TaxTMI 
TaxTMI 
2017 (2) TMI 725
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..../-, u/s 69C of the I.T. Act, 1961 when the assessee had actually admitted undisclosed income at the time of search and has also made surrender to that extent on the based on the seized documents."" 2. We have heard arguments of both the sides and carefully perused the materials placed on the record of the Tribunal, inter alia, impugned assessment first appellate orders, paper books of the assessee and revenue and also considered ratio of the decisions relied by both the parties and cited at bar. 3. The Ld. CIT (DR) submitted that the CIT (A) has erred in deleting the addition made u/s 69 C of the Income Tax Act, 1961 (for short the Act) when the assessee had actually admitted undisclosed income at the time of search and has also made surrender to that extent on the basis of seized documents. The Ld. DR further contended that as per page A-12 & 15 of Revenue's Paper Book RPB) no building has shown in the balance sheet on 22.6.2009 and as per A-1 and 2 (RPB) building has been shown to the tune of Rs. 2,87,91,723/- on 9.12.2011. The Ld. DR vehemently pointed out that before date of search balance sheet was showing no building on 22.6.2009 and after search (on 7.7.2009) and in th....
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....ld not be entitled to exemption u/s 11 of the Act if its activities are outside scope of its objects. He also contended that benefit of section 11 is available on the income and not for deemed income. He lastly submitted that the baseless order of CIT(A) may be set aside by restoring that of the AO. 5. Replying to the above contentions, the Ld counsel of the assessee submitted that assessee is a trust created for charitable objects and thus it has been granted registration u/s 12 A of the Act. Assessees' premise is situated at village Dinarpur and the Goel group is in village Taroli. He further pointed out that the showing the source of Land and Funds used for building the assessee submitted detailed three letters all dated 7.9.2011 (RPB-Page 191 to 193) before the AO which manifest that Goel International Pvt. Ltd., and Goel Overseas gave Rs. 2.5 Crore each total Rs. 5.00 Crore for Land and Goel International gave cash donations of Rs. 2,87,91,723/- during AY 2008-09 and Rs. 3,21,88,455/- during AY 2009-10 to pertaining to AY 2009-10 and 2010-11 to corpus fund for construction of Building thus no addition can be made u/s 69 C of the Act. The Ld. Counsel vehemently pointed out t....
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....e that the CIT (A) granted relief to the assessee with following observations and conclusion: The trust deed of the assessee dated 7.4.2008 is placed at pages 20-48 of the paper-book filed. The head office is at 1102, Sector-13, Urban Estate, Karnal. The aims and objectives for which the trust is established are relief of the poor, education, health, social welfare, advancement of technology, disaster prevention and management, rural upliftment and advancement of any other object of general public utility not involving the carrying on of any activity for profit. The seized document A-12 is placed from pages 50 to 120 of the PB. Perusal of the same makes it clear that the expenditure is towards construction activity in as much as expenditure has been debited to Dumper, driver, crusher, Plant-operator, unloading cement, general repairs etc. At some pages viz. page 57, it is also written as 'Rice Account' where Rs. 2700/- has been credited on 9.12.2008. Similarly page 59 shows for instance debit of Rs. 2,50,000/-to Shri Vinod Goel on 14.12.2008, as also in few other places. It is seen from page 48 of the PB that Shri Vinod Goel is the President and also the promo....
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....n we have to take the accounts of the assessee with reference to the receipts and deduct therefrom the expenses necessary for earning or looking after that income. The net amount that remains would be available for distribution or application for charitable purpose. In applying the income for charitable purposes, even capital expenditure may be incurred. Therefore, the nature of the expenditure in the hands of the entity which receives the money is not criterion. So long as the assessee disburses the amount for charitable purposes, whether the amounts are utilized for capital and revenue purposes, by the charity concerned, the assessee would have complied with that part of the requirements of section 11, namely, application of the income for charitable purposes. The authorities will have to find out as to whether they are really charitable purposes or not. Subject to such examination, the application of the income for charitable purposes will have to be excluded and it is only the balance that would require examination for finding out whether the assessee has complies with the rule of accumulation to the extent of Rs. 10,000/- or 25 per cent of the income, whichever is higher. ....
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....such financial year;] of peak 10. In the present case, the Assessing Officer made addition under Section 69C of the Act by alleging four points viz., (I) the trust has violated the provisions of Section 11(1)(d) of the Act (II) the assessee failed to explain the source of fund used in cash expenditure for the purpose of construction of building (III) the assessee never took the plea that the amount of peak has been incurred on expenditure made on behalf of M/s Galaxy Global Educational Trust by M/s Goel International Private Limited (IV) there is no entry of Rs. 6,09,80,178/- in the books of accounts of the assessee hence expenditure mentioned in the seized documents from the premises of the assessee remained unexplained. 11. Before we proceed to analysis the fact of the case in the light of provisions of section 69C of the act and other relevant provisions it would be necessary to consider the ratio of the decision of Hon'ble High Court of Delhi in the case of DIT (E) vs. Keshav Social and Charitable Foundation (Supra) and DIT (E) vs. Ronak Education Foundation (Supra). In these decisions the Hon'ble High Court held that the addition under section 68 of the Act cannot be mad....
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.....03.2009 mentions that the assessee trust receive voluntarily contributions and corpus donations represents acquisitions of assets i.e. land building etc. on behalf of the trust by the trustee's. Page 199 of the (APB) further manifest that the assessee trust also received corpus fund from Shri Devi Chand, Vinod Goel, Vijay Goel, Krisnhan Goel, Raj Bala, Rajni Goel, Seema Goel, with specific directions as per notes to accounts (Supra), In the notes to accounts it has also been mentioned that the corpus donations which are represented by acquisitions of assets such as land building etc. by the trust then it cannot be held that voluntarily contributions received by the assessee with specific directions does not form part of corpus donations. Hence, first allegation of the AO is not sustainable. 13. The next allegation made by the AO is that the assessee could not explained, the source of expenditure incurred on construction of building. On this issue as we have noted earlier that the assessee by way of confirmation letters of the donors placed at revenues papers book page 94 and 95 established that the impugned voluntarily contributions were made by donor M/s Goel International Pvt....
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....sessee trust on construction of building has to be held as explained and the same amount which was surrendered and taxed in the hands of M/s Goel International Pvt. Ltd. cannot be taxed again in the hands of assessee trust under section 69C of the Act, and obviously it would amount to double taxation on the same amount which is not permissible as per well accepted principle of the tax jurisprudence. 15. So far as third allegation of the AO that the assessee never took the plea that the amount of peak has been incurred on expenditure made on behalf of M/s Galaxy Global Educational Trust by M/s Goel International Private Limited is concerned we are of the view that this plea was not relevant to be taken by the assessee trust because when it is explaining the source of expenditure incurred in the construction of building that the amount was received from M/s Goel International Pvt. Ltd. with specific directions as corpus fund then plea of then the plea of amount of peak may be relevant for M/s Goel International Pvt. Ltd. but not in the case of present assessee therefore this allegation of the AO does not have lags to stand on the justified basis. 16. Regarding allegation of no ....