TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 453
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....nt Year 2004-05 1 There is no jurisdiction either in law or on facts for the Ld CIT (A) to sustain the addition of Rs. 15,00,000/- as alleged unexplained expenditure for an amount allegedly paid by Dr. Sunil Kapoor to S.N Sharma. 1.1 That on the facts and in the circumstances of the case, the addition of Rs. 15 Lacs as alleged' unexplained expenditure is not sustainable in law because no incriminating material seized from the appellant during the course of search and further no assessment was pending on the date of search and therefore the impugned addition is beyond the scope of Section 153 A. 1.2 That the addition of Rs. 15 00,000/- was based on a paper seized from the residence of S.N Sharma and was not seized from the Appellant society and thus the presumption U/S 292C cannot be apply against the Appellant society. 1.3 That the Ld. CIT(A) was not justified in concluding that the amount was not recorded in the books of the Appellant society. That said finding is contrary to the material placed on record before the Ld. AO and Ld. CIT (A). 1.4 That the entire addition of Rs. 15,00,000/- is based on material seized from the premises of a third person and to such seize....
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....terprises by making reliance' on the pre-search affidavit submitted by Sunil Khandewal & Narendra Sharma in the search case of Bharat Kothari Group wherein infact the said Sunil Khandewal and Narendra Sharma were not a key person of M/s Saluja Enterprises and M/s Prateek Enferprises respectively and also the said affidavits do not mention the name of Appellant society. 1.3 That the Ld CIT (A) failed to appreciate the settled principle that addition can only be on basis of some incriminating material unearthed during course of search which was not produced or not already disclosed or made known in course of original assessment and in the present case the purchase of CBT Bars from M/s Prateek Enterprises and M/s Saluja Enterprises was duly recorded in books of Account of Appellant for A. Y 2006-07 and copies of ledger account of both vendors, bank statement, copies of purchase bill of CBT Bars, copies of weighing slip, certificate from contractor, sub contractor and purchase order was duly placed during proceeding before Ld. AO and Ld. CIT (A) to prove genuineness of transaction. 1.4 That the Ld. CIT (A) was not justified in concluding that a material seized from a third part....
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....n infact the said Sunil Khandewal and Narendra Sharma were not key persons of M/s Saluja Enterprises and M/s Prateek Enterprises respectively and also the said affidavits do not mention the name of Appellant society. 1.3 That the Ld CIT (A) failed to appreciate the settled principle that addition can only be on basis of some incriminating material unearthed during course of search which was not produced or not already disclosed or made known in course of original assessment and in fact of present case the purchase of CBT Bars from M/s Prateek Enterprises and M/s Saluja Enterprises was duly recorded in books of Account of Appellant for A. Y 2007-08 and copies of ledger account of both vendors, bank statement, copies of purchase bill of CB T Bars, copies of weighing slip, certificate from contractor, sub contractor and purchase order was duly placed during proceeding before Ld. AO and Ld. CIT (A) to prove genuineness of transaction. 1.4 That the Ld. CIT (A) was not justified in concluding that a material seized from a third party can also be termed 'as incriminating documents for the purpose of Section 153A addition. Such a finding by the Ld. CIT(A) is contrary to the provisi....
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....so the said affidavits do not mention the name of Appellant society. 1.3 That the Ld CIT (A) failed to appreciate the settled principle that addition can only be on basis of some incriminating material unearthed during course of search which was not produced or not already disclosed or made known in course of original assessment and in fact of present case the purchase of CBT Bars from M/s Prateek Enterprises and M/s Saluja Enterprises was duly recorded in books of Account of Appellant for A. Y 2008-09 and copies of ledger account of both vendors, bank statement, copies of purchase bill of CBT Bars, copies of weighing slip, certificate from contractor, sub contractor and purchase order was duly placed during proceeding before Ld. AO and Ld. CIT (A) to prove genuineness of transaction. 1.4 That the Ld. CIT (A) was not justified in concluding that a material seized from a third party can also be termed 'as incriminating documents for the purpose of Section 153A addition. Such a finding by the Ld. CIT(A) is contrary to the provision of Section 153 and Section 292C of the Act. In fact such material seized from the premises of a third persons search can only be used as per _the ....
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.... payment for protecting the assessee society from prolonged litigation should have been allowed by the Ld. CIT (A) as the necessary evidence & documents pertaining to the said submission were accepted as genuine by the Ld. CIT (A) and Ld. AO. 2. That there is no justification either in law or on facts for the Ld. CIT (A) to confirm the addition of Rs. 36,08,666/- as alleged benefit given to M/s Siddharth Kapoor Infrastructure Pvt Ltd in violation of section 13(I)(c). 2.1 That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in denying the exemption u/s. 11 by holding that the case of appellant hit by section 13(I)(c) read with section 13(2)(a) and section 13(I)(d) and that too disregarding the fact that the M/s Ayushmati Educational Society, does not fall in the category of (he person referred under section 13(I)(c) read with section 13(2)(a) and section 13(I)(d) of the Act. 2.2 That on the facts and in the circumstances of the case, the Ld. CIT (A) erred in confirming the addition of Rs. 36,08,6661- on account of loan given to M/s Ayushmati Educational Society registered under Section12A in....
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....n u/s 11(1)(a) of the Act, even though the assessee has violated the provisions u/s 13(1)(c) r.w.s 13(3) of the act and the provisions of section 11 & 12 are not applicable to the case of the assessee society? 4.On the facts and circumstances of the case, whether the Ld. CIT(A) is correct in directing the AO to allow deduction on account of Capital expenditure even though the assessee has violated the provisions of section 13(1)(c) r.w.s 13(3) of the Act and the provisions of section 11 and 12 are not applicable to the case of assessee society? 5.Any other grounds may be adduced at the time of hearing. IT(SS) A No.127/2019 Assessment Year 2009-10 1. On the facts and circumstances of the case, whether the Ld. CIT(A) is correct in directing the AO to allow exemption u/s 11 of the Act, even though the assessee society has violated the provisions of 13(1)(c) r.w.s 13(3) of the Act, thereby the provisions of sec 11 or 12 are not applicable to the case of assessee society? 2. On facts and circumstances of the case, whether the Ld. CIT(A) is correct in directing the AO to allow deduction u/s 11(1)(a) of the Act, even though the assessee has violated the provisions u/s 13(1)(c) r....
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.... search proceedings no incriminating material or evidence was found or seized regarding the acquisition of asset during merger with M/s Vedica Education Society which could justify disallowing such depreciation. This addition is contrary to the provisions of section 153A. IT(SS) A No.75/Ind/2019 Assessment Year 2009-10 1.The learned CIT (Appeals) erred in. law and on facts in confirming the action of the learned AO in denying the benefit of exemption u/s 10 (23c) (vi) of the ITA, 1961 . 1.1 The learned CIT (Appeals) failed to appreciated that the Appellant society for the year under consideration was exempted u/s 10 (23c) (vi) of the Income tax Act, 1961 and the appellant had specifically mentioned the factum of availability of such exemption in its return of income. 1.2 That the CIT (A) erred in holding that for the year under consideration the benefit under section 11 and u/s 10 (23c) (vi) cannot be claim simultaneously without appreciating the fact that the amendment for taking benefit either under section 11 or u/s 10 (23c) was introduced only by Finance (No.2) Act, 2014 r/w (Circular NCJH112015, dated: 21.1.2015) and thus prior to 2014 the appellant could claim exempti....
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....ng merger with M/s Vedica Education Society which could justify disallowing such depreciation. IT(SS) A No.76/Ind/2019 Assessment Year 2010-11 1.The learned CIT (Appeals) erred in law end on facts in confirming the action of the learned, AO in denying the benefit of exemption u/s 10 (23c) (vi) of the ITA, 1961 . 1.1 The learned CIT (Appeals) failed to appreciated that the Appellant society for the year under consideration was exempted u/s 10 (23c) (vi) of the Income tax Act, 1961 and the appellant had specifically mentioned the factum of availability of such exemption in its return of income. 1.2 That the CIT (A) erred in holding that for the year under consideration the benefit under section 11 and u/s 10 (23c) (vi) cannot be claim simultaneously without appreciating the fact that the amendment for taking benefit either under section 11 or u/s 10 (23c) was introduced only by Finance (No.2) Act, 2014 r/w (Circular No.112015, dated: 21.1.2015) and thus prior to 2014 the appellant could claim exemption both u/s 10(23C)(vi) and section 11. 2.That on the facts and in the circumstances of the case, the Ld. CIT(A) and Ld. AO erred in confirming the disallowance of legitimate de....
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....ct in directing the A.O to allow deduction of Rs. 7,83,19,820/- in A.Y 2010-11 u/s 11(1)(a) of the act, even though the assessee society has violated the provisions of sec 13(1)(c) r.w.s 13(3) of the Act and hence exemption u/s 11 are not applicable to the assessee society? 3. Whether on facts & circumstances of the case, Ld. CIT(A) is correct in directing the A. O to allow deduction of Rs. 17,41,75,826/- in A. Y 2010-11 as application of income as capital expenditure, even though the assessee society has violated the provisions of sec 13(1)(c) r.w.s 13(3) of the Act and hence exemption u/s 11 are not applicable to the assessee society? 4.Whether on facts & circumstances of the case, Ld. CIT(A) is correct in deleting the addition of Rs. 9,39,890/- for the A.Y 2010-11 on interest free loan given to sister concern violating the provision of sec 13(1)(c) r. w.s 13(3) of the Act even though no proper explanation or details submitted before the A. O during the assessment proceedings? Any other ground may be adduced at the time of hearing 4. As the issue raised in all these appeals are mostly common and the assessee(s) relate to same group, these were heard together at the request....
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....d same were decided in favour of the assessee. 9. In the instant appeal at the instance of assessee pertaining to A.Ys.2004-05, 2006-07 to 2009-10, during the course of assessment proceedings various observations were made by the Ld. AO alleging that the assessee society has directly or indirectly used or applied the Sciety's, fund for the benefit of persons referred to in section 13(3) of the Act, which thus disentitles the assessee to claim benefit of exemption u/s 11 of the Act. Ld. AO after considering the submissions of the assessee was of the view that the assessee is not entitled to claim benefit of exemption u/s 11 of the Act in view of the following additions made for various AYs: i) Addition at Rs. 15 lakhs towards unexplained expenses debited in the name of Shri S. N. Sharma for A.Y. 2004- 05 ii) Additions for unexplained expenses/bogus purchase from M/s. Prateek Enterprises & M/s. Saluja Enterprises at Rs. 1,09,43,000/-, Rs. 5,27,000/- & Rs. 2,85,000/- for A.Ys. 2006-07, 2007-08 & 2008-09. iii) Addition at Rs. 28,51,523/- towards bogus payment to Shri S.N. Reddy for A.Y. 2008-09 iv) Addition at Rs. 36,08,666/- for excess payment made on behalf of Ayushmati Educ....
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....ained expenditure for the amount paid to Shri S.N. Sharma. 16. Facts pertaining to this issue are that during the search a loose paper Annexing A-1/1/6, page no.38 was seized from the residence of Shri S.N. Sharma which was a deposit slip of State Bank of Indore in the account in the name of Shri S.N. Sharma wherein Cheque No.072347 dated 30.01.2004 for Rs. 15 lakhs was deposited. This cheque was issued by the assessee society (RKDF Education Society). Mr. S.N. Sharma stated that this amount was taken as loan. Ld. AO however, noticed that Assessee society has claimed this amount as expenditure. During the assessment proceedings it was submitted by the assessee that this was a loan but inadvertently debited under building construction account and subsequently, when the loan was repaid by Mr. S.N. Sharma, the same was credited in the building construction account and therefore, the finding that payment was not recorded is factually incorrect. Ld. AO was not convinced and made the addition. Ld. CIT(A) also appreciated the finding of Ld. AO. 17. Before us Ld. Sr. Counsel for the assessee (in short Ld. AR) submitted that firstly the alleged incriminating material was not seized from t....
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....ebiting the account of S.N. Sharma to be shown as loan given to Mr. S.N. Sharma. This mistake was subsequently rectified. 20. We, find merit in the submission of the Ld. Sr. counsel for the assessee and are of the considered view thatsince there was a mistake on the part of accountant and transaction carried out through banking channel and amount recorded in books of account, no disallowance of Rs. 15,00,000/- paid to Shri S.N. Sharma was called for. The finding of Ld. CIT(A) is thus set aside and the addition for unexplained expenses debited to Mr. S.N. Sharma at Rs. 15,00,000/- is deleted. Ground No.1 (ground No.1.1 to 1.7) raised by the assessee is allowed. The alternate ground no.2 raised by the assessee becomes infructuous and thus dismissed as infructuous. 21. The appeal of the assessee for A.Y. 2004-05 is allowed. 22. Now we take up the common issue relating to addition for alleged bogus purchase from M/s. Prateek Enterprises and M/s. Saluja Enterprises for which addition made by the ld. AO were partly deleted by the Ld. CIT(A) sustaining the addition @ 40% of total purchase of CTD(steel) made from M/s. Prateek Enterprises and M/s Saluja Enterprises. The assessee has chal....
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....ther contended that copy of affidavit belonged to Shri Sunil Khandelwal who was neither proprietor nor key managerial person in the firm and the name of society was nowhere mentioned in his statement. The appellant raised before the A.a. that department had not made any enquiry from the appellant u/s 133(6) of the Act. The appellant claimed that society genuinely purchased the material and payments were made through bank account. Appellant produced various documents before the A.O. including copies of ledger account of these firms, bank statements, copies of bills, copies of weighing slips, certificates from contractor, sub-contractor, architect, purchase order, quotation etc. The A.a. relied upon the statements of Shri Sunil Khandelwal & Shri Narendra Sharma and disallowed the relevant expenses and made addition of the same treating non-application of the income. Accordingly the A.a. made additions of Rs. 1,09,43,000/- in A.Y. 2006-07, Rs. 5,27,000/- in A.Y. 2007-08 and Rs. 2,85,000/- in A.Y. 2008-09. 24. We note that during the assessment proceedings assessee filed complete details of both the parties namely M/s Prateek Enterprises & M/s. Saluja Enterprises in order to satisfy....
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....enied. However two case laws quoted above are also related to the Bharat Kothari Group in which M/s Prateek Enterprises & M/s Saluja Enterprises were found to be bogus firms. The facts of the case laws quoted by the appellant and that of present case are different. In these case laws, the assessee is a trader and the appellate authority justifies net profit @ 6% on assumption basis on the ground that a trader who sells product must have surely purchased the material. But in the present case, the appe1lant is the end user of the material i.e. CTD Bars and genuineness of its purchases from certain firms is in question. Therefore the decision of these case laws cannot be applied in this case mutatis mutandis. However this fact is also true that the appellant may have consumed of CTD Bars in high quantity if the construction has taken place in the relevant periods. 14.10 On perusal of the audit reports of relevant financial years i.e. for F.Y. 2005-06, 2006-07 & 2007-08, I have observed that in one building namely - Building (Jatkheri) - the appellant has shown additions of Rs. 2,72,82,075/-, Rs. 1,41,18,557/- and Rs. 38,02,078/ - respectively. To take a fair assumption of consumptio....
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..... 10,00,000/- on account of two DDs of Rs. 5,00,000/- each being cancelled) in A.Y. 2006- 07, Rs. 2,10,800/- (40% of Rs. 5,27,000/-) in A.Y. 2007-08 and Rs. 1,14,000/- (40% of Rs. 2,85,000/-) in A.Y. 2008-09. Consequently, the appeal on these grounds is partly allowed. 26. Now before us Ld. Sr. counsel for the assessee firstly raised the legal grounds relying on the judgment of Delhi High Court in the case of CIT vs. Kabul Chawla(supra) that the impugned addition is beyond the scope of section 153A of the Act as no incriminating material was found during the course of search from the assessee premises. The alleged additions were based on the information from 3rd party. On merits it was contended that all the documentary evidences to prove the genuineness of purchases were filed before both the lower authorities and that the building was actually constructed is not in dispute. The certificate of Architect and contractors with regard to consumption of CTD bars are also on record. The purchases are genuine and duly recorded in the regular books of accounts and thus no disallowance was called for. It was also submitted that the impugned additions made by the Ld. AO are merely bared on....
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....m F.Y. 2003-04 to F.Y. 2009-10. You are also required to show cause as to why bogus purchases, if any debited by you should not be disallowed and added to your total income for the concerned assessment year." 29. We further notice that assessee gave detailed submissions and documentary evidences for both the parties to the Ld. AO submitting as follows: "During the F Y. 2005-06, the Assessee Society had purchased CTD Bars from Mis Prateek Enterprises, Indore worth &.40. 77 lacs and during the F Y.2007-08 of &.2.85 lacs. The same was purchased for us in construction work going in the college premises of the Assessee SOciety. Purchase Order was issued to the party after receiving proper quotation. All the payments to Mis Prateek Enterprises were made through bank account no. 121165 of Sri Satya Sui Nagrik Suhakari Bank Mydt, Bhopal. Copy of affidavit enclosed at Annexure A of the notice u/s 142(1) belongs to some Shri Sunil Khandelwal who is neither the proprietor 1101' key managerial person of the firm. In the affidavit, he himself has stated that he was merely an employee of the firm ie. M/s Prateek Enterprises and was involved in the work of providing bogus bills to part....
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....08 for construction of building of Colleges running under RKDF Education Society at Annexure A-7. *Copy of approved plan of building by Nagar Nigam, Bhopal at Annexure ..1- 8. *Ledger account of'Ameen Khan clearly showing the amount of bill booked during the year on which TDS has been properly done and deposited in the account of Income Tax Department at Annexure A-9. *Purchase Order and quotation at Annexure A-I0. *Quotation at Annexure A-II. . Regarding M/s Saluja Enterprises: "During the F. Y 2005-06, the Assessee Society had purchased CTD Bars from M/s Saluja Enterprises, Indore worth &.68.66 lacs and during F. Y2006-07, of &.5.27 lacs. The same was purchased for use in construction work going in the college premises. Purchase order was issued to the party after receiving proper quotation. All the payments to MIs Saluja Enterprises were made through bank account no. 121165 of Sri Satya Sai Nagrik Sahakari Bank Mydt, Bhopal. We humbly request the honorable Assessing Officer to kindly provide us an opportunity to cross examine. Shri Narendra Sharma in your presence so that we can also discuss specifically our matter with him because just on the basis of vague st....
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....ils prima facie shows that all the relevant ingredients necessary to prove the purchases are genuine has been filed by the assessee. Weighing slips are also annexed in the paper book along with other documents. Certificate from Architect and contractor supporting the purchase of CTD bars have been filed. The facts that the building has been constructed is not in dispute as there is an approved plan of building by Nagar Nigam Bhopal. Complete quantitative details along with bills and bank statement is on record. For total construction 841910.76 kg CTD bars (PB page 85) were consumed during A.Y. 2006-07 to 2008-09 for the construction of 3,36,764.3 sq feet area of building premise and same is certified by Architect Mr. Manoj Mishra. Ld. CIT(A) has also appreciated that the actual construction activity was carried out for which CTD bars were utilized. Disallowing of 40% of purchase by Ld. CIT(A) merely seems to be on assumption as he has not referred to any material in support of this finding. 31. We also note that total 841910.76 kg CTD bars were used for the construction of building, out of which around 73% of the CTD bars were purchased from these two parties. Since the construct....
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....erve to succeed as the documents filed before lower authorities and before us, are sufficient enough to demonstrate that the alleged purchase from M/s. Prateek Enterprises and M/s Saluja Enterprises are genuine and CTD bars purchased through bills issued by both these concerns have been utilized in the construction of the building of the society. Thus, Ld. AO was not justified in making addition of Rs. 1,09,43,000/-, Rs. 5,27,000/- & Rs. 2,85,000/- for A.Y. 2006-07, 2007-08 & 2008-09 respectively. Finding of Ld. CIT(A) is set aside and the grounds raised by the assessee for A.Ys. 2006-07, 2007-08 & 2008-09 challenging this issue of bogus purchase are allowed. Alternate ground no.2 raised for all these three years are dismissed as infructuous. 34. As regards the legal issue raised by the assessee that no addition was called for since no incriminating material relating to the alleged bogus purchase was found during the search u/s 132 of the Act at assessee premises, additions made only on the basis of 3rd party information and opportunity of cross examination was not provided, we observe that this is an admitted fact that the Ld. AO doubted the genuineness of the purchase of CTD ba....
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....ri Rawal, without either confronting this statement to the assessee, or providing opportunity to the assessee to cross examine Shri Rawal. Therefore, the reassessment order is as a result of violation of the natural principle of audi alteram partem. A statement recorded at the back of a party cannot be used against such party without confronting such statement to the party. Hence, on this score alone, the reassessment order is unsustainable in the eye of law and we hereby cancel the same. As a consequence, the order of the ld. CIT(A) is also cancelled in toto. 35. Similar view was also taken in case of Aquatic Remedies Pvt. Ltd. vs. DCIT ITANo.6356/Mum/2014 Hon'ble Coordinate Bench of Mumbai observing as follows: 24. So one thing is clear that assessee was actually purchasing goods and selling them. We have also gone through the audited statement of accounts. We find that the trading results are quantified and so also the closing stock. No adverse inferences have been drawn in these respect. The additions have been made purely on presumptions and surmises and the statement of third party i.e. M/s. Globe Pharma and others who may be providing accommodation bills but the t....
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....tion expenses during the year and the bills issued by Mr. Anees khan has not been claimed to be bogus by the revenue authorities except for the payment of Rs. 17 lac. The alleged sum has been paid through banking channel and tax has been deducted at source. Ledger account of Mr. Anees Khan, contractor for F.Y. 2008-09 in the books of RKDF Education Society is placed at page 163 wherein it appears that against bills received from Mr. Anees Khan, Rs. 1.04 cr. has been paid by the assessee society. Except for the transaction of Rs. 17,00,000/- paid by the assessee to Mr. Anees Khan on 24.12.2008, there is no contrary finding by both the lower authorities for remaining transaction which itself proves that Mr. Anees Khan is a civil contractor and has simultaneously provided the services to assessee society. Ld. CIT(A) ought to have appreciated the transaction between Anees Khan and assessee society in entirety. We, are thus satisfied with the transactions between assessee society and Mr. Anees Khan contractor and are of the considered view that alleged sum of Rs. 17,00,000/- is part of the construction cost incurred during the year and has been rightly disclosed under the head of constr....
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....AA of the Act and also holds to certificate u/s 10(23C)(vi) of the Act. He also mentioned that sum of Rs. 1,99,21,499/- paid by AESS to SKIPL was also added by the ld. AO in the hands of AESS which is under challenged in ITANo.75/2019. 44. Ld. Sr. counsel for the assessee also submitted that in assessee's own case and on identical facts i.e. amounts were given as loan to another charitable society, Hon'ble jurisdictional High Court in ITANO.236/2012 vide order dated 14.09.2015 dismissed the revenue's appeal by referring to the judgment of Hon'ble Delhi High Court in the case of Director of Income Tax (Exemption) v. Acme Education Society (2010) 326 ITR 146 (Delhi) and the judgment of division bench of jurisdictional High Court in the case of CIT vs. Maa Vaishnav Education Society, (2013) 218 Taxman 152 (MP). Placing reliance on the above sated judgment it was submitted that the alleged sum was a loan to AESS and Ld. CIT(A) was not justified in confirming the addition made by the Ld. AO without looking into the crucial fact that the appellant society AESS belongs to same group concerns. However, ld. DR supported the finding of both lower authorities. 45. We note that alle....
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....ed by the assessee. Thus, appeal of the assessee for A.Y. 2009-10 stands allowed. 47. Now we take up revenue's appeals in the case of RKDF Education Society vide IT(SS) No.126 to 128/Ind/2019 pertains to A.Ys. 2008-09 to 2010-11. 48. With regard to various grounds raised by the revenue Ld. DR vehemently argued supporting the orders of the Ld. AO. Whereas ld. Sr. Counsel for the assessee apart from relying the finding of Ld. CIT(A) also referred to the written submissions and paper book filed and contended that the ld. CIT(A) has rightly given relief , in view of the facts of the case and settled judicial precedents. 49. We have heard rival contentions and perused the records placed before us and carefully gone through the decisions referred and relied by the ld. counsel for the assessee. 50. As regards ground No.1 raised by the revenue challenging the finding of Ld. CIT(A) allowing relief to the extent of 60% of the bogus purchases and not considering the fact that such bogus expenses are held to be for the benefit of the members of the society thereby violating provisions of section 13(1)(c) rw.s. 13(3) of the Act, we observe that this issue relates to the purchase of CTD bars....
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....eged to have been deposited in the term loan of HTPL. Ld. Assessing Officer alleged this transaction as violation of section 13 of the Act. 54. Before the ld. Assessing Officer when the assessee was confronted with their transaction it was submitted that the HTPL has not availed any loan on the FDRs of the society. The loan is obtained on hypothecation of buses which were used as school buses for assessee society and M/s. Ayushmati Education & Social Society. Ld. Assessing Officer was not satisfied and disallowed the sum of Rs. 1,53,30,530/-. Ld. CIT(A) after examining the facts deleted this addition observing as follows: 20. This ground is against the addition of Rs. 1,53,30,530/- for the alleged benefit to Homebound Travels Pvt. Ltd. The A.O. has stated in the assessment order that HTPL obtained a term loan (TL A/c No. 537106390000012) for purchase of 50 buses from Union Bank of India, Bhopal and as lien for this account, the appellant had given certain FDRs worth Rs. 2,00,00,000/- for obtaining this term loan. The loan account was opened on 06.03.2008 and closed on 24.09.2009. The A.O. has alleged that the maturity proceeds of 3 FDRs of the appellant worth Rs. 1,53,30,530/- w....
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....advance to HTPL of Rs. 3,48,74,333/-. It is therefore, clear that" the pre-mature proceeds of two FDRs of Rs. 1,07,78,792/- and Rs. 22,51,177/- were included In the loan/advance amount of Rs. 3,48,74,333/- 20.3 In view of the discussion held above, the addition of Rs. 1,53,30,530/- is hereby deleted and consequently this ground of appeal is allowed. 55. We note that M/s HTPL provided the services by way of giving buses on hire to the school and colleges run by the assessee society. During the year the total buses and cars hire charges booked by the assessee society in the income and expenditure account is Rs. 77,10,342/- and advance to HTPL as on 31.03.2010 stood at Rs. 3,48,74,333/-, interest income of Rs. 43,59,500/- received from HTPL is shown by the assessee society as appearing in the interest received account placed at page 177 of the paper book. 56. Now out of the total sum of Rs. 1,53,30,530/- received from encashment of FDR of Rs. 1,07,78,792/- and Rs. 22,51,177/- was paid to the 'HTPL by assessee society. This fact is appearing from the ledger account of HTPL in the books of assessee society for F.Y. 2009-10. This ledger account also reveals that monthly buses hire c....
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....le and educational purposes and its fulfilling the objects u/s 2(15) of the Act is not in dispute by the Revenue authorities at any stage. 59. During the course of assessment proceedings Ld. AO based on his observation made some additions and disallowances alleging that the assessee had made violation u/s 13 of the Act and therefore not eligible to claim the benefit of exemption u/s 11 of the Act. When this matter was carried before the ld. CIT(A), he though confirmed some of the additions and disallowances but was of the firm view based on the judicial precedents and circular issued by CBDT that only the disallowances/additions should be taxed to maximum marginal rate but for the remaining profits earned by the charitable society benefit u/s 11 of the Act should not be denied. 60. Now this finding of Ld. CIT(A) is in challenge before us by the Revenue authorities for the benefit granted u/s 11 of the Act. We note that the benefit u/s 11 of the Act was denied by the Ld. Assessing Officer based on observations and findings about the various additions and disallowances made in the hands of assessee alleging that the assessee had made violation u/s 13 of the Act. While dealing with ....
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....verning the institution, any part of such income enures, or (ii) if any part of such income or any property of the trust or the institution (whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in sub- section (3): Section 13(1) restricts the exemption to the assessee of the income which is used/applied in various forms described in clause (a) to clause (d), meaning thereof the assessee would not be entitled for exemption of it uses/applied income in violation of fundamental principles for which the assessee is registered u/s 11 or 12. The assessing officer in this case has foudnt hat appellant society misused/misapplied its income to the tune of Rs. 36,08,666/- for the benefit of individuals responsible to run the society. Chairman of society shri R N Kapoor and his grandson Shri Diddharth Kappor, vice-chairman of the society had 50% stake in SKIPL, thus having substantial interest in SKIPL, both are covered ujs 13(3) of the Act. Furthermore, SKIPL itself is covered ujs 13(3) by virtue of provisions of clause 'e' of sec 13(3). Taking note of this" misappropriation of funds, Assess....
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....ch relevant income should be ,charged at the maximum marginal rate. 17.16 The appellant has also relied upon circular no. 387 dt. 06.07.1984 issued by CBDT titled as 'Levy of income-tax at maximum marginal rate in the case of charitable and religious trusts which forfeit tax exemption'. The relevant portion of this circular is appended below: "28.6 It may be noted that new sub-section (lA) inserted in section 161 of the IT Act, which provides for taxation of the entire income received by trusts at the maximum marginal rates is applicable only in the case of private trusts having profits and gains of business. So far as public charitable and religious trusts are concerned, their business profits are not exempt from tax, except in the cases falling under clause (a) or clause (b) of section 11 (4A) of the IT Act. As the maximum marginal rate of tax under the new proviso to section 164(2) applies to the whole or a part of the relevant income of a charitable or religious trust which forfeits exemption by virtue of the provisions of the IT Act in regard to investment pattern or use of the trust property for the benefit of the settlor, etc., contained in section 13(l)(c} and (....
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....ging whole excess of income over expenditure to tax net are hereby deleted. Consequently, these grounds of appeal are allowed. 62. Hon'ble Karnataka High Court in the case of Commissioner of Income-tax vs Fr. Mullers Charitable Institutions [2014] 363 ITR 230 (KARN) has held that, "perusal of section 13(1)(d) of the Act, makes it clear that it is only the income from such investment or deposit, which has been made in violation of section 11(5) of the Act, that is liable to be taxed and violation of section 13(1)(d) does not result in denial of exemption under section 11 to the total income of the assessee trust". 63. Further In the present context, the provisions of section 164, particularly section 164(2) and proviso thereto, are also relevant. It may also be stated here that in view of the proviso to section 164(2) and Circular No.387, dt.6.7.1984, issued by the CBDT, all the legal precedents applicable to the violations under section 13(1)(d) of the Act, will equally apply to the violations under section 13(1)(c) of the Act. 64. Before proceeding to deal with the relevant legal precedents in support of the aforesaid stand, it would be appropriate to refer to the relevant prov....
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....her property of the trust or institution is, or continues to be, made available for the use of any person referred to in sub- section (3), for any period during the previous year without charging adequate rent or other compensation; (c) if any amount is paid by way of salary, allowance or otherwise during the previous year to any person referred to in sub-section (3) out of the resources of the trust or institution for services rendered by that person to such trust or institution and the amount so paid is in excess of what may be reasonably paid for such services; (d) if the services of the trust or institution are made available to any person referred to in sub-section (3) during the previous year without adequate remuneration or other compensation; (e) if any share, security or other property is purchased by or on behalf of the trust or institution from any person referred to in sub-section (3) during the previous year for consideration which is more than adequate; (f) if any share, security or other property is sold by or on behalf of the trust or institution to any person referred to in sub-section (3) during the previous year for consideration which is less than adequa....
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....ncome of an association of persons (AOP). It clearly implies that only that part of the relevant income which is not exempt under section 11 or section 12 is brought to tax, as the income of an AOP and the balance of income of the charitable trust / institution, will remain exempt. Further, as per the proviso to section 164(2), where the whole or any part of the relevant income is not exempt under section 11 or section 12, by virtue of the provisions of section 13(1)(c) or section 13(1)(d), tax shall be charged on the relevant income or part of relevant income, at the maximum marginal rate. 65. In view of the aforesaid proviso to section 164(2), Hon'ble Courts in the judgments referred by Ld. CIT(A) in the impugned order have held that in case of violation of the conditions under section 13(1)(c) or 13(1)(d) of the Act, only the relevant income or part of such relevant income is liable to be taxed at maximum marginal rate. It is also held that the violation of section 13(1)(c) or 13(1)(d) does not result in denial of exemption under section 11, in respect of the total income of the assessee. In other words, only the non-exempt income, in view of the provisions of section 13(....
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....year under appeal as application of income for the capital expenditure incurred during the year. However, Ld. Assessing Officer while concluding the assessment and determining the total income has not deducted the said amount. Ld. CIT(A) after appreciating this fact that the Ld. Assessing Officer has not discussed anything in the assessment order about the capital expenditure claimed as an application of income by the assessee directed the Ld. Assessing Officer to allow the said claim. The revenue has challenged this finding. 70. Ld. DR could not bring any contrary material on record to oppose the finding of Ld.CIT(A) and thus relied on the assessment order whereas Ld. Sr. counsel for the assessee relied on the finding of ld. CIT(A). 71. We note that the assessee society claimed deduction for capital expenditure as application of income during A.Y. 2008-09 to 2010-11 at Rs. 2,43,75,990/-, Rs. 11,06,15,735/- & Rs. 2,00,48,975/- against the total income earned by the assessee society. Ld. Assessing Officer made various additions and disallowances alleging that assessee violated the provision of section 13 but while determining the total income denied this claim but made no discussi....
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..... Thus, since the very basis for denying the benefit u/s 11 of the Act has been removed/deleted and there is nothing contrary on record brought by the revenue to show that the assessee is not carrying on the activities for charitable and educational activities as per the objects for which it is established, there remains no hurdle for the assessee society to claim benefit of exemption u/s 11 of the Act. Therefore in the given facts and circumstances of the case, in our considered view assessee has rightly claimed capital expenditure as application of income during the year and therefore the finding of ld. CIT(A) needs no interference. This common issue raised by the revenue in Ground nos.4,3 & 5 for A.Y. 2008-09 to 2010-11 are dismissed. 74. In the result, in the case of RKDF appeals of the assessee for A.Y. 2004-05, 2006-07 to 2009-10 are allowed and appeals of the revenue for A.Y.2008-09 to 2010-11 are dismissed. Now we take up the appeals in the case of assessee namely Ayushmati Education & Social Society (in short AESS) wherein assessee is in appeal for A.Ys. 2008-09 to 2010-11 and cross appeals by Revenue are for A.Y. 2009-10 & 2010-11. 75. Brief facts relating to this case....
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....- by giving it to the benefit of persons referred u/s 13(3) of the Act which in this case was a company namely M/s. Siddharth Kapoor Infrastructure Pvt. Ltd. (in short 'SKIPL') which was run by founder member of the society, Shri R.N. Kapoor and his grandson Shri Sidharth Kapoor. Ld. AO alleged that SKIPL purchased 10.17 hectare land located at Gondarmau, vide registry dated 20.03.2009 from various farmers. Ld. AO initiated enquiry into this transaction based on documents seized during the course of search action bearing numbers the LPS No.8B (Panchnama dated 24.07.2009) which is a photocopy of a registered sale deed of a land purchase by the SKIPL. Ld. AO after discussing various information found from the seized material, finally discussed in the assessment order that sum of Rs. 1,99,21,499/- was paid by AESS to 10 farmers through account payee cheque during the month of March 2009. The assessee society submitted that the land purchased by 'SKIPL' was leased to the assessee society for 'NIL' rent and against the consideration of advance paid to farmers and NIL rent assessee was required to develop the land for sports activities and various other related facilities. The said l....
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....nt year. 81. Further Ld. AO also observed that for A.Y. 2009-10 though the assessee has been granted the approval for exemption u/s 10(23C)(vi) of the Act, assessee is not eligible to claim the same as it exists for the purpose of profit and fund of the society were grossly mis-utilized for the family concerns of office bearers and thus held that the society cannot be held as running solely for education purposes for A.Y.2009-10 and subsequent year. Observing so Ld. AO denied the benefit of exemption u/s 10(23C)(vi) of the Act along with denying the exemption u/s 11 of the Act. 82. Income of the assessee for A.Y.2004-05 to 2007-08 was assessed at nil income and for A.Y. 2008-09 to 2010-11 was computed in the following manner: A.Y. 2008-09 (Computation of application of income Gross Receipts Add. Unexplained expenses debited to Anees Khan on account of payment of Tulisram Patidar and Shyam Lal Patidar as discussed in para 10.3 Add. On account depreciation on bogus asset as discussed in para 10.5 Rs. 24,82,75,281/- 15,00,000/- 7,71,416/- Gross receipts 25,05,46,697/- Less. Total Expenditure 28,40,33,255/- Total Income assessed NIL b....
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....e note that with regard to bogus assets there is no reference to any incriminating material found during the course of search. The alleged bogus claim of assets is during A.Y. 2004-05 to 2007-08. Returns for all these three years were duly filed u/s 139(1) of the Act. Time limit for issuance of notice u/s 143(2) of the Act has either expired before the date of search or the years were assessed u/s 143(3) of the Act. In view of the ratio laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla(supra) which have been subsequently followed in various other decision of this tribunal that for non-abated assessment addition cannot be made by Ld. AO in absence of any incriminating material found during the course of search. 90. We are of the considered view that since Ld. AO had made the disallowance of depreciation only on the basis of bogus claim of assets purchased during A.Y. 2004-05 to 2007-08 but without giving reference to any incriminating material found during search nor giving any other details in the assessment order and therefore making disallowance on the basis of such bogus claim for A.Y. 2004- 05 to 2007-08, has no foundation to stand for. Moreover assess....
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....ose only. Regarding the allegation that lease deed is unregistered and therefore, not admissible evidence reference was made to section 2(47) of the Act and submitted that the expression 'transfer' defined u/s 2(47) of the Act includes "any transaction entered into it any manner which has the effect of transferring, or enabling the enjoyment of, any immovable property". Reliance was placed on the judgment of Hon'ble Punjab and Haryana High Court in the case of Ram Kishan vs. Bijeder Mann. (2013) 1 PLR 195. It was also submitted that if in case SKIPL refused to honour the lease agreement, the appellant has a right to get his agreement enforced by way of suit for specific performance. 94. In case of G.Balakishtiah vs. B. Ranga Reddy AIR 1960 AP 112, it was held that unregistered lease deed can be admissible as evidence for proving appellant's (who was owner of the land in dispute) title to the leased property. 95. Reliance was also placed on the judgment of Hon'ble Supreme Court in the case of Shibani Basu v. Sandip Ray AIR 2011 SC 509 (SC) wherein Hon'ble Court has held that non-registration of a rent note did not debar use of a document that was to be compulsorily re....
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.... Vice - Chairman & grand son of Shri R.N. Kapoor held equal share. Therefore, the addition of Rs. 1,99,21,499/- made by the AO in A.Y. 2009-10 on this count is confirmed as this is violation of provisions of Section. 13(1)(c) read with Section. 13(3) of the Act. Consequently, this ground of appeal is dismissed. Finding denying the benefit of section 10(23C(vi) of the Act 12. These grounds are raised by the appellant for claiming exemption in respect of entire income u/s 10(23C)(vi) of the Act. Appellant claimed exemption u/s 11 in ITRs filed for A.Y. 2004- 05 to A.Y. 2010-11. The AO has also passed assessment order- uys 153A r.w.s. 143(3) keeping in mind the exemption u/ s 11 available to the assessee for all assessment years 2004-05 to 2010-11. Approval u/s 1 0(23C) (vi) has been accorded to the appellant on 24.03.2009 for AY 2009-10 onwards. Since, search operation was conducted on 23.07.2009 and consequently mandatory assessment was conducted for AY 2004-05 to 2010-11. The major part of the assessment period is prior to date of approval u/s 10(23C)(vi) and AO has also relied upon exemption u/s 11 as claimed by the appellant in returns of income/computation of income fi....
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....3,41,058/- is shown which also comprises of the name of persons and the amount of Rs. 1,99,21,499/- given to some persons during F.Y. 2008-09. We also note that a lease agreement was entered between the assessee and SKIPL on 28.02.2009 and assessee society agreed that in lieu of advance given to farmers at Rs. 1,99,21,499/- and developing the said land for sports related activities under CSR, making construction, landscaping land leveling and other land development work, 'NIL' rent will be paid for 20 years commencing from 20th April 2009. 101. Though it is alleged by the revenue authorities that the lease deed is unregistered and not admissible as evidence, we however, observe that definition of expression "transfer" provided in section 2(47) is more wider than in the general law. The expression "transfer" employed in section 2(47) includes "any transaction entered into in any manner which has the effect of transferring, or enabling the enjoyment of, any immovable property". In these two eventualities, profits on account of capital gains would be taxable in the year in which such transactions are entered into, even if a transfer of immovable property is not effective or completed....
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....egistration Act, 1908, but the failure to register such a contract would only deprive the person in possession of any benefit conferred by section 53A of the 1882 Act. The proviso to section 49 of the Indian Registration Act clearly postulates that non-registration of such a contract would not prohibit the filing of a suit for specific performance based upon such an agreement or the leading of such an unregistered agreement into evidence. 12. A suit for specific performance based upon an unregistered agreement to sell accompanied by delivery of possession or executed in favour of a person who is already in possession, cannot, therefore, be said to be barred by section 17(1A) of the Registration Act, 1908. 13. Section 17(1A) merely declares that such an unregistered contract shall not be pressed into service for the purpose of section 53A of the Transfer of Property Act, 1882. Section 17(1A) of the Registration Act, 1908, does not, whether in specific terms or by necessary intent, prohibit the filing of a suit for specific performance based upon an unregistered agreement to sell, that records delivery of possession or is executed in favour of a person to whom possession is deliv....
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....ary for the overall development of the students, service for healthy mind good health is necessary. It is not in dispute that the said land is being used for such sports related activities. The alleged sum is duly recorded in the books of account. Even during the course of search the books made on computer were also impounded and the alleged amount was duly reflected in these books. 106. We also note that there is a violation of principles of nature justice as the assesse was denied the opportunity of cross examining those persons whose statements were used against the assessee. Ld. CIT(A) has himself mentioned in the impugned order at page 19 that " because of time barring issue, I am of the opinion that AO was not in position to afford opportunity of cross examination proceedings to appellant before limitation. Ld. CIT(A) also held that "only fact that appellant did not have cross examination opportunity does not affect other facts/circumstances of the case". This shows that the assessee's request on 12.05.2014 demanding cross examination of the said farmers was denied by the Ld. AO and this action in itself leave no room for the Ld. AO to make addition in the hands of assessee.....
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....appellant trust which is liable to tax. However the LD AO without appreciating the submission of Appellant and without adjudicating this issue denied the benefits of the aforesaid exemption on the ground that Appellant is not eligible for benefits of Section 11 or Section 10 (23c) (vi) at the same time and simultaneously benefits cannot be granted under both section 11 and u/s 10 (23c) and further the object of society can't be held as solely for education purpose for the A.Y 2009-10 & 2011-12. The extract of relevant finding of LD Assessing office in Assessment order is re-produced as under :----- B) the CCIT, Bhopal accorded approval for exemption u/s 10 (23C) (vi) for A.Y 2009-10 and for subsequent years. However as per discussion made in this assessment order revels that Applicant society exists for the purposes of profit & fund of the society was grossly misutilized for family concerns of the office bearer. Therefore, the object of society can't be held as solely for education purpose for the A.Y 2009-10 and for subsequent year. 112. When the matter came up before LD CIT (A) he also confirmed the action of Ld. AO stating that "In view of the aforesaid points mentioned in th....
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....h association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless- (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, by such research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place; and (ii) the approval granted to such research association or other association or fund or trust or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded : Provided further xxxxxxxxxxxxxxxxxxxxxxxxx 114. ....
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....vi) or any hospital or medical institution referred to in sub-clause (vii) of clause (23C) of Section10, which is required to furnish the return of income under sub-section 4(C) of section 139, no order making an assessment of the total income or loss of such scientific research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or any other medical institution, shall be made by the Assessing Officer, without giving effect to the provisions of Section10 unless - (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause (via) or clause (23C) of section10 as the case may be, by such scientific research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place, and (ii) the approval granted to such scientific research association or other associa....
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....1 of the Act was allowed to the respondent-assessee." 119. Further Section 10(23C) does not prescribe any stipulation which makes registration u/s 12AA a mandatory condition. The provisions of section 11 and 10(23C) are two parallel regimes and operate independently in their respective realms. Thus For claiming exemption under section 11, it is not necessary that the conditions u/s 10(23)(vi) must be fulfilled. Our view is supported by following: a) In Commissioner Of Income tax Vs. Mahasabha Gurukul Vidyapeeth Haryana (2010) 326 ITR 25 (Pun), it was held that Exemption under s. 11 was allowable to the assessee society running an educational institution which was registered under s. 12A, once it is held that all requisite conditions for exemption under s. 11 have been met, even if conditions under s. 10(23C)(vi) have not been complied with, there will be no bar to seek exemption under s. 11. a) Conversely, while claiming the exemption u/s 10(23)(vi), it is not required to fulfill the conditions mentioned u/s 11 as also exemption u/s 10(23)(vi). Exemption u/s 10(23)(vi) can be claimed by the assessee without applying for registration us 12A. See Commissioner Of Income tax and A....
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....ation has become inoperative under the first proviso, may apply to get its registration operative 65[under section 12AA] 66[or section 12AB] subject to the condition that on doing so, the approval under clause (23C) of section 10 or notification under clause (46) of the said section, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it shall not be entitled to exemption under the respective clauses.] 122. In light of above amendment that only from finance Act, 2020 simultaneous Registration For Exemption under Section 11 etc and Approval For Section 10(23C) Exemption is Not Permissible and prior to this the Assessee can claim exemption under both section as there was no bar from claiming exemption under both provision and further there was no condition prior to amendment introduced by finance Act 2020 to claim exemption under either of the two. 123. Thus In light of above we hold that learned CIT (Appeals) failed to appreciate that the income of Appellant society for the year under consideration was exempt u/s 10 (23C) (vi) of the Income tax Act, 1961 and the appellant had....
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....5,83,030/- & Rs. 9,39,890/- for A.Y. 2009-10 & 2010-11 respectively. 127. Ld. DR relied on the submissions made before Ld.AO and Ld. Sr. counsel for the assessee relied on the finding of Ld. CIT(A) and also submitted that the interest was duly charged and recorded in the books of account on the amount advanced to Homebound Travel Pvt. Ltd. 128. We have heard rival contentions and perused the records placed before us and carefully gone through the submission. Deletion of notional interest by Ld. CIT(A) calculated by the Ld. AO on the amount advance to HTPL is in challenge before us. On perusal of the ledger account of 'HTPL' in the books of assessee society we observe that interest has been charged at Rs. 26,90,656/- and Rs. 9,50,000/- for A.Y. 2009-10 & 2010-11 respectively on the amount advanced to HTPL. This fact remains un-rebutted by the Ld. DR. Therefore, in our considered view Ld. AO failed to appreciate the facts of the case properly and therefore no interference is called for in the following finding of Ld. CIT(A) deleting the impugned addition: 16. These grounds have been raised by the appellant against the additions of Rs. 25,83,030/- in A.Y. 2009-10 and Rs. 9,39,890/....
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....The figures of indirect incomes in the ledgers produced by the appellant society are matched with the figures of income shown in the P&L account in audit reports of appellant for the relevant years. Appellant has also produced copies of ledgers of HTPL in its books of account; the relevant figures of charging of interest may also be cross verified with these documents. 16.2 On perusal of all the copies of ledgers produced by appellant and the audit reports of appellant & HTPL, it is clear that the term loan provided by appellant to HTPL in F.Y. 2008-09 & 2009-10 was not interest free and -appellant has charged interest on these term loan given to HTPL. The AO charged notional interest @ 12% and added Rs. 25,83,030/- in A.Y. 2009- 10 and Rs. 9,39,890/- in A.Y. 2010-11 respectively whereas the appellant has charged interest of Rs. 26,90,656/L in F.Y. 2008- 09 & Rs. 9,50,000/- F.Y. 2009-10 respectively; Therefore, the additions of Rs. 25,83,030/- in A.Y. 2009-10 and Rs. 9,39,890/- in A.Y. 2010-11 are hereby deleted. Consequently , these grounds of appeal are allowed. 129. In the result this common issue raised by revenue in ground no.4 in appeal for A.Y. 2009-10 & 2010-11 stands di....
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....thus hit by section 13 of the Act. After dealing with these issues in the preceding paras the impugned addition have already been deleted and one of the remaining addition of Rs. 15,00,000/- made for A.Y. 2008-09 for the payment made to Mr. Anees Khan, though Ld. CIT(A) has deleted the addition for the year in which the addition was made but had confirmed the same for A.Y. 2007-08. We, however, note that similar type of payment to Shri Anees Khan was also made in the case of RKDF Education Society wherein we have given a finding that Shri Anees Khan is a contractor and does construction work on behalf of society. Regular transaction have taken place round the year and invoices were regularly raised for which payments are made through banking channel and tax deducted at source. Though this issue addition of Rs. 15,00,000/- is not before us by the assessee since it was directed by Ld. CIT(A) to be taxed in A.Y. 2007-08. However since no incriminating material was found with regard to this addition and the assessment for A.Y. 2007- 08 is a non-abated assessment, thus no addition was called for by the Ld. AO towards the payment of Rs. 15, lacs to Anees Khan in view of the judgment of ....
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....ed the addition/disallowance made by the Ld. AO, this issue raised by the revenue becomes infructuous and therefore, following the finding of Ld. CIT(A) needs to be confirmed. 17. These grounds are raised against not allowing the deduction of Rs. 8,27,57,688/- in A.Y. 2009-10 and Rs. 7,83,19,820/- in A.Y. 2010-11 as application of income u/s 11(I)(a) of the Act (15% of the gross receipts in the relevant financial year). 17.1 Appellant in the return of income/ computation of income claimed the deduction of similar amounts as application of income @ 15% of gross receipts u/s 11(I)(a) of the Act. In the assessment order, the A. o. has stated: nothing about this deduction. On perusal of the tables prepared in the assessment order while concluding the assessment order for determination of the total income, the A.O. has not deducted the said amounts. For A.Y. 2009-10 & A.Y. 2010-11, the AO denied the exemption u/s11 of the Act to the appellant and therefore, added the excess of income over expenditure (gross receipts less revenue expenses) i.e. Rs. 34,07,25,659/- (Rs. 55,17,17,918/- less Rs. 21,09,92,259/-) in A.Y. 2009-10 and Rs. 20,35,53,275/- (Rs. 52,21,32,132/- less Rs. 31,85,7....