEDIENCY OF CHARITABLE ACTIVITIES. ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 8 THE AO FURTHER OBSERVED THAT THE GENUINENESS OF TH E EXPENSES CLAIMED IN THE INCOME AND EXPENDITURE ACCOUNT WERE NOT VERIFIA BLE AND THUS OUT OF TOTAL EXPENDITURE CLAIMED OF RS. 632,032/- BY THE A SSESSEE , THE AO ALLOWED RS. 451/- BEING BANK CHARGES AND DISALLOWE D A SUM OF RS. 6,31,581/- BY ADDING THE SAME TO THE INCOME OF THE ASSESSEE. 4.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAD RESTRICTED THE EXPENSES TO THE EXTEN T OF RS. 3,23,282/- BY OBSERVING AS UNDER:- 6.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STATEMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN S UBMISSION CAREFULLY. IT IS SEEN THAT THE AO HAS DISALLOWED TH E CLAIM OF THE APPELLANT FOR CLAIM OF REVENUE EXPENDITURE OF RS. 6 ,31,581/- MAINLY ON THE GROUNDS THAT THE ASSESSEE COULD NOT P RODUCE BILLS AND VOUCHERS IN SUPPORT OF THE EXPENDITURE. THE EXPENSE S CLAIMED BY THE APPELLANT IN INCOME AND EXPENDITURE ACCOUNT ARE MAINLY GENERAL EXPENSES WHICH ARE REQUIRED TO BE INCURRED FOR SUCH TYPE OF TRUST. THE CONTENTION OF THE APPELLANT THAT SOME OF SUCH E XPENSES, PROPER VOUCHERS CANNOT BE MAINTAINED, CAN ALSO NOT BE REJE CTED FULLY. HOWEVER, IN VIEW OF THE FINDING GIVEN BY THE AO IN THE ASSESSMENT ORDER AND THE REMAND REPORT THE EXPENSES OF RS. 1,3 3M750/- BEING THE AMOUNT INCURRED AS INTEREST PAID TO SHRI VIMAL KUMAR AND SHRI SHYAM SUNDER, WHO ARE TRUSTEES ALSO, CANNOT BE ALLO WED AS DEDUCTION. HENCE, THE EXPENSES OF RS. 1,33,750/- IS DISALLOWED. FURTHER IN VIEW OF THE FACTS THAT FOR SOME EXPENSES , NO SUPPORTING VOUCHERS ARE MAINTAINED AND FOR SOME EXPENSES, ONLY INTERNAL VOUCHERS ARE MAINTAINED. A FURTHER DISALLOWANCE OF SUM OF RS. 1,75,000/- IS MADE. ACCORDINGLY, OUT OF THE TOTAL R EVENUE EXPENSES OF RS. 6,32,032/-, EXPENSES OF RS. 3,08,750/- (RS. 133750+RS. 175000) IS DISALLOWED AND THE EXPENSES OF RS. 3,23, 282/- ONLY ARE ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 9 ALLOWED AS REVENUE EXPENDITURE HAVING BEEN INCURRED FOR THE OBJECT OF THE TRUST. 4.3 NOW THE ASSESSEE IS IN APPEAL AND THE LD. AR OF THE ASSESSEE DURING THE COURSE OF HEARING PRAYED FOR DELETION OF THE EX PENSES AND SUBMITTED HIS WRITTEN SUBMISSION ALONGWITH CASE LAWS AS UNDE R:- (1) THAT COMPLETE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE A.O. & HAVE BEEN INITIALED AT MANY PLACE S BY SAID A.O. WHILE EXAMINING THE VOUCHERS & EVIDENCES. (2) ONLY ON REPETITIVE REQUEST FOR VERIFICATION OF BOOKS ON ALL HEARINGS HELD THE ASSESSEES TRUSTEE HAVE OBJEC TED FOR SAID REQUEST & HAVE SUBMITTED THAT WHEN NEEDFUL DETAILS ALREADY SUBMITTED & VERIFIED BY YOUR HONOUR, THERE SHOULD N OT BE REPETITIVE REQUEST. (3) COMPLETE LEDGER HEAD OF EXPENSES & COPIES OF VOUCHERS WERE SUBMITTED BEFORE A.O. DURING ASSESSME NT PROCEEDINGS AS WELL AS DURING RENEWAL PROCESS OF EX EMPTION U/SEC. 80(G) FOR SUBMISSION OF A.O.S REPORT, NO SPECIFIC DEFECTS HAVE BEEN NOTED THEREON. THE A.O. HAS NOT POINTED OUT FO R A SINGLE EXPENDITURE AS INCURRED AGAINST OBJECT OF TRUST OR FOR BENEFIT OF TRUSTEES TO HIS CLAIM OF DISALLOWANCES. (4) FURTHER INCASE OF RS. 133750/- BEING EXPENDITUR E INCURRED ON A/C OF INTEREST TO MOTIVATORS (COMMISS ION) IN FOR COMMISSION / SHARE OF PANDAS / PUJARIS WHO COLLECTS THE CHARITTIES FOR AND ON BEHALF OF TRUST & AS PER TRUST DEED & REGULATION ARE ENTITLED FOR THEIR SHARE OUT OF IT. (5) SINCE ALL TRUSTIES, MEMBER OF TRUST ARE FIRST P ANDAS / PUJARIS & ARE ENTITLED TO COLLECT THE CHARITIES FOR TRUST, HENCE LIABLE TO GET THEIR SHARE AS THEIR LIVELIHOOD (REMUNERATIO N) & THIS IS NOT A BENEFIT PASSED DIRECTLY / INDIRECTLY U/SEC. 13(1)(C ) TO TRUSTIES AS ALLEGED BY A.O. ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 10 REFER DIT (EXEMPTION) V/S MANAV BHARATI CHILD INSTITUTE & CHILD PSYCHOLOGY (2008) 20 SOT 517 (DELHI) . WHERE IT HAS BEEN HELD THAT WHERE ANY AMOUNT IS P AID BY WAY OF SALARY, ALLOWANCE OR OTHERWISE DURING PREVIO US YEAR TO ANY INTERESTED PERSON OUT OF THE RESOURCES OF THE TRUST (OR INSTITUTION) FOR SERVICES RENDERED BY THAT PERSON TO SUCH TRUST AND THE AMOUNT SO PAID IS MORE THAN WHAT MAY BE REASONABLY PAID FOR S UCH SERVICES (SECTION 13(2) (C)), THERE IS NO PROHIBITION TO REM UNERATE INTERESTED PERSON BUT SUCH REMUNERATION SHOULD BE COMMENSURATE WITH SERVICES RENDERED BY HIM. (6) SIMILARLY RS. 1,000/- PAID TO LADU RAM SHARMA O N 03.08.06 FOR AUDIT WORK, IS ACTUALLY REIMBURSEMENT OF EXPENSES TO LADU RAM (TRUSTEE) FOR AUDIT WORK, SINCE PAYMENT MA DE THROUGH HIM HENCE HIS NAME MENTIONED ACTUALLY IT IS NOT PAY MENT TO HIM. (7) THUS MERELY FOR NON VERIFICATION OF EXPENSES TH E A.O. CANNOT ALLEGED TO DISALLOW SAID EXPENSES, THE A.O. IS TO LOOK INTO THE GENUINENESS AND REASONABILITY (IN BUSINESS EXPE DIENCY E.G. SHOULD BE MEANT FOR PURSUING THE OBJECTS OF TRUST & NOT OF PERSONAL NATURE). (8) THE A.O. IS EMPOWERED IN LAW TO ENQUIRE INTO PU RPOSE OF EXPENDITURE E.G. WHETHER BUSINESS PURPOSE AND NO T FOR OTHER EXTRANEOUS CONSIDERATION (134 CTR 237 (RAJ.) IN CAS E OF JAIPUR ELECTRO (P) LTD. V/S CIT (1996) BUT CANNOT DICTATE THE CIRCUMSTANCES IN WHICH EXPENDITURE IS TO BE INCURRE D SINCE EVERY BUSINESSMAN KNOWS HIS INTEREST BEST [REFER CIT V/S DHANRAJGIRI RAJA NARASINGIRJI (1973) 91 ITR 544 (SC)] . THE DEPARTMENT IS TO CONSIDER THE EXPEDIENCY FACTOR AS WELL AS SHOULD EX AMINE THE REALITY FACTOR TOO E.G. NAMELY WHETHER THE AMOUNT C LAIMED AS DEDUCTION WAS FACTUALLY EXPENDED OR LAID OUT AND WH ETHER IT WAS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSIN ESS. (9)RAMANAND SAGAR V/S DY. CIT (2002) 255 ITR 134 (BOMBAY). ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 11 THUS WHEN COMPLETE DETAILS FILED OF EVERY EXPENDITU RE AS CLAIMED IN AUDITED ACCOUNTS. THE A.O. HAS NO WHERE PROVED THAT EXPENSES AS CLAIMED ARE NOT FOR OBJECTS OF TRUST OR NOT TO PERSUE THE OBJECTS, TILL THAN THE SAID EXPENSES CANNOT BE DENI ED JUST FOR A MEAGER APPREHENSION OF NOT VERIFIABLE. (10) REMAND REPORT DATED 22.05.2014 / 27.05.2014 WE RE CALLED TO VERIFY THE FACTS. (11) THE LD. CIT(A) BIASED ON SAID REMAND REPORT & RESTRICTED THE SAID DISALLOWANCE FOR RS. 1,33,750.0 0 BEING THE AMOUNT OF INTEREST TO VIMAL & SHYAM SUNDER AS INTER EST PAID. FURTHER LOOKING TO INTERNAL VOUCHERS & OTHER DEFECT S SHOWN HAS AN ADHOC DISALLOWED A SUM OF RS. 1,75,000.00 OUT OF TO TAL REVENUE EXPENSES CLAIMED OF RS. 6,32,032.00; BEING EXPENSES NOT FOR OBJECT OF THE TRUST.WHEREAS WHEN COMPLETE RECORDS WERE PRO DUCED & VERIFIED BY A.O. EVEN BASED ON SAME RECORDS REGISTR ATION RESTORED U/SEC. 12AA & EXEMPTION U/SEC. 80G GRANTED / RENEWE D; NO DISALLOWANCE SHOULD BE MADE. REFER: CIT V/S RAJENDRA PD. MOODY (1978) 115 ITR 519 (SC) THAT SECTION 57(III) MUST BE CONSTRUCTED BROADLY AND SOMEWHAT WIDER DEFINITION O F SECTION 27(1) SHOULD NOT AFFECT THE INTERPRETATION OF SECTI ON 57(III). FURTHER HONBLE DELHI HIGH COURT IN CASE OF (2014) 223 TAXMAN 1/44 TAXMAN.COM 322 (DELHI):- IN CASE OF DDI (EXEM.) CIRCLE II V/S PETROLEUM PR OMOTION BOARD HAS HELD THAT IF ANY EXPENDITURE NOT ALLOWED BY A.O. AS CLAIMED BY TRUST / SOCIETY; IT MAY AMOUNT TO TAXING GROSS RECEIPTS OF ASSESSEE AND NOT INCOME WHICH IS NOT PERMISSIBLE IN LAW. 4.4 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 4.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE RECORD TH AT THE BOOKS OF ACCOUNT ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 12 WERE PRODUCED BY THE ASSESSEE BEFORE THE AO AND THE SAME HAD BEEN INITIALLED BY THE AO WHILE EXAMINING THE VOUCHERS A ND EVIDENCES. IT IS FURTHER NOTED THAT COMPLETE LEDGER ALONGWITH VOUCHE RS WERE SUBMITTED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS AS WEL L AS DURING RENEWAL PROCESS OF EXEMPTION U/S 80G OF THE ACT AND THE AO HAD NOT POINTED OUT ANY SPECIFIC DEFECTS AS TO THE EXPENDITURE INCURRED AGAINST THE OBJECT OF THE TRUST. AS REGARDS THE AMOUNT OF RS. 1,33,750/- INCURRED ON ACCOUNT OF INTEREST TO MOTIVATORS (COMMISSION), IT APPEARS THA T THIS AMOUNT IS PAID AS COMMISSION OR SHARE OF PANDAS/ PUJARIS WHO COLLECTS THE CHARITIES FOR AND ON BEHALF OF THE TRUST AND AS PER TRUST DEED THEY A RE ENTITLED FOR THEIR SHARE OUT OF IT AND THIS AMOUNT IS PAID TO THEM FOR THEIR LIVELIHOOD BY THE TRUST. IT IS FURTHER NOTED THAT WHEN THE AO HAS NOT POINTED O UT ANY SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND VOUCHER S OF THE ASSESSEE THEN THERE IS NO REASON TO RESTRICT SUCH EXPENSES BY THE LD. CIT(A) AS THE AO HAS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE BOO KS OF ACCOUNT OF THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. IN SUCH A S ITUATION, THE RESTRICTION OF THE CLAIM OF THE ASSESSEE TO THE EXT ENT OF RS. 3,23,282/- IS NOT JUSTIFIED BY THE LD. CIT(A) WHICH IS DELETED. THUS GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 13 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2007-08 IS ALLOWED. 6.0 NOW I TAKE UP THE APPEAL OF THE ASSESSEE FOR TH E ASSESSMENT YEAR 2008-09 7.1 IN THE APPEAL OF THE ASSESSEE FOR THE ASSESSMEN T YEAR 2008-09, IT IS NOTED THAT THE ISSUE RAISED IN GROUND NO. 1 AND GR OUND NO. 2 OF THE ASSESSEE ARE SIMILAR TO THE ISSUE RAISED IN THE ASS ESSMENT YEAR 2007-08 WHEREIN BOTH THE GROUNDS OF THE ASSESSEE ARE ALLOWE D. HENCE, IN VIEW OF THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, TH E DECISION TAKEN IN THE ASSESSMENT YEAR 2007-08 SHALL APPLY MUTATIS MUTANDI S IN THE ASSESSMENT YEAR 2008-09 OF THE ASSESSEE'S APPEAL. HENCE, GROUN D NO. 1 AND GROUND NO. 2 OF THE ASSESSEE ARE ALLOWED. 8.1 IN GROUND NO. 5, THE ASSESSEE IS AGGRIEVED THAT THE LOWER AUTHORITIES HAVE ERRED IN CONSIDERING CASH RECEIPT OF RS. 5,000/- FROM SHRI SHYAM DHARMAWAT AS UNEXPLAINED CREDIT. IT IS NOTED FROM THE ASSESSMENT ORDER THAT THE ASSESSEE HAD SHOWN THE CA SH RECEIPT OF RS. 5,000/- FROM SHRI SHYAM DHARMAWAT ON 04-02-2008 WHI CH WAS ADDED BACK TO THE INCOME OF THE ASSESSEE BY THE AO AS THE ASSESSEE HAD FAILED TO PROVE THE NATURE AND SOURCE OF THE CREDIT. IN APPEA L, THE LD. CIT(A) HAS ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 14 CONFIRMED THE RECEIPT OF AMOUNT OF RS. 5,000/- TO T HE INCOME OF THE ASSESSEE BY OBSERVING AS UNDER:- 7.2 ON THIS ISSUE NO WRITTEN SUBMISSION HAS BEEN FILED BY THE APPELLANT. THEREFORE, IN VIEW OF THE F ACTS DISCUSSED BY THE AO IN THE ASSESSMENT ORDER , IT IS HELD THAT THE AO WAS FULLY JUSTIFIED IN TREATING THE CREDIT OF RS. 5,000/- AS UNEXPLAINED CREDIT U/S OF THE I.T. ACT. HOWEVER, IT IS SEEN THAT WHILE COMPUTING THE TOTAL INCOME OF TH E APPELLANT, THE AO HAS NOT MADE ADDITION OF RS. 5,00 0/- ON THE SURPLUS DECLARED BY THE APPELLANT AS PER RETURN . HENCE, THE ASSESSMENT OF THE APPELLANT NEEDS TO BE ENHANCE D BY A SUM OF RS. 5,000/-. THE A/R OF THE APPELLANT VIDE O RDER SHEET DATED 11-12-15 HAS SATED THAT HE HAS NO OBJECTION, IF THE ASSESSMENT OF THE ASSESSEE IS ENHANCED BY SUM OF RS . 5,000/- . ACCORDINGLY, THE ASSESSMENT OF THE APPELLANT IS ENHANCED U/S 251(1) BY SUM OF RS. 5,000/- 8.2 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS EMERGES FROM THE ORDER O F THE LD. CIT(A) THAT WHEN THE LD. AR OF THE ASSESSEE VIDE ORDER SHEET DA TED 11-12-2015 HAD STATED THAT HE HAD NO OBJECTION IF THE ASSESSMENT O F THE ASSESSEE IS ENHANCED BY THE A SUM OF RS. 5,000/- THEN THERE IS NO USE TO DEAL WITH THE GROUNDS OF THE ASSESSEE AND THIS ISSUE HAS NOT BEEN RAISED BY THE LD. AR OF THE ASSESSEE IN THE WRITTEN SUBMISSION. HENCE, CONS IDERING ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND NO REASON TO INTERFERE WITH THE ORDER ITA NO. 53/JP/2016 SHRI TIRTH GURU PUSHKAR PUROHIT SANGH TRUST, AJMER VS. ITO, EXEMPTION, AJMER . 15 OF THE LD. CIT(A) ON THIS ISSUE WHICH IS SUSTAINED. THUS GROUND NO. 3 OF THE ASSESSEE IS DISMISSED. 9.0 IN THE RESULT, THE APPEALS OF THE ASSESSEE RELA TING TO ASSESSMENT YEAR 2007-08 IS ALLOWED AND THAT OF THE ASSESSMENT YEAR 2008-09 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 /08/2 016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 /08/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI TIRTH GURU PUSHKAR PUROHIT SANG H TRUST, AJMER 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, EXEMPTION, AJMER 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 53/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR