AI Drafter 
TaxTMI 
TaxTMI 
2018 (3) TMI 1522
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....ach other. On the facts and on the circumstances of the case - 1. The Hon. Commissioner of Income Tax (Appeals) Mumbai -1, has erred in sustaining the additions of Rs. 51,50,000/- made by the ld. Assessing officers, on account of alleged non-application of funds accumulated u/s 11(2). 2. The Hon. Commissioner of Income Tax (Appeals) Mumbai-3, has erred in disregarding the payments of Rs. 1,00,00,000/- made by the appellant of the builder and considering the same as application of funds accumulated u/s 11(2) of the Act. 3. The Hon. Commissioner of Income Tax (Appeals) Mumbai-1 has erred in uphelding the Ld. Assessing Officer's finding that the payments were made to the builder only after 31/03/2011, when the assesses had provided sufficient documentary evidence to prove to the contrary,and the action of the assesses has been held to be invalid. 4. The appellant craves leave to add to, alter, vary, amend or delete any or all of the above grounds of appeal." 3. The brief facts of the case are that the assessee trust is registered u/s. 12A of the Act and also the assessee is registered with Charity Commissioner, Mumbai. The assessee w....
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....gned on 25.10.2011 between the builder and the assessee. The AO asked the assessee that how the payment has been made in advance to the builder even before signing of the MOU, to which the assessee submitted that there is a provision of advance payment in MOU which was found to be correct by the AO. The AO observed from the receipt of payment as well from the bank statement that the assessee has paid this amount of Rs. 1 crore to the builder in the form of Demand Draft which has been debited in the assessee bank account on 30.03.2011. The AO was of view that the assessee should have made the payment by way of cheque instead of Demand Draft. The assessee replied that it is the assessee's discretion to make payment by demand draft. The AO observed that the assessee has got the debit to his account instantly by getting the demand draft issued from his bank before 31-03-2011 which as per AO lead to conclusion that the amount was not utilised before 31-03-2011. The AO issued notices u/s. 133(6) dated 20.01.2014 to the builder which was duly served . The builder was asked to submit the details of the transaction made with the assessee during the FY 2010-11 and to produce certain docum....
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....on or before 31.03.2011. Copy of the bank account has already been submitted to you for your reference. 4. Builder has issued receipts in the month of April 2011, after the drafts were cleared by the bank. Receipts of the builder has also been submitted by us for your record. 5. Since the bank has already debited the payments to our bank account on or before 31.03.2011 the amount is deemed to have been applied during the year as the money has gone out of the account. 6. Assessee has made payments by drafts to the builder by the end of March 2011 and the said drafts were cleared in the first of April 2011. Thereof, builder has recorded the receipts in April 2011 upon clearance of the drafts in his books which falls in FY 2011-12. 7. In view of the above explanations we request you treat the utilization of Rs. 1,18,07,699/- during the FY 2010-11, as having been spent by the assessee during FY 2010-11 as the money has actually gone out of the bank account of the assessee and therefore, it should be treated as utilized for the purpose. 8. Moreover, assessee is a charitable institution running an academic school, a charitable activit....
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....ere encashed in the month of August 2011 by the builder. It was submitted that the amount was paid towards the booking by way of advance for purchasing premises for school building in 3 floors and terrace in a building constructed by the builder in Thane, Mumbai. It was submitted that the this building to be built by the Builder Deep-well was adjacent to the school already run by the assessee and was a viable proposal for the assessee to expand its school keeping in view increased demand from students in the vicinity. It was submitted that Demand Draft were honoured and duly cleared and they got credited in the builders account in the month of April 2011 itself although the AO is stating that the said demand drafts got credited in builder account in August 2011. It was submitted that ultimately in 2016, the three floor along with terrace were given to the assessee by the builder Deal Well Developers. The assessee also produced its audited account which is placed in paper book to show that advances were paid towards school premises as is appearing in the assessee audited books of accounts of Rs. 1 crore. The Ld. DR on the other hand relied upon the order of the authorities below and....
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....ruction/Repairs of Bldg. And addition to fixed assets Building & Fixed Assets 14410000 2008-09 2600000 430000 Construction/Repairs of Bldg. and addition to fixed assets Building & Fixed Assets 16580000 2009-10 NIL 840000 Construction/Repairs of Bldg. And addition to fixed assets Building & Fixed Assets 15740000 2010-11 NIL NIL NA NA 15740000 2011-12 2715000 1,18,02,699 Construction/Repairs of Bldg. And addition to fixed assets Building & Fixed Assets 6652301 The assessee had contended that it had given drafts of Rs. 1 crore consisting of four drafts of Rs. 25,00,000/- each to the builder M/s. Deal-Well Developers for acquiring three floors and open terrace in a commercial building to be constructed by the said builder to be used for running school in Thane, which building to be constructed was adjacent to the existing school run by the assessee and was considered most viable by the assessee to expand its educational activities by enrolling more students keeping in view increased demand from students . The assessee has produced bank statement to evidence that the amount was debited to the tune Rs. 1 cro....