TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 1082
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....5) of the Income Tax Act, 1961. 3. The ld CIT(A)-II has erred at law as well as in facts in disallowing the net amount of Rs. 269,69,91,775/- of the development expenditure and development revenue treating it as capital expenditure as on account of change in accounting policy and further disallowing a sum of Rs. 21,13,94,421/- out of the establishment and administrative expenses to the extent of 5% of the total development expenditure related to such change. 4. the ld CIT(A)-II has erred at law as well as in facts in disallowing Rs. 1,07,02,423/- on account of expenses on shooting range. 5. The ld CIT(A)-II has erred at law as well as in facts in disallowing Rs. 5,00,00,000/- being expenditure as contribution for Deendayal Medical Hospital at Jaipur assuming them as donation to charitable institutions, further doubly disallowing the same. 6. The ld CIT(A)-II has erred at law as well as in facts in disallowing Rs. 1,74,22,857/- on account of amortization of expenditure on tree guard/wire fencing being provided for growing trees in the JDA region. 7. The ld CIT(A)-II has erred at law as well as in facts in not providing proper opportunity of being heard to the appellan....
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....since not ascertained by the management as reported in the respective notes." The ld Assessing Officer observed that the assessee had not followed existed accounting principle. He has not satisfied about correctness or completeness of the account of the assessee and in view of Section 145(3), the assessment was made in manner provided U/s 144 of the Act as a best assessment. The ld Assessing Officer further held that no proper explanation was furnished before him as to how the incurred expenditure of last year shows as closing development fund would be admissible as expenses during the year specifically when the assessee is followed cash system of accounting. Similarly, it could not be explained before him as to how the change method is as per existed accounting norms and practices. Accordingly he rejected the accounting system followed during the year under consideration. He applied the last year method of accounting, the deposit shown in the income and expenditure account was required to be reduced by Rs. 2,69,69,91,775/- to make it comparable with the last year method. It does not include 5% of administrative expenditure, which was the practice till last year, which was worke....
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....on was withdrawn by order dated 29/12/2011 by ld CIT-II, Jaipur. The ld CIT(A) has observed that when the assessee's registration has been withdrawn for the income tax purposes, the institution is not charitable. This was withdrawn by the ld CIT in view of the amendment made in Section 2(15) wherein charitable purpose by way of advancement of any other object of general public utility had been added in this Section, advancement of any other object of general public utility shall not be charitable purpose in certain circumstances that is if it involves the carrying on any activities in the nature of trade, commerce or business, or any activity or rendering any service in relation to any trade, commerce or business, for a cess or fee on any other consideration, irrespective of the nature of use or application, retention on the income from such activity. The ld CIT(A) analysed Section 2(15) of the Act and also considered circular No.8/2008 dated 19th December, 2008. As per ld CIT-II, Jaipur order, JDA does not pay anything for cost of land as the land is vested to it by the State Govt. The revenue share between Jaipur Nagar Nigam and government of Rajasthan. Some of the receipts were ....
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....d expenditure statement as per accounting note 9 of A.Y. 2008-09. According to which, 5% of development expenditure excluding grant given is capitalized as financial and the administrative overheads. In the result, the appeal of the assessee enhanced with respect to one ground and other grounds has been dismissed or allowed. The ld CIT(A) had allowed depreciation on fixed assets at Rs. 1,98,41,604/- on the ground that income has been assessed as business income, disallowance of deprecation. Accordingly she allowed depreciation. 4. Now both are in appeals before us. The ld AR of the assessee has reiterated the arguments made before the ld CIT(A) and argued that the Hon'ble ITAT has granted registration U/s 12AA of the Act w.e.f. 14/3/2007. The Assessing Officer has to allow the benefit given in Section 11 and 12 of the Act to the assessee Trust. There is no doubt that the assessee's activities are charitable and are not covered U/s 2(15) of the Act. The Hon'ble Bench has considered this issue also at the time of allowing the registration in favour of the assessee. He further argued that in case of Trust, there is application of income in an acquired assets and thereafter depreciati....