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TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 894
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....Commissioner of Income-tax, Circle 1(4), Mumbai in case of Podar Education Trust, Bangalore against the order of Commissioner of Income-tax (Appeals) [in short the learned CIT (A)]. All these appeals are having common facts, identical orders, and similar appellate orders. Both the parties argued them together and therefore, the same are disposed of by this common order. 03. We first take up the appeal of the ld AO in case of Podar Education and Sports Trust for AY 2012-13 , and apply our decision for other years as facts and circumstances are similar except the done trust and amount of donation. 04. The learned Assessing Officer has filed appeal against the order passed by the CIT (A)-47, Mumbai dated 11th August, 2021 for A.Y. 2012-13 in ITA No. 1876/Mum/2021, wherein the appeal filed by the assessee against the assessment order dated 29th December, 2019 passed under Section 143(3) read with section 153A of the Income-tax Act, 1961 (the Act) passed by the learned Dy. Commissioner of Income-tax, Central Circle-1(4), Mumbai (the learned Assessing Officer) was partly allowed. 05. Ld AO has raised following grounds of appeal:- 06. Brief fact of the case shows that assessee....
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....rubhai Thakkar being person associated with Dhara Angadia Services, Ahmadabad, were also recorded under Section 131 of the Act. Similar statement of Mr. Sureshbhai Thakkar was also recorded. On 11 January 2018, statement of one Mr. Shirish Shah, alleged entry operator was recorded under Section 131 of the Act, wherein information with respect to various share capital introduced in the companies was also found. Based on this, statement of Jayesh Zanani, who is manager in Podar group was also recorded, who confirmed the same. 011. Based on this, the assessee's trust was asked the details with respect to donation made as per letter dated 26 September 2019. Assessee furnished such detail. Subsequently, notice under Section 133(6) of the Act were issued to the various trust to whom donations were made by the assessee for verification of genuineness. A show cause notice dated 12th December, 2019, was issued to the assessee to show why the donation given by the assessee trust should not be treated as bogus as same was not given for the object of the trust for the relevant assessment years during the A.Ys. 2012-13 to 2018-19, assessee replied on 23 December 2019. Meanwhile, the reply to....
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....t applied for education purposes. 016. Accordingly, he found that assessee has total income of Rs.31,19,82,582/- out of which Rs.29,38,72,711/- are utilized for the purpose of object of the trust. The utilization included the provision for gratuity of Rs.1,76,72,365/-. Accordingly, ld AO computed application of income for educational purposes of Rs. Rs.27,62,00,346/- [ Rs 29,38,72,711- Rs 1,76,72,365] which resulted into excess of income over expenditure of Rs.3,57,82,234/-. On this sum, the learned Assessing Officer allowed the exemption under Section 10(23C) (via) of the Act and computed the total income at Rs.nil. 017. Ld AO held that a sum of Rs.1 crore donated to Ramrao Adik Education Society is bogus and denied exemption as allegedly not applied for educational purposes. 018. Accordingly, the assessment order under Section 153A read with section 143 of the Act, was passed on 29th December, 2019, at total taxable income at Rs. 1 crore and also denying deduction as application of income of provision for gratuity of Rs 1,76,73,365/-. 019. Assessee aggrieved with the assessment order preferred the appeal before the learned CIT (A). Assessee challenged the assessment o....
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....f search, evidences in form of statement of various persons show the complete modus operandi adopted by the Group. The statements are of the persons who were involved in the day-to-day affairs of the assessee company. There are certain text messages also available, which are produced at page no. 15 of the assessment order. This all shows that assessee is a party from which donations are given to other trust and cash is received back by the Podar Group, which is converted into the share capital in the group companies. Merely because, these statements are retracted by those persons, the learned CIT (A) should not have been deleted the addition. It was further stated that when the donation is given to a particular trust, all the evidences of the donation remains only a paper formality, which does not have any credibility. Therefore, the addition deleted by the learned CIT (A) is on irrelevant consideration. Therefore, he submitted that ground no. 1 to 5 of the appeal of the learned Assessing Officer deserves to be allowed. On Ground no. 6, he relied on the order of the learned Assessing Officer. 023. The learned Authorized Representative referred to the Paper Book containing to 252....
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....n education activities, at page no. 15 to 17 of the Paper Book. It is submitted that independent enquiry under Section 133(6) of the Act, made by the Assessing Officer was replied by the Donee party. After that there is no enquiry made by the learned Assessing Officer with respect to the Donee trust that whether any cash is returned back to any of these persons stated by the learned Assessing Officer. Therefore, there is no evidence against the assessee that assessee has contravened any of the provisions of Section 10(23C) of the Act. x. The learned Authorized Representative vehemently referred to the order of the learned CIT (A) in case of Anandilal and Ganesh Podar society for A.Y. 2011-12. It is submitted that all these reasoning given by the learned CIT (A) in that particular case squarely applies in case of the assessee. xi. It is for the learned Assessing Officer to show that donations given by it have come back to the assessee. There is no such evidence available with the learned Assessing Officer or collected in any independent inquiry. xii. financial statement of the assessee's trust shows that it has given a donation of Rs.1,25,00,000/- towards ....
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.... crores for the educational activities resulting into net surplus of Rs.5.13 crores. Similarly, for the earlier year, fees income was Rs.20.85 crores resulting into the net surplus of Rs.4.70 crores. It is undisputed fact that assessee is carrying on educational activities which are entitled to exemption under Section 10(23C) of the Act. 027. On 9 January 2018, there was a search on Podar Group and statements of several persons were recorded under Section 131 of the Act. In substance, all of them stated that funds have been diverted from the trust by further donation to other trust. Other trust in turn return cash to the Podar Group and then, such cash are converted into share capital or loan etc. in the group companies. Therefore, based on this, the learned Assessing Officer took a view that assessee has donated a sum of Rs.1 crores to Ramrao Adik Education Society by cheque no. 188152 dated 28th June, 2011 of IDBI bank is a bogus donation. Therefore, on this sum, the learned Assessing Officer denied the exemption under Section 10(23C) of the Act. Specific show cause notice was issued which was replied by the assessee. In reply, the assessee categorically submitted that the rel....
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....fficer for A.Y. 2011-12 wherein, donation of Rs.50 lacs was an issue, deleted by the learned CIT (A). May be that order of the learned CIT (A) have not been challenged by the Revenue before higher forum because of low tax effect. However, that fact does not go either against the assessee or in favour of the assessee. However, the arguments and findings of the learned CIT (A) have been relied upon by the learned CIT (A) in this year to delete the addition. To state the fact that for A.Y. 2011-12, has also given donation of Rs.50 lacs to Ramrao Adik Education Society. The finding of the learned CIT (A) in A.Y. 2011-12 has been extensively reproduced by the learned CIT (A) in this year. In A.Y. 2011-12, the learned CIT (A) relied on the plethora of judicial precedents along with the facts to delete the addition. In A.Y. 2011-12, the learned CIT (A) in assessee's own case followed the decision of learned CIT (A) in case of another trust Anandilal and Ganesh Podar society for A.Y. 2011-12 vide Para 12 of his order. The fact clearly shows that only evidence available with the learned Assessing Officer are statements of several persons recorded under Section 131 of the Act which were subs....
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....re, the learned Assessing Officer reached the conclusion that statement of Mr. Jayesh Zanani has admitted that unaccounted money was generated in podar Group and same was rooted through sham companies. 030. The notice under Section 133(6) of the Act was issued to the done trust i.e. Ramrao Adik Education Trust. Ultimately, reply was received from trust along with the evidence. 031. Further, it was contended before the learned Assessing Officer that all these persons Mr. Kiritkumar suba, Mr. Navin Nishar, Mr. N.K. Sodhani all are outside chartered accountants and them explaining the modus operandi of Podar group. Further, Mr. Jayesh Zanani, who was manager accounts in some group company, stated that he has come to know this modus operandi from Mr. Kiritkumar suba. It is to be noted that Mr. Kiritkumar suba retracted his statement on 3 April 2018. Mr. Navin Nishar retracted his statement on 4 June 2018 and Mr. Sodhani retracted his statement on 30 August 2018, Mr. Jayesh Zanani also retracted his statement on 2 April 2018. It is to be noted that at the time of issuance of notice under Section 153A of the Act i.e. of 16 August 2018 all those persons who originally gave statement....
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...., there is no evidence available with the Assessing Officer that Ramrao Adik Education Society has in turn returned cash back to the Podar group. 038. The learned Assessing Officer neither examined the trustees of Donee trust nor the Donor assessee trust to ask for the purpose of such donation. It would have been only the trustees of Ramrao Adik Education Society to explain whether they have returned the donation amount in cash. There is no such effort made by the learned Assessing Officer. 039. Further, there is no enquiry in the activity of Ramrao Adik Education Society that in fact whether they are engaged in such activities or not. There is no evidence that Ramrao Adik Education Society is not carrying on educational activities but accepting the donation and returning the cash to the Donors. 040. The learned Departmental Representative did not show us any evidence that society which is allegedly returning the cash back to the assessee has at all been examined with respect to such activities. 041. Further, the statement of Angadia relied upon by the learned Assessing Officer also did not show any money collected from above done trust and given to assessee. In view of....
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....t provision of Rs.1,76,72,365/- on account of gratuity and leave encashment is not application of income of the trust for the purpose of education. The learned CIT (A) deleted the same following the decision of co-ordinate Bench in assessee's own case for A.Y. 2014-15 dated 3 August 2021. Even otherwise, we find that assessee runs educational institute and makes provision for gratuity and leave encashment of the staff on actuarial basis, which is ascertained liability, and not merely a provision. Merely because it is stated to be a provision, it is not disallowable. Even otherwise, the issue is squarely covered in favour of the assessee by the decision of co-ordinate Bench in assessee's own case for A.Y. 2014-15. In the result, ground no. 6 of the appeal of the learned Assessing Officer is dismissed. 045. In the result, the appeal of the learned Assessing Officer for AY 2012-13 is dismissed. 046. For following Assessment years donations are given to following entities :- Ay 2014-15 Sr No Name of The Trust PAN Donation [ In Rs] 1 Dr D Y patil International Academy AATD9542N 50,00,000 2 Shantidevi Charitable Trust AAGTS2305G 3,50,00,000/- ....
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....ppeal being ground number 6 in all these appeals for assessment year 2014 - 15 to 2017 - 18 and solitary ground of appeal in ITA number 1869/M/2021 for assessment year 2018 - 19 with respect to the denial of deduction on the provision of gratuity and leave encashment for all these assessment years from assessment year 2014 - 15 to 2018-19 . These grounds are identical to ground number 6 of the appeal for assessment year 2012 - 13. While deciding identical ground in assessment year 2012 - 13 wherein we followed the decision of the coordinate bench and allowed the deduction of leave encashment and gratuity, therefore, for identical reasons we also dismiss ground number 6 of the appeal of the learned AO for assessment year 2014 - 15 to 2018-19. 051. In view of above all the 6 appeals filed by the learned assessing officer in case of Podar Education Trust for assessment year 2012 - 13, 2014 - 15 to 2018-19 are dismissed. PODAR EDUCATION AND SPORTS TRUST 052. These are 5 appeals with respect to the above trust filed by the Deputy Commissioner of income tax, central circle - 1 (4), Mumbai (the learned assessing officer/AO) for assessment year 2014 - 15 to 2018 - 19. 053. Firs....
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....enhanced provision of employees for posterity benefits in such a deduction and all utilization/set apart is allowable only on actual basis as per Section 11 and 12 of the income tax act 1961 054. both the parties submitted that grounds of appeal in case of all other 4 appeals are identically worded, the order of the learned assessing officer are also on identical basis and the order of the learned CIT - A is also identically worded, except the amount of donation as well as the amount of gratuity and leave encashment provisions. 055. It was submitted that ground number 1 - 5 of the appeal for all these years are related to the donation made by assessee to various trust, and ground number 6 is with respect to the provision of the gratuity and leave encashment. 056. It was further stated that all these grounds of appeal in case of this assessee trust are also identical to grounds in case of Podar Education Trust . 057. Both the parties also stated that their arguments are also the same as were advanced in case of Podar Education Trust. 058. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that in all these appeal....