TaxTMI 
TaxTMI 
2015 (8) TMI 77
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....ts of the case in confirming addition of Rs. 13,35,707/- on account of Dharmarth Receipts. 2.2. That Dharmarth collected at the time of booking & delivery is accounted for straight away by crediting to "Dharmarth" account and entire amount is paid to charity by account payee cheques by debiting to "Dharmarth" account. 2.3. That it is ethically wrong to treat the amount collected as dharmarth as an income. 2.4. That as per CBDT Circular No.77-F No.Audit 9/73-79/DIT dated 21.03.1979 & decision of Hon'ble Supreme Court in the case of CIT vs. Bijli Cotton Mills (P) Ltd. 116 ITR 60, it has been clarified that "Dharmardha" amounts could not be regarded as part of the price. 2.5 That charitable trusts to whom payment was made are r....
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....s of his decision in assessee's own case in the preceding assessment year i.e. 2009-10. 4. The Ld. Counsel for the assessee, Mr. P.N.Arora, Advocate, at the outset pointed out at page 3 of AO's order in para 2 and in Ld. CIT(A)'s order in para 4.2 that the facts in the present case are similar to the facts in assessee's own case for the assessment year 2009-10 which matter has travelled to the ITAT, Amritsar Bench and the Tribunal in its order in ITA No.437(Asr)/2012 vide order dated 05.09.2014 has deleted the addition so made. The said order of the Tribunal is placed on record PB 12 to 23. Accordingly, the Ld. AR prayed to allow the appeal of the assessee by following the earlier order of ITAT, Amritsar for the assessmen....
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....ear 2009-10 and the addition so made has been directed to be deleted vide order dated 05.09.2014 in ITA No.437(Asr)/2012. For the sake of convenience, the facts of the case and our decision therein in the assessment year 2009-10 is reproduced hereinbelow: 3.Apropos ground no. 1, the Assessing Officer made an addition of Rs. 15,99,471/- on account of Dharmarth Receipts collected along with freight receipt, not reflected by the assessee in its profit and loss account. 4. The Assessing Officer observed that the receipts were directly related to the business of the assessee company; that the receipts were received not by a trust created for the purposes of charity in nature, but by a company doing business and trading; and that no evidenc....
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....e not taxable; that this Circular is binding on the Department and has illegally not been abided by; and that while wrongly holding that the objects of the assessee company were not charitable, the learned CIT(A) has failed to take into consideration Clause no. 30 of the memorandum and articles of association of the assessee company [copy at APB 34, relevant portion at APB 34(d)]. 8. The learned DR has placed strong reliance on the impugned order, contending that the objective of the assessee company is commercial and there was no reason to collect Dharmarth from its clients; and that the assessee has not been able to establish that the objective of the assessee company was to carry out charity. 9. It is not disputed that Dharmarth re....
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....he authorities below in this regard, raised only for the first time, during the year 2009-10, is that the receipt is not by a charitable trust, but by the assessee company, which is doing business and trading. This, according to us, is not at all acceptable. Once the receipts are routed as such to a charitable trust by the assessee company and the nature of that trust has not been questioned, we hold that the receipts are Dharmarth receipts and nothing else. The consistent acceptance of such receipts by the Department itself, for as many as eight earlier assessment years, mandates the acceptance of such receipts of the assessee during the year under consideration also as Dharmarth receipts, when no change in facts has been pointed out by th....