TaxTMI 
TaxTMI 
2020 (6) TMI 129
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.... of the case, the Ld.CIT(A) has erred in law in allowing the appeal of the assessee ignoring the fact that the donations amounting to Rs. 13,Rs. 8,82,040/- were not corpus donations as the same were received without any specific direction. iii. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in allowing the claim of capital expenditure incurred during the year to the assessee ignoring that the exemption u/s 11/12 of the Act was rightly denied to the assessee. iv. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the amount of Rs. 12,35,40,420/- assessed by the AO allowing exemption to the assessee u/s 11/12 of the Act which was rightly denied by the AO. v. That the appellant craves to leave, add or amend any grounds of appeal on or before the appeal is heard or disposed of." 2. As is evident from the perusal of the grounds above, the grievance of the Revenue in the present appeal is against the order of the Ld.CIT(A) in allowing the assessee's claim of exemption u/s 11/12 of the Act, allowing its claim of corpus donations amounting to Rs. 13.18 crores and further in allowing the claim....
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....etailed arguments were made by the assessee, reproduced at para 4.3 of the order, after considering which the Ld.CIT(A) allowed the assessee's appeal in entirety, including its claim of exemption u/s 11/12 of the Act, the treatment of its donations claimed as corpus donations and the claim of utilization of donations for purchase of land. 5. Aggrieved by the same, the Revenue has come up in appeal before us. 6. In ground No.1 the Revenue has challenged the allowance of claim of exemption u/s 11/12 of the Act by the Ld.CIT(A), despite allegedly the findings of the AO that the activities of the assessee were not charitable. The findings of the Ld.CIT(A) allowing the above claim of the assessee are at para 4.4 of the order, which are reproduced hereunder: "4.4 I have perused the rival contentions and the various documentary evidences submitted in the appellate proceedings in the form of Aims & objects and Rules and Regulations of the appellant Society, the list of donations, receipt vouchers & records of corpus as well as general donations maintained by the appellant, copies of confirmations from donors and assessment orders of various years, all of which were also produced befor....
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....e Act on the basis of the same aims and objects which the AO has now found to be not in the nature of charitable as defined u/s 2(15) of the Act. He has also noted the fact that this registration has not been revoked till date. The Ld.CIT(A) has also found that the assessee has all along been allowed exemption u/s 11/12 in scrutiny assessment in the past and subsequent years also. He further also has noted that there is no change with respect to the nature of the activities in the impugned year as compared to the earlier and subsequent years. Even otherwise on merits, the Ld.CIT(A) has noted the fact that the assessee had been incurring expenditure of Rs. 20,02,167/- on running of school which being for the purpose of education qualified as charitable activities u/s 2(15) of the Act and has spent Rs. 18,67,527/- on the activities of running medical camps and old age homes which also qualified as charitable activities in the nature of medical relief to the poor u/s 2(15) of the Act. He has also noted that the lungar expenses are merely provision of food to the attendees of medical camps,in old age homes and Manav Seva Kender. The aforesaid facts have remained uncontroverted before u....
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.... used for corpus donation were marked with stamp of "Bhoomi kharidaney hetu Dhan Sewa" and receipts where no purpose has been specified and only mention that amount is received towards Sewa, were credited under 'Satsang Sewa' or general donation. This receipts issued show the purpose for which donation is received. 4.7 Further, as explained by appellant in its submissions reproduced above, out of a list of 10 donors mentioned in assessment order whose confirmations were sought by A.O, the A.O. selectively chose to reproduce confirmations regarding general donation received from two persons while ignoring the confirmations received from the others who have confirmed that the donation was made for the purpose of purchase of land. I also find that receipts of monthly corpus donation collected by branch Machiwara at no.931254 dated 09.06.2013 which has been quoted by A.O. includes all the details of names of donors, their addresses, mobile numbers and signatures as well and A.O has ignored to mention that that the amounts received are shown under the column heading 'Bhoomi Sewa'. Similar receipts for other branches at Bhabat, Derabassi, Kurali etc. which were produced before the A.O....
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....s collected under these receipts had been categorized as corpus donations by the assessee, which amount was kept in a separate bank account, separate from the general donation and also that FDRs had been made from the same which were subsequently used in subsequent years for purchase of land through issuance of cheques and drafts. The Ld.CIT(A) has also noted the fact that the assessee had maintained separate record of general donation and corpus donation and that its accounts were duly audited. The Ld.CIT(A), we find, has further noted that the observation of the AO that there were no specific directions by the donor for treating the donation as corpus donation, was based on mis-appreciation of facts since the receipts referred to by the AO for basing his observation were relating to general donations and not corpus and donations. 11. Before us the Ld.DR has been unable to controvert any of the above factual findings of the Ld.CIT(A). In view of the above since we find that the Ld.CIT(A) has given a categorical finding of fact, based on evidences produced before him, that the donations shown by the assessee as corpus donations were given with the directions that they qualified as....