TaxTMI 
TaxTMI 
2019 (5) TMI 24
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Commissioner of Income Tax (A) has erred in law and facts in deleting the addition/disallowance of Rs. 28,80,000/- ignoring the fact that the assessee could not substantiate it's claim with documentary evidences and also could not prove the genuineness of transactions and credit worthiness of the people who have donated. Further the judgment of the jurisdictional High Court in the case of CIT Ghaziabad Vs. Uttaranchal Welfare Society is related to noncorpus donations. 3. Ld. Commissioner of Income Tax (A) has erred in law and facts by deleting the addition of Rs. 2,11,95,398/- ignoring the fact that the assessee trust did not furnish the respective bank pass books, copies of acknowledgements of income tax returns to prove the genuineness of the transactions and credit worthiness of the parties who have given unsecured loans and also the assessee trust did not furnish the postal addresses of the concerned parties to enable A.O. to enquire about the details of transactions. 4. Ld. Commissioner of Income Tax (A) has erred in law and facts by deleting the addition/disallowance made by the AO on account of help to poor students amounting to Rs. 58,22,900/- out of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y allowed relief to the assessee to the extent of Rs. 58,22,900/-. 2.4 Arguing last ground of appeal, Learned D. R. submitted that assessee had violated the provisions of section 40(a)(ia) of the Act as the assessee had not deducted TDS on payments made to K. Lounge Tailors and therefore, Assessing Officer had rightly made the disallowance which the learned CIT(A) has wrongly allowed. 3. Learned A. R., on the other hand, submitted that the extra amount received by the assessee from the students in the form of book bank fees, dress charges, examination fee and misc. fees were not part of the tuition fee as these were specific charges which the assessee had received on the specific request of the students. As regards dress charges, Learned A. R. submitted that the students of the institution belong to various adjoining villages of the area and on their request only the dress were made for them and accordingly they were charged for the dress charges. Learned A. R. in this respect invited our attention to page 171 of the paper book where the dress expenses incurred by the assessee were placed. Learned A. R. submitted that these dress expenses were incurred by the assessee against....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e copy of accounts of these depositors placed at pages 98 to 145 of the paper book. Our specific attention was invited to page No. 99 where copy of account of Avinash Kumar Agarwal was placed and wherein the opening balance was mentioned at Rs. 9,00,000/-. Our attention was also invited to page No. 106 of the paper book where copy of account of Naresh Kumar Agarwal was placed wherein also there was opening balance. Our further attention was invited to page No. 129 of the paper book where copy of account of Ikrar Ahmad Contractor was placed where again the opening balance was there. It was submitted that in the earlier year there was no such addition made on account of these receipts as these were genuine unsecured loans raised by the assessee and the funds were received through cheques. It was submitted that all these details were submitted in the preceding year also and Assessing Officer had not made any addition and in this respect invited our attention to copy of assessment orders placed at pages 63 to 80 of the paper book. Learned A. R. submitted that during assessment proceedings all the documents including bank account and PAN of depositors were furnished. Our specific att....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs of learned CIT(A) in this respect are quite relevant which is reproduced below: "5.3 I have examined the appellant contention and found that it has force. The appellant argue that in earlier years the AO had granted exemption u/s 11. There was no change of activities in the current year to warrant such addition. The appellant had been getting the benefit of section 11 since AY 2010-11 and 2012-13 and the AO had granted them on similar activities. There was no new fact or situations that were brought in record to deny the benefit of section 11 to the appellant in the current year. Nor has the AO established the fact of profiteering directly or indirectly by the appellant. Perhaps it was not necessary on his part to do so since during that point in time the registration u/s 12AA as a charitable organisation was not available to the assessee. Therefore the decision of the AO may have been coloured due to this fact. Even then, rejection of benefit of section 11 should have been done only after proper examination. 5.4 In the instant case the AO has not, actually established 'profit motive' put of the fees collected by the appellant trust. He has not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....U to take appropriate action. The A.O. cannot step into the shoes of the UPTU to determine the excess amount, if any, charged. Further, it is now a settled law that "Education" per se is a charitable activity and even if some surplus is earned by the trust while imparting education, the same cannot be considered as a business activity as long as the funds of the trust are used for the purposes/ objects of the trust. In this view of the matter, the observations of the A.O. that the assessee was indulging in a business activity is not in accordance with the settled law and, therefore, it has to be held that the surplus of the trust is not to be treated as business income. Accordingly, this addition of Rs. 3,65,41,344/- is hereby deleted." 4.2 In view of the above facts and circumstances and following the judicial precedent, ground No. 1 of the appeal of the Revenue stands dismissed. 5. Now coming to ground No. 2 regarding deletion of addition of Rs. 28,80,000/-, we find that the Assessing Officer has made this addition by holding that the assessee had not produced copy of income tax return and bank statement of the donors. However, we find that the assessee had furnished comple....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ments and copy of ITRs which were filed before the authorities below to prove the genuineness of creditworthiness of the unsecured loan holders. It was further argued that out of five unsecured loan holders, in the case of the three account holders there were opening balances and for which the Assessing Officer had not made any addition. The detailed submissions were made to learned CIT(A) regarding these depositors which the learned CIT(A) has noted in his order at pages 19 to 21. The learned CIT(A) in his findings has held that one of the depositor Avnish Kumar was the Trustee and Chairman of the society and similarly Naresh Kumar another depositor was Trustee. The learned CIT(A) has further held that Avnish Kumar was partner in Shree Ganga Khandwari Udyog which had advanced Rs. 20,00,000/-. The findings of learned CIT(A) in this respect are contained in para 8.1, which for the sake of convenience are reproduced below: "8.1 It is seen that the AO has made a number of allegations with regard to the details he had required which were not furnished before him such as postal address, proof of identity, ITR, copy etc. I have gone thus the submission of the appellant. It will ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessee] 3. [2015] 54 taxmann.com 216/230 Taxman 165 (Allahabad) HIGH COURT OF ALLAHABAD In the case of Commissioner of Income-tax, Meerut, v. Avant Grade Carpets Ltd. Copy of the same is at page 78-79 of the case law index. Section 68 of the Income-tax Act, 1961 - Cash credits (Loan) -Assessment year 2009-10 - Whether where appellate authorities after considering balance sheet of lender as well as confirmatory certificates in respect of advances given to assessee, deleted addition made by Assessing Officer under-section 68, order so passed did not give rise to any substantial question of law - Held, yes [Para 6] [In favour of assessee] 6.2 The above findings of learned CIT(A) are quite exhaustive and we do not find any infirmity. In view of the above, ground No. 3 also stands dismissed. 7. Now coming to ground No. 4 regarding relief given by learned CIT(A) for help to poor students, we find that assessee has incurred an expenditure of Rs. 62,61,703/- on account of help to poor students, the detail of which is placed at pages 162 to 170 of the paper book. The expenses booked under this head are on account of journal entries which shows that the amounts were credite....