IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : "C" NEW DELHI
BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER
AND SHRI A.T. VARKEY , JUDICIAL MEMBER
ITA No. 3602/Del/2013
Asstt. Year 2006-07
JCIT vs. Highway Multiple Charitable Trust
Range-2, 16, Vivek Vihar
CGO-2, Hapur Road, Hapur
Ghaziabad (PAN AADFH3226N)
(Appellant) (Respondent)
Appellant by :Shri V.S. Rastogi, AR
Respondent :Shri Satpal Singh, Sr. DR
ORDER
PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER
This is an appeal filed by the revenue directed against the order of
Commissioner of Income Tax Ghaziabad dated 13.3.2013.
2. Facts in brief : This is the case of a Trust which was running a school in the
name of `City Academy' at Babugarh Cant. The return of income for Asstt. year
2006-07 was filed on 31.10.2006 declaring "nil" income. As per the statement of
taxable income enclosed with the return, the assessee declared net assessable loss
of Rs. 1,06,062/-. Copies of audited accounts were enclosed with the return. These
show receipt of donation of Rs. 9,55,000/- and unsecured loans of Rs. 29,78,500/-.
In the Income and Expenditure Account of `City Academy' , total receipts have been
shown at Rs. 14,63,650/- from school fees and rent. There are three balance sheets
enclosed. One is of the school "City Academy" . Here a loan of Rs. 11,48,500/- was
shown. The other balance sheet is of `Highway Multiple Charitable Trust' . Here
ITA. No.3602/Del/2013
AY 2006-07
JCIT vs. M/s Highway Multiple Charitable Trust
receipt of donations of Rs. 9,55,000/- and unsecured loans of Rs. 18,30,000/- was
shown. The third balance sheet is consolidation of both the above referred balance
sheets. As per information in the assessment record, for A.Y. 2005-06, for which
assessment was made u/s 143(3) on 27.12.2007, assessee has already declared
receipt of unsecured loans of Rs. 23,30,000/- before the period ended 31.3.2005.
Therefore in F.Y. 2005-06 relevant to A.Y. 2006-07 new loans are to the tune of Rs.
6,48,500/- only.
3. The assessment was made on income computed as under :-
(i) Unproved unsecured loans Rs. 6,48,500/-
(ii) Unproved donations Rs. 9,55,000/-
(iii) Receipts over expenditure of school Rs. 98,782/-
________________
Rs. 17,02,282/-
_________________
4. Aggrieved the assessee carried the matter in appeal. The first appellate
authority granted the relief.
5. Aggrieved by this order the revenue is in appeal by the following grounds :-
1. That the Ld. CIT(A) has erred in law and on facts and circumstances of the
case, in deleting the addition of Rs. 6,48,500/- made on account of
unapproved unsecured loans as creditworthiness of lenders could not be
established.
2. That the Ld. CIT(A) has erred in law and on facts and circumstances of the
case, in deleting the additions of Rs. 9,55,000/- made on account of
unproved donation.
3. That the Ld. CIT(A) has erred in law and on facts and circumstances of the
case, in deleting the addition of Rs. 98,782/- made on account of receipts
over expenditure of school.
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ITA. No.3602/Del/2013
AY 2006-07
JCIT vs. M/s Highway Multiple Charitable Trust
4. That the Ld. CIT(A) has erred in law and on facts and circumstances of the
case, in accepting the additional evidences when the conditions of Rule
46A(1) of the I.T. Rules, 1962 are not satisfied whereas the assessee has
been provided sufficient opportunity by the AO to adduce the evidence.
5. That the Ld. CIT(A) has erred in law and on facts and circumstances of the
case, in not giving sufficient opportunity to the AO u/s 250(4) of the Act to
conduct further inquiries / verification on the additional evidences submitted
by the assessee.
6. That the Ld. CIT(A) has erred in law and on facts and circumstances of the
case, in not forwarding the comments of the assessee on the remand report
of the AO, for his comments, when the remand report of the AO has been
confronted to the assessee by the Ld. CIT(A) to provide the AO a
reasonable opportunity.
6. We have heard Shri Satpat Singh, Sr. DR on behalf of the revenue and Shri
Neeraj Jain. Ld. Counsel for the assessee.
7. On a careful consideration of the facts and circumstances of the case and a
perusal of the papers on record and the orders of the authorities below we hold as
follows :-
7.1. Ld. First appellate authority admitted additional evidence on an application
made by the assessee under rule 46A. The remand report was called for. The first
appellate authority at para 8.1 held as follows :-
"8.1 The appellant is a charitable Society and is running school in the village
for the poor students and the receipts from the school have been declared in
the Income and Expenditure account of the school run under the name of
City Academy at village Babugarh, Tehsil Hapur. There is excess of
expenditure over the receipts declared at Rs. 14,63,650/- resulting in to loss
of Rs. 35,287/- in the school set of account. This fact has been admitted by
the AO in the order and there is no dispute on this point. The appellant has
enclosed with the return, separate Income and Expenditure account of society
where an amount of Rs. 68,699/- as bank interest and Rs. 2,075/- as bank
charges have been debited making the total loss at Rs. 1,06,061/50 for the
financial year ending 31.3.2006."
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ITA. No.3602/Del/2013
AY 2006-07
JCIT vs. M/s Highway Multiple Charitable Trust
8. On the additions of Rs.6,48,500/- u/s 68 the Ld. First Appellate authority
observed that these very parties advanced loans to the assessee for the earlier asstt.
years and no addition was made in that year, though a scrutiny assessment order
was passed. These parties were Smt. Harjeet Kaur, Shri Gurjeet Singh and Shri
Surjeet Singh. After considering remand report of the AO and the documentary
evidence given by the assessee, the first appellate authority came to the conclusion
that on examination of all the documents and details furnished, no addition is called
for. He deleted the addition. Ld. DR could not controvert these factual findings of the
first appellate authority. Similarly on an addition of Rs.9,55,000/- being donations,
on examination of evidence, the first appellate authority came to the conclusion that
the addition cannot be sustained for the reason that the assessee had produced all
documentary evidences in support of its claim, whereas the AO has not conducted
any investigation or collected any evidence to controvert the evidence furnished by
the assessee. He held that the reasons given by the AO are casual in nature. We see
no reason to interfere with this ground.
9. Vide Ground No. 3 the appellant has objected to an addition of Rs. 1,34,070/-
to the income of the Trust in respect of expensed debited to the receipt and
expenditure statement of the school by the name of "City Academy" thereby treating
the same as not allowable expenditure.
10. The assessing Officer has not given any comment on this ground of submission
made by the appellant in the remand proceedings. In view of the detailed
submission made by the appellant, the addition of Rs. 98,782/- made to the income
has deleted by the Ld. CIT(A).
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ITA. No.3602/Del/2013
AY 2006-07
JCIT vs. M/s Highway Multiple Charitable Trust
11. We find no infirmity in the same. In the result we uphold the order of the first
appellate authority and dismiss the appeal of the revenue.
Order pronounced in the Open Court on 5th January, 2015.
sd/- sd/-
(A.T. VARKEY) (J.SUDHAKAR REDDY)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 5th January, 2015
`veena'
Copy of the Order forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
6. Guard File
By Order
Deputy Registrar
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