TaxTMI 
TaxTMI 
2019 (12) TMI 485
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....aw and on facts in deleting the addition of development fund of Rs. 33,46, 000/- 4) Whether on the facts and circumstances of the case is the Ld. CIT(A) justified in giving the benefit of section 11 & 12 to the assessee which the Assessing Officer disallowed by invoking the provisions of section 4.1 The Ld. CIT(A) has failed to appreciate that the assessee paid huge rent to specified persons and the assessee has not been able to justify its reasonability. Further, the onus is on the assessee to prove the genuineness of expenditure incurred for the objects of the trust. 4.2 The Ld. CIT(A) has also not considered the fact that the decision of Hon'ble ITAT in the case of Aadharshila Education and Charitable Trust Vs. Department of Income tax, relied on by the Ld.ClT(A) has been challenged before the Hon'ble Gujarat High Court. 4.3 The Ld. CIT(A) has further failed to appreciate that the assessee had incurred huge expenses on traveling without any justification or clarity/purpose as to why relatives, trustees and the chairman of the society had carried out the travelling , which were for the personal benefits and advantage of the trustees and....
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.... spend the same at any moment as and when required for the benefit of the students. The assessing officer has not accepted the explanation of the assessee and was of the view that said development fund was part of one time admission fees and it was not a voluntary contribution. The assessing officer observed that development fees was a revenue income of the assessee and not capital receipt as claimed by the assessee and the assessee was not entitled for exemption u/s. 11(1)(d) of the act. Accordingly, the assessing officer has treated the one time admission fees of Rs. 33,46,000/- as revenue receipt and added to the total income of the assessee. 4. The assessee has also noticed that assessee has paid building rent of Rs. 3,51,06,658/- to Smt. Manju Goenka and Shri Ramesh Prasad Goenka HUF and both these persons were trustees of the assessee trust. The assessing officer has stated in assessment year 2010-11 on the basis of similar fact it was held that undue benefit was taken by the trustee and specified person and accordingly, provision of section 13(2) was applied to the case of the assessee. The assessing officer has also stated that there appeared to be a business motive o....
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....-11 decided the issue against the Revenue and in favor of the assessee vide order dated 14-9-2017. The relevant extract of the order is extracted below. "14. The Revenue's last substantive ground pleads that the CIT(A) has erred on facts and in law in reversing Assessing Officer's action disallowing depreciation of Rs. 133,60,206/- made on the ground that the assessee could not have claimed the corresponding sums spent on acquisition of fixed assets for the purpose of deduction as well as for the impugned depreciation since the same amounted to a double deduction case. We find that this issue is no more res integra as hon'ble jurisdictional high court's decision in CIT vs. Seth Manilal Ranchhodlal Bhavan Trust 188 ITR 598 , a co-ordinate bench in ITO vs. Sardar Public Charitable Trust ITA No.285 & 286/Ahd/2013 alongwith CIT vs. Tiny Tots Education Society (2011) 330 ITR 21 (P&H) and DIT vs. Shri Vile Parle Kelavani Mandal (2015) 378 ITR 593 (Bom.) have already adjudicated the very issue in assesee's favour. It is also brought to our notice that the legislature has now amended Section 11(6) of the Act by the Finance Act, 2014 w.e.f. 01.04.2015 denying such a double deductio....
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....d and the A.O. has considered the said Development Fund as income because he has treated the Trust as AOP. As I have already decided the status of the appellant as 'Registered Trust' as per sec. 11 and 12 of the Act in Ground No. 1, 2 & 3 (supra). Therefore, this addition does not survive. Even otherwise, on the merits as submitted in the written submission, the Appellant has received the said Development Fund and also used for the purpose for which it was received. The said fund was received earmarked as "Development Fund" and it was used for the development activities, as is apparent from Audited Balance sheet submitted during the appellate proceedings. It is also seen that as per balance sheet, the entire fund has been utilized. The balance sheet indicates the head of "Development Fund (Utilised) Account" of Rs. 1,66,15,000/-, which is more than the alleged Development Fund of Rs. 32,69,000/-. Thus this ground of Appeal is allowed and the A.O. is directed not to consider the development fund as part of income." 9. Heard both the parties. Relevant findings perused. It is no more in dispute that this assessee is a registered trust(supra). Learned counsel for the a....
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....cating the assessee to be utilizing vacant space alongwith land and building whilst concluding that the payments in question cannot be held as excessive ones. It has further come on record that the assessee had been paying similar rents in preceding assessment years as well. It places on record assessment order(s) pertaining to earlier assessment years not showing any such disallowance. The Revenue fails to rebut all these findings with the help of any cogent evidence on record. We therefore affirm the CIT(A)'s findings under challenge. The Revenue's second and third substantive grounds are accordingly rejected." 19.1. As the issue on hand is identical to the facts of the issue as discussed above, therefore we do not find any reason to interfere in the finding of the learned CIT-A. Hence the ground of appeal of the Revenue is dismissed. 20. The fourth issue raised by the Revenue is that learned CIT (A) erred in deleting the addition made by the AO on account of capital expenditure amounting to Rs. 8,10,86,589.00. 21. The assessee during the year has incurred an expense of Rs. 8,10,86,589.00 on account of addition to fixed assets on which the assessee also....