2010 (12) TMI 1287 - AT - Income Tax

Tribunal directs reassessment for unverified expenses and donations, setting aside previous decisions. Fresh verification required.

ITO (E) -II, Kolkata Versus Sree Sree Mohanananda Samaj Seva Samity.

The Tribunal allowed the Revenue's appeals for the assessment years 2002-03 and 2003-04, setting aside the CIT(A)'s decisions. It directed a fresh ... - Issues:The judgment involves appeals by the Revenue against the orders of the C.I.T.(A)-XXXIII, Kolkata for the assessment years 2002-03 and 2003-04 regarding exemption u/s 11 and various expenses claimed by the assessee.Assessment Year 2002-03:The Revenue challenged the allowance of exemption u/s 11 and expenses under salary, donation without proper evidence. The AO made assessments u/s 144 due to non-production of accounts and bills by the assessee. Various expenses were disallowed, including donations and capital expenditures. The CIT(A) deleted the additions, holding the Trust as charitable and genuine donations. The CIT(A) observed that expenses were application of funds for charitable purposes, hence no disallowance was warranted. The CIT(A) also ruled that trustee residence within Trust premises was not a violation of Sec. 13. The Revenue appealed against these decisions.Assessment Year 2003-04:The CIT(A) partly deleted additions made by the AO, allowing donations and expenses related to charitable purposes. The CIT(A) directed the AO to allow expenses for medicines, electrical charges, and salary. The CIT(A) held that the accumulation purpose was charitable and allowed the claim u/s 11(2). The Revenue appealed against these decisions.Conclusion:After hearing both parties, the Tribunal observed discrepancies in the application of funds by the assessee trust and the genuineness of donations. The Tribunal set aside the orders of the CIT(A) and directed a fresh verification by the AO. The appeals of the Revenue were allowed for statistical purposes.