Jt. CIT, (OSD), C-2 (E), Chandigarh V. M/s Vishav Manav Ruhani Kendra, Panchkula

ITA 899/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1272 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 06-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Rule of consistency; Revenue expenditure; Capital expenditure
• Section: 143(3); 12A; 12AA; 250; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.899/CHD/2019 / ASSESSMENT YEAR : 2014-15 THE J.C.I.T.(OSD), (EXEMPTIONS), CIRCLE-2, CHANDIGARH. M/S VISHAV MANAV RUHANI KENDRA, NAWAN NAGAR, CIRCLE-2, CHANDIGARH. ./PAN NO: AAFFV1981L /APPELLANT /RESPONDENT /ASSESSEE BY: SHRI AJAY JAIN, CA ! / REVENUE BY: SMT.CHANDERKANTA, CIT DR ' # $ /DATE OF HEARING : 04 .03.2020 %&'( $ /DATE OF PRONOUNCEMENT:. 21/05/2020 ') /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THE ABOVE APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA [(IN SHORT REFERRED TO AS CIT(A)] DATED 12.03.2019 RELATING TO ASSESSMENT YEAR 2014-15, PASSED U/S 250 (6)) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: I. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN ALLOWING TH E APPEAL OF THE ASSESSEE BY ALLOWING EXEMPTION O THE ASSESSE E U/S 11/12 OF THE INCOME TAX ACT DESPITE THE FACT THAT T HE ITA NO.899/CHD/2019 A.Y. 20 14-15 2 ACTIVITIES OF THE ASSESSEE WERE NOT COVERED U/S 2(1 5) OF THE ACT. II. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN ALLOWING TH E APPEAL OF THE ASSESSEE IGNORING THE FACT THAT THE DONATION S AMOUNTING TO RS.13,`8,82,040/- WERE NOT CORPUS DONA TIONS AS THE SAME WERE RECEIVED WITHOUT ANY SPECIFIC DIRE CTION. III. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN ALLOWING TH E CLAIM OF CAPITAL EXPENDITURE INCURRED DURING THE YEAR TO THE ASSESSEE IGNORING THAT THE EXEMPTION U/S 11/12 OF T HE ACT WAS RIGHTLY DENIED TO THE ASSESSEE. IV. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN DELETING TH E AMOUNT OF RS.12,35,40,420/- ASSESSED BY THE AO ALLOWING EXEMPTION TO THE ASSESSEE U/S 11/12 OF THE ACT WHIC H WAS RIGHTLY DENIED BY THE AO. V. THAT THE APPELLANT CRAVES TO LEAVE, ADD OR AMEND ANY GROUNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD OR DISPOSED OF. 2. AS IS EVIDENT FROM THE PERUSAL OF THE GROUNDS AB OVE, THE GRIEVANCE OF THE REVENUE IN THE PRESENT APPEAL IS A GAINST THE ORDER OF THE LD.CIT(A) IN ALLOWING THE ASSESSEES C LAIM OF EXEMPTION U/S 11/12 OF THE ACT, ALLOWING ITS CLAIM OF CORPUS DONATIONS AMOUNTING TO RS.13.18 CRORES AND FURTHER IN ALLOWING THE CLAIM OF CAPITAL EXPENDITURE INCURRED BY THE AS SESSEE ON ACQUISITION OF LAND UNDER THE PROVISIONS OF SECTION 11/12 OF THE ACT. THE ISSUE INVOLVED IN THE PRESENT APPEAL THERE FORE RELATES TO THE PROVISIONS UNDER THE INCOME TAX ACT WHICH GR ANT EXEMPTION TO INCOMES OF CHARITABLE TRUST. 3. THE BRIEF FACTS RELATING TO THE CASE ARE THAT TH E ASSESSEE SOCIETY IS REGISTERED UNDER THE HARYANA REGISTRATIO N AND REGULATION OF SOCIETIES ACT AND HAS ALSO BEEN GRANT ED REGISTRATION AS A CHARITABLE TRUST BY THE COMMISSIO NER OF INCOME TAX, PANCHKULA UNDER SECTION 12A OF THE ACT, VIDE ORDER DATED 17.9.2007. DURING ASSESSMENT PROCEEDINGS FOR THE IMPUGNED YEAR, THE AO NOTED THAT THE AIMS AND OBJEC TS OF THE ASSESSEE SOCIETY WERE OF GENERAL NATURE AND DID NO T POINT TO ITA NO.899/CHD/2019 A.Y. 20 14-15 3 ANY SPECIFIC LIMB OF CHARITY AS PRESCRIBED U/S 2(15 ) OF THE ACT . HE ALSO NOTED THAT THE SOCIETY WAS PREACHING SERMO NS THROUGH SATSANG, ETC. AND ITS MAIN EXPENDITURE WAS TOWARDS LUNGAR EXPENSES, SATSANG EXPENSES, HONORARIUM SEVADARS AND THAT ITS RECEIPTS WERE ONLY IN THE FORM OF DONATION ON ACCO UNT OF RELIGIOUS PREACHINGS. THE AO AFTER CONSIDERING ALL THESE ASPECTS HELD THAT THE ASSESSEE WAS NOT ELIGIBLE TO EXEMPTIO N U/S 11/12 OF THE ACT AND DENIED THE SAME TO THE ASSESSEE. THE AO FURTHER NOTED THAT THE ASSESSEE HAD SHOWN RECEIPTS OF CORPU S DONATION AMOUNTING TO RS.13,18,82,040/- ALONGWITH OTHER DONA TIONS AND HAD NOT REFLECTED THE SAME IN ITS INCOME AND EXPEN DITURE ACCOUNT. HE FURTHER NOTED THAT THE ASSESSEE HAD PUR CHASED SEVERAL PIECES OF LAND DURING THE YEAR IN CASH AND HAD CLAIMED UTILIZATION OF THE SAME U/S 11/12 OF THE ACT. THE A O MADE ENQUIRIES VIS--VIS CORPUS DONATION RECEIVED AND FO UND THERE WAS NO SPECIFIC DIRECTION FROM THE DONORS FOR TREAT ING THE DONATIONS AS TOWARDS CORPUS OF THE ASSESSEE SOCIETY , IN THE CONFIRMATIONS SUBMITTED BY THE ASSESSEE. ACCORDINGL Y, HE HELD THAT THE DONATIONS DID NOT QUALIFY AS CORPUS DONATI ON.FURTHER THE AO HELD THAT SINCE THE ASSESSEE HAD CLAIMED UTI LIZATION OF THE SAME FOR PURCHASE OF LAND, THE ASSESSEE DID NOT FULFILL THE CONDITIONS PRESCRIBED U/S 11/12 OF THE ACT TO AVAIL THE SAME. HE ACCORDINGLY, TREATED THE ENTIRE CORPUS DONATION AS THE INCOME OF THE ASSESSEE AND FURTHER DENIED THE CLAIM OF UTILIZATION FOR PURCHASE OF LAND TO THE ASSESSEE. A CCORDINGLY THE AO ASSESSED AN AMOUNT OF RS.12,35,40,420/- AS INCOM E OF THE ASSESSEE LIABLE TO TAXATION. 4. BEFORE THE LD.CIT(A) DETAILED ARGUMENTS WERE MA DE BY THE ASSESSEE, REPRODUCED AT PARA 4.3 OF THE ORDER, AFTE R CONSIDERING WHICH THE LD.CIT(A) ALLOWED THE ASSESSEES APPEAL I N ENTIRETY, INCLUDING ITS CLAIM OF EXEMPTION U/S 11/12 OF THE A CT, THE ITA NO.899/CHD/2019 A.Y. 20 14-15 4 TREATMENT OF ITS DONATIONS CLAIMED AS CORPUS DONATI ONS AND THE CLAIM OF UTILIZATION OF DONATIONS FOR PURCHASE OF L AND. 5. AGGRIEVED BY THE SAME, THE REVENUE HAS COME UP I N APPEAL BEFORE US. 6. IN GROUND NO.1 THE REVENUE HAS CHALLENGED THE AL LOWANCE OF CLAIM OF EXEMPTION U/S 11/12 OF THE ACT BY THE L D.CIT(A), DESPITE ALLEGEDLY THE FINDINGS OF THE AO THAT THE ACTIVITIES OF THE ASSESSEE WERE NOT CHARITABLE. THE FINDINGS OF THE LD.CIT(A) ALLOWING THE ABOVE C LAIM OF THE ASSESSEE ARE AT PARA 4.4 OF THE ORDER, WHICH ARE RE PRODUCED HEREUNDER: 4.4 I HAVE PERUSED THE RIVAL CONTENTIONS AND THE V ARIOUS DOCUMENTARY EVIDENCES SUBMITTED IN THE APPELLATE PR OCEEDINGS IN THE FORM OF AIMS & OBJECTS AND RULES AND REGULATION S OF THE APPELLANT SOCIETY, THE LIST OF DONATIONS, RECEIPT V OUCHERS & RECORDS OF CORPUS AS WELL AS GENERAL DONATIONS MAI NTAINED BY THE APPELLANT, COPIES OF CONFIRMATIONS FROM DONORS AND ASSESSMENT ORDERS OF VARIOUS YEARS, ALL OF WHICH WERE ALSO PRO DUCED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS AND THE VARIOU S CASE LAWS RELIED UPON BY THE APPELLANT. AFTER CONSIDERATIONS OF ALL THE FACTS AND CIRCUMSTANCES AND EVIDENCES ON RECORD, I AM OF THE CONSIDERED OPINION THAT THE APPELLANTS SUBMISSIONS AGAINST THE ADDITIONS MADE IN THE ASSESSMENT ORDER AND ITS RELI ANCE ON VARIOUS JUDICIAL DECISIONS AS ELABORATED IN ITS SUB MISSIONS HAS MERIT. THE APPELLANT SOCIETY IS A RELIGIOUS CUM CHA RITABLE SOCIETY WHICH WAS GRANTED REGISTRATION U/S 12AA OF THE ACT W.E.F. A.Y. 2006-07 VIDE ORDER OF CIT, PANCHKULA DATED 17.09.20 07 AFTER DUE CONSIDERATION GIVEN TO AIMS AND OBJECTS OF THE SOCI ETY. THE REGISTRATION HAS NOT REVOKED. THE EXEMPTION U/S 11 HAS BEEN ALLOWED IN PREVIOUS AS WELL AS SUBSEQUENT ASSESSMEN T YEARS WHERE ORDERS U/S 143(3) WERE PASSED AFTER SCRUTINY AND CHARITABLE NATURE OF ACTIVITIES HAS BEEN ACCEPTED B Y THE AOS. THE FACTS OF THE CURRENT YEARS IN APPEAL WITH RESPECT T O NATURE OF ACTIVITIES ARE NOT ANY DIFFERENT FROM EARLIER OR SU BSEQUENT YEARS. THE SOCIETY HAS UTILIZED THE GENERAL DONATIONS AND OTHER RECEIPTS FOR AIMS AND OBJECTIVES GIVEN IN MEMORANDUM OF ASSO CIATION OF SOCIETY FOR WHICH REGISTRATION WAS GRANTED I.E BY I NCURRING EXPENDITURE OF RS.20,02,167/- ON RUNNING OF SCHOOL, RS.18,67,527/- ON CHARITABLE ACTIVITIES OF RUNNING MEDICAL CAMPS AND OLD AGE HOMES WHICH CANNOT BE DENIED TO HAVE NO T BEEN INCURRED FOR THE PURPOSE OF EDUCATION, MEDICAL RELI EF AND RELIEF TO THE POOR. THE APPELLANT HAS ALSO RIGHTLY CLAIMED TH AT LUNGAR EXPENSES ARE ANOTHER NAME FOR PROVISION OF FOOD TO ATTENDEES OF MEDICAL CAMPS, OLD AGE HOMES AND MANAV SEVA KENDRA SATSANGS AND SUSPICION OF AO IN THIS REGARD IS UNFOUNDED. NO OTHER EXPENDITURE IN VIOLATION OF AIMS AND OBJECTIVES HAS BEEN POINTED ITA NO.899/CHD/2019 A.Y. 20 14-15 5 OUT BY THE AO. FURTHER I FIND THAT THE AO HAS E EN CONTRADICTED HIMSELF AND ALLOWED EXEMPTION U/S 11 W.R.T REVENUE EXPENDITURE IN COMPUTATION OF INCOME. THEREFORE ON FACTS AND CI RCUMSTANCES OF THE CASE AND PRINCIPLE OF CONSISTENCY, IT IS HELD T HAT THE APPELLANT SOCIETY IS ELIGIBLE FOR EXEMPTION U/S 11 OF THE IT ACT. 7. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF TH E LD.CIT(A). WE FIND THAT THE LD.CIT(A) ON APPRAISING ALL THE EV IDENCES PLACED BEFORE HIM HAS ARRIVED AT THE FINDING THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 11/12 OF THE ACT.THE LD.CIT(A) HAS NOTED THAT THE ASSESSEE HAD BEEN GRANTED REGISTRATI ON AS CHARITABLE SOCIETY U/S 12A OF THE ACT ON THE BASIS OF THE SAME AIMS AND OBJECTS WHICH THE AO HAS NOW FOUND TO BE N OT IN THE NATURE OF CHARITABLE AS DEFINED U/S 2(15) OF THE AC T. HE HAS ALSO NOTED THE FACT THAT THIS REGISTRATION HAS NOT BEEN REVOKED TILL DATE. THE LD.CIT(A) HAS ALSO FOUND THAT THE AS SESSEE HAS ALL ALONG BEEN ALLOWED EXEMPTION U/S 11/12 IN SCRUTINY ASSESSMENT IN THE PAST AND SUBSEQUENT YEARS ALSO. HE FURTHER ALSO HAS NOTED THAT THERE IS NO CHANGE WITH RESPEC T TO THE NATURE OF THE ACTIVITIES IN THE IMPUGNED YEAR AS C OMPARED TO THE EARLIER AND SUBSEQUENT YEARS. EVEN OTHERWISE ON MERITS, THE LD.CIT(A) HAS NOTED THE FACT THAT THE ASSESSEE HAD BEEN INCURRING EXPENDITURE OF RS.20,02,167/- ON RUNNING OF SCHOOL WHICH BEING FOR THE PURPOSE OF EDUCATION QUALIFIED AS CHARITABLE ACTIVITIES U/S 2(15) OF THE ACT AND HAS SPENT RS.18 ,67,527/- ON THE ACTIVITIES OF RUNNING MEDICAL CAMPS AND OLD AGE HOMES WHICH ALSO QUALIFIED AS CHARITABLE ACTIVITIES IN TH E NATURE OF MEDICAL RELIEF TO THE POOR U/S 2(15) OF THE ACT. HE HAS ALSO NOTED THAT THE LUNGAR EXPENSES ARE MERELY PROVISION OF FOOD TO THE ATTENDEES OF MEDICAL CAMPS,IN OLD AGE HOMES AND MANAV SEVA KENDER. THE AFORESAID FACTS HAVE REMAINED UNCO NTROVERTED BEFORE US. MOREOVER, THE LD.DR HAS BEEN UNABLE TO P OINT OUT ANY INFIRMITY IN THE SAME. IN VIEW OF THE SAME AND ON CONSIDERING THE FACTUAL FINDINGS OF THE LD.CIT(A), WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD.CIT(A) HOLDING THE ASSESSEE AS CARRYING OUT CHARITABLE ACTIVITIES WITH IN THE ITA NO.899/CHD/2019 A.Y. 20 14-15 6 DEFINITION OF THE SAME U/S 2(15) OF THE ACT AND ELI GIBLE FOR EXEMPTION U/S 11/12 OF THE ACT. GROUND NO.1 RAISED BY THE REVENUE IS, THEREFORE DISMISSED. 8. IN GROUND OF APPEAL NO.2 THE REVENUE HAS CHALLEN GED THE ORDER OF THE LD.CIT(A) HOLDING THAT THE CORPUS DONA TION CLAIMED BY THE ASSESSEE QUALIFIED AS SUCH. THE RELEVANT FIN DINGS OF THE LD.CIT(A) IN THIS REGARD, WE HAVE NOTED ARE AT PARA S 4..6 AND 4.7 OF THE ORDER AS UNDER: 4.6 REGARDING THE ISSUE OF CLAIMED CORPUS DONATIO NS OF RS. 13,18,82,040/- RECEIVED FOR THE PURPOSE OF LAND FOR SETTING UP MANAV SEVA KENDRA ACROSS THE COUNTRY , WHICH WERE T REATED AS NORMAL DONATIONS AND ADDED TO THE RECEIPTS OF THE A PPELLANT BY THE A.O , I FIND UPON PERUSAL OF SUBMISSIONS OF APP ELLANT AND THE EVIDENCES PLACED ON RECORD THAT THE CONTENTION OF THE APPELLANT CARRIES MERIT AND THE A.O. HAS MADE CONTR ADICTORY STATEMENTS AND NOT CONSIDERED THE SUBMISSIONS OF AP PELLANT IN TOTALITY IN THE ASSESSMENT ORDER. THE APPELLANT HAS SUBMITTED THAT CORPUS DONATIONS COLLECTIONS FOR LAND WAS STAR TED DURING THE YEAR AS PER RESOLUTION OF THE GENERAL BODY FOR THE PURPOSE OF PURCHASE OF LAND TO BE USED FOR CONSTRUC TION OF NEW OLD AGE HOMES., HOSPITAL/DISPENSARIES AND MANAV KE NDRA ACROSS THE COUNTRY AND ALL BRANCHES OF APPELLANT SO CIETY WERE INFORMED ABOUT RAISING OF CORPUS FUND FOR LAND IN T HE BRANCHES AND TO DEPOSIT THE DONATIONS RECEIVED FOR THE PURPO SE ON MONTHLY BASIS TO THE HEAD OFFICE FOR WHICH A SINGL E MONTHLY RECEIPT WAS ISSUED BY HEAD OFFICE. AS AGAINST WHAT HAS BEEN ALLEGED BY A.O. IN ASSESSMENT ORDER , THE APPELLANT WAS MAINTAINING SEPARATE ACCOUNTS OF THE CORPUS DONATIO N RECEIPT AND GENERAL DONATIONS AND THE AUDITED BOOKS OF ACCO UNT ALSO SHOW THE BIFURCATION. I ALSO FIND THAT IT IS NOT DI SPUTED THAT THE DONATIONS FOR LAND WERE DEPOSITED IN SEPARATE BANK ACCOUNTS DESIGNED FOR THE PURPOSE AND LATER FDRS WERE MADE T O MAINTAIN THIS CORPUS FUND THAT WAS UTILIZED FOR PUR POSE OF LAND AND ASSETS IN SUBSEQUENT YEARS THROUGH CHEQUES AND DRAFTS. I FIND THAT THE APPELLANT HAS MAINTAINED SEPARATE BOO KS FOR THE GENERAL AND CORPUS DONATION.THE RECEIPT BOOKS USED FOR CORPUS DONATION WERE MARKED WITH STAMP OF BHOOMI KHARIDAN EY HETU DHAN SEWAAND RECEIPTS WHERE NO PURPOSE HAS BEEN SP ECIFIED AND ONLY MENTION THAT AMOUNT IS RECEIVED TOWARDS SE WA, WERE CREDITED UNDER SATSANG SEWA OR GENERAL DONATION. THIS RECEIPTS ISSUED SHOW THE PURPOSE FOR WHICH DONATION IS RECEIVED. 4.7 FURTHER, AS EXPLAINED BY APPELLANT IN ITS SUBMI SSIONS REPRODUCED ABOVE, OUT OF A LIST OF 10 DONORS MENTIO NED IN ASSESSMENT ORDER WHOSE CONFIRMATIONS WERE SOUGHT BY A.O, THE A.O. SELECTIVELY CHOSE TO REPRODUCE CONFIRMATIONS R EGARDING GENERAL DONATION RECEIVED FROM TWO PERSONS WHILE IG NORING THE CONFIRMATIONS RECEIVED FROM THE OTHERS WHO HAVE CON FIRMED THAT THE DONATION WAS MADE FOR THE PURPOSE OF PURCHASE O F LAND. I ITA NO.899/CHD/2019 A.Y. 20 14-15 7 ALSO FIND THAT RECEIPTS OF MONTHLY CORPUS DONATION COLLECTED BY BRANCH MACHIWARA AT NO.931254 DATED 09.06.2013 WHIC H HAS BEEN QUOTED BY A.O. INCLUDES ALL THE DETAILS OF NAM ES OF DONORS, THEIR ADDRESSES, MOBILE NUMBERS AND SIGNATU RES AS WELL AND A.O HAS IGNORED TO MENTION THAT THAT THE A MOUNTS RECEIVED ARE SHOWN UNDER THE COLUMN HEADING BHOOMI SEWA. SIMILAR RECEIPTS FOR OTHER BRANCHES AT BHABAT, DERA BASSI, KURALI ETC. WHICH WERE PRODUCED BEFORE THE A.O., AL SO SHOW THAT COLLECTION HAS BEEN MENTIONED UNDER THE HEAD BHOOMI SEWA AND DETAILS LIKE NAMES OF DONORS, VILLAGE AND MOBILE NUMBER AND SIGNATURES OF DONORS ARE DULY FOUND MAIN TAINED. THUS IT IS FOUND THAT JUDICIAL VIEW GIVEN IN THE DE CISION OF THE JURISDICTIONAL TRIBUNALS ORDER IN THE CASE OF SHRE E MAHADEVI TIRATH SHARDA MA SEWA SANGH (SUPRA) WOULD APPLY ON THE FACTS OF APPELLANTS CASE AND THE RECEIPTS WOULD QUALIFY AS MEETING THE REQUIREMENT FOR A SPECIFIC DIRECTION REGARDING CORPUS DONATION. IT IS ALSO NOT THE CASE OF THE A.O. THAT THE APPELLANT WAS NOT ABLE TO GIVE THE PARTICULARS OF THE PERSONS WHO HAVE DONATED THE AMOUNTS OR THE DONORS WERE NOT PROVIDED RECEIPTS AGAINST THEIR VOLUNTARY CONTRIBUTIONS TOWARDS THE L AND FUND. THE DONORS WERE NOT EXAMINED BY AO TO PROVE OTHERWI SE. THIS CASE LAW RELIED UPON BY THE APPELLANT SUPPORT THE V IEW THAT ONCE RECEIPTS ARE ISSUED SHOWING THE PURPOSE FOR WH ICH IT IS RECEIVED, IT WOULD MEAN THAT THE DONOR HAS ISSUED A DIRECTION TO UTILIZE THE AMOUNT DONATED FOR THE PURPOSE AND T HE LAW DOES NOT CONTEMPLATE THAT THE SPECIFIC DIRECTIONS OF THE DONOR SHOULD BE IN WRITING ONLY. THEREFORE, IN THE ABSENCE OF AN Y MATERIAL BEING BROUGHT ON RECORD BY THE AO BY ANY INDEPENDEN T ENQUIRY THAT PROVISIONS OF SECTION 11(1)(D) HAVE BEEN MISUS ED BY THE APPELLANT THE DENIAL OF CORPUS DONATIONS AND THEIR TREATMENT AS ORDINARY DONATIONS BASED UPON SUSPICION IS NOT W ARRANTED PARTICULARLY WHEN THE AMOUNT HAS UNDISPUTEDLY BEEN USED FOR THE STATED PURPOSE IN SUBSEQUENT YEARS. THUS RELYIN G UPON THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE AS DISCUSSED ABOVE, THE MATERIAL ON RECORD AND THE CASE LAWS CIT ED , I CONSIDER THAT REQUIREMENT OF SECTION 11(1)(D) OF TH E ACT ARE FULFILLED BY THE APPELLANT AND THE IMPUGNED DONATIO NS RECEIVED AT 13,18,82,040/-SHALL FORM A PART OF THE CORPUS OF THE APPELLANT SOCIETY AND TREATED AS EXEMPT U/S 11(1)(D ) OF THE ACT. THIS GROUND OF APPEAL IS ALLOWED. 10. ON GOING THOUGH THE ABOVE WE FIND THAT THE LD.C IT(A HAS PERUSED THE RECORDS OF THE ASSESSEE PRODUCED BEFORE HIM AND ON PERUSING THE SAME HAD GIVEN A CATEGORICAL FINDIN G OF FACT THAT THE CORPUS DONATIONS RECEIVED WERE RECEIVED WI TH THE SPECIFIC DIRECTION AS SUCH. THE LD.CIT(A, WE FIND, HAS NOTED THAT THERE WERE SEPARATE RECEIPT BOOKS FOR COLLECT ING THE CORPUS DONATIONS WHICH WAS MARKED WITH THE STAMP B HUMI KHARIDANE HETU DHAN SEVA AND ALL DONATIONS COLLECT ED UNDER THESE RECEIPTS HAD BEEN CATEGORIZED AS CORPUS DONA TIONS BY THE ASSESSEE, WHICH AMOUNT WAS KEPT IN A SEPARATE BANK ACCOUNT, ITA NO.899/CHD/2019 A.Y. 20 14-15 8 SEPARATE FROM THE GENERAL DONATION AND ALSO THAT F DRS HAD BEEN MADE FROM THE SAME WHICH WERE SUBSEQUENTLY USE D IN SUBSEQUENT YEARS FOR PURCHASE OF LAND THROUGH ISSUA NCE OF CHEQUES AND DRAFTS. THE LD.CIT(A) HAS ALSO NOTED TH E FACT THAT THE ASSESSEE HAD MAINTAINED SEPARATE RECORD OF GENE RAL DONATION AND CORPUS DONATION AND THAT ITS ACCOUNTS WERE DULY AUDITED. THE LD.CIT(A), WE FIND, HAS FURTHER NOTED THAT THE OBSERVATION OF THE AO THAT THERE WERE NO SPECIFIC D IRECTIONS BY THE DONOR FOR TREATING THE DONATION AS CORPUS DONAT ION, WAS BASED ON MIS-APPRECIATION OF FACTS SINCE THE RECEIP TS REFERRED TO BY THE AO FOR BASING HIS OBSERVATION WERE RELATING TO GENERAL DONATIONS AND NOT CORPUS AND DONATIONS. 11. BEFORE US THE LD.DR HAS BEEN UNABLE TO CONTROVE RT ANY OF THE ABOVE FACTUAL FINDINGS OF THE LD.CIT(A). IN VIE W OF THE ABOVE SINCE WE FIND THAT THE LD.CIT(A) HAS GIVEN A CATEGO RICAL FINDING OF FACT, BASED ON EVIDENCES PRODUCED BEFORE HIM, TH AT THE DONATIONS SHOWN BY THE ASSESSEE AS CORPUS DONATIONS WERE GIVEN WITH THE DIRECTIONS THAT THEY QUALIFIED AS SU CH AND WHICH WAS THE SOLE REASON FOR THE REVENUE DENYING THE CLA IM, WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A) TREATING THE CORPUS DONATIONS AS SUCH. THE GROUND O F APPEAL NO.2 RAISED BY THE REVENUE IS, THEREFORE, DISMISSED . 12. GROUND OF APPEAL NO.3 RAISED BY THE REVENUE REL ATES TO ALLOWANCE OF THE CLAIM OF THE ASSESSEE AS EXPENSE I NCURRED FOR PURCHASE OF LAND AS UTILIZATION/APPLICATION AS PER THE PROVISIONS OF SECTION 11/12 OF THE ACT. THE FINDING S OF THE LD.CIT(A) IN THIS REGARD ALLOWING THE ASSESSEES CL AIM, WE FIND, ARE AT PARA 4.5 OF THE ORDER AS UNDER: 4.5 FURTHER THE AO MISDIRECTED HIMSELF AND DISALLO WED THE CAPITAL EXPENDITURE INCURRED DURING THE YEAR IN PUR CHASE OF FIXED ASSETS OUT OF INCOME FROM PROPERTY HELD UNDER TRUST. THE AO IS NOT CLEAR AS TO THE FACTS IN THIS RESPECT TOO . THE PURCHASE OF FIXED ASSETS DURING THE CURRENT YEAR IS OUT OF R ECEIPTS OF ITA NO.899/CHD/2019 A.Y. 20 14-15 9 GENERAL DONATION SAND NOT OUT OF THE CLAIMED CORPUS DONATIONS WHICH WERE COLLECTED IN THE CURRENT YEAR ONLY FOR T HE FIRST TIME AND HAVE BEEN CLAIMED TO BE USED IN SUBSEQUENT ASSE SSMENT YEARS AND NOT IN CURRENT YEAR. THE APPELLANT IS FOU ND TO HAVE SEPARATE ACCOUNTS FOR GENERAL DONATIONS AND THESE H AVE BEEN AUDITED. THE AUDITED BOOKS SHOW SEPARATE BIFURCATIO N OF DONATIONS UNDER GENERAL AND CORPUS DONATIONS. THERE IS NO CHANGE IN NATURE OF THE ACTIVITIES CARRIED OUT BY T HE SOCIETY FROM EARLIER YEAR AND SUBSEQUENT YEARS, AS IS EVIDE NT FROM THE COPIES OF RETURNS OF INCOME SUBMITTED BEFORE THE UN DERSIGNED AND THE RESPECTIVE ASSESSMENT ORDERS WHERE ASSESSME NT HAS BEEN FRAMED U/S 143(3) AFTER SCRUTINY AND EXEMPTION HAS BEEN ALLOWED U/S11 AND APPLICATION OF INCOME ON REVENUE EXPENDITURE AS WELL AS CAPITAL EXPENSES HAS BEEN AL LOWED. THEREFORE, THE APPLICATION OF INCOME OF THE SOCIETY FROM PROPERTY HELD UNDER TRUST HAS TO BE ALLOWED IN RESP ECT OF CAPITAL EXPENDITURE INCURRED DURING THE YEAR OUT OF THE RECEIPTS OF THE APPELLANT WHILE COMPUTING ITS TOTAL INCOME U /S 11 TO 13OF THE IT ACT. THUS THESE GROUNDS OF APPEAL ARE ALLOWED. THE AO IS DIRECTED TO GIVE RELIEF TO APPELLANT ACCORDINGLY. 13. ON GOING THROUGH THE SAME, WE FIND THAT THE LD. CIT(A) HAS NOTED FROM THE DOCUMENTS AND EVIDENCES AND BOOKS OF ACCOUNTS OF THE ASSESSEE PRODUCED BEFORE HIM THAT THE UTILIZ ATION BY THE ASSESSEE FOR PURCHASE OF LAND WAS OUT OF GENERAL DO NATION RECEIVED AND NOT OUT OF CORPUS DONATION AND THAT TH E AO HAD MISAPPRECIATED THE FACTS IN THIS REGARD WHILE NOT A LLOWING THE CLAIM OF THE ASSESSEE. THE SAID FACTUAL FINDINGS OF THE LD.CIT(A) HAVE NOT BEEN CONTROVERTED BEFORE US, NOR HAS THE L D.DR MADE ANY ARGUMENTS BEFORE US AS TO WHY THE DISALLOWANCE BE UPHELD. THE AO, WE HAVE NOTED HAD MADE THE DISALLOWANCE NOT ING THAT THE SAME HAD BEEN MADE OUT OF CORPUS DONATION WHICH DID NOT QUALIFY AS SUCH, BUT SINCE THE LD.CIT(A) HAS GIVEN A FINDING OF FACT THAT THE INVESTMENT IN LAND HAD BEEN MADE OUT OF GENERAL DONATIONS, WHICH FACT HAS REMAINED UNCONTROVERTED B EFORE US, WE SEE NO REASON TO INTERFERE IN THE ORDER OF THE L D.CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE OF UTILIZATION O F AMOUNT INCURRED FOR PURCHASE OF LAND FOR THE PURPOSES OF C LAIMING EXEMPTION U/S 11/12 OF THE ACT. IN VIEW OF THE ABOV E, GROUND OF APPEAL NO.3 RAISED BY THE REVENUE IS ALSO DISMISSED . ITA NO.899/CHD/2019 A.Y. 20 14-15 10 GROUND OF APPEAL NO.4 IS GENERAL IN NATURE AND NEED S NO ADJUDICATION. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON 21/05/2020. SD/- SD/- # $ % &' (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER '( /ACCOUNTANT MEMBER *# /DATED: 21/05/2020 * ' * &) *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $ 0 , 123/4 / DR, ITAT, CHANDIGARH 6. /3 5# / GUARD FILE &) ' / BY ORDER, 6 ! / ASSISTANT REGISTRAR