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2019 (1) TMI 1652 - AT - Income TaxExemption u/s 11 - registration u/s 12AA cancelled - HELD THAT - It is sufficient to take note of the fact that section 11 was held to be inapplicable as registration under section 12AA was cancelled. There was no other reason for denial of benefit under section 11. Learned representatives, therefore, fairly agree that since the registration has been restored, vide order dated 31st March 2012 passed by a coordinate bench of this Tribunal, the applicability of Section 11 will follow. We, therefore, uphold the plea of the assessee, and direct the Assessing Officer to grant the consequential relief. Non granting deduction of capital expenditure as claimed in the statement of income attached to the return of income - HELD THAT - This claim was made by way of a note on the statement of income and the matter but the Assessing Officer did not deal with the same. In appeal, the assessee pointed out this fact to the CIT(A) in paragraph 7.1 of the written submissions (@ page 28 of paper book before us) and prayed for adjudication on merits, even though, as it appears to us, there was no specific ground of appeal on this issue. There was, however, no adjudication on this aspect. Learned counsel now urges us to admit the specific ground of appeal, as above, in terms of Hon ble Supreme Court s judgment in the case of National Thermal Power Corp Ltd Vs CIT 1996 (12) TMI 7 - SUPREME COURT and remit the matter to the file of the Assessing Officer for adjudication on merits - we admit this ground of appeal, and remit the matter to the file of the Assessing Officer for adjudication on merits. Donation to corpus from BCCI is not exempt, since the provisions of section 11(1)(d) were not complied by the appellant - Section 11(1)(d) which only require the income to be by way of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or the institution , we are of the considered view that any payments made by the BCCI, without a legal obligation and with a specific direction that it shall be for corpus fund- as admittedly the present receipt is, is required to be treated as corpus donation not includible in total income. We are unable to find any legal support for learned CIT(A) s stand that each donation must be accompanied by a separate written document. The contribution has to be voluntary and it has to be with specific direction that it will form corpus of the trust . These conditions are cl early satisfied. Any payment which the assessee is not under an obligation to make, whatever be the mode of its computation, is a voluntary payment, and, any payment which is with a specific direction that it for corpus fund is a corpus donation. In our considered view, even without the two specific confirmations filed by the assessee, in the light of the BCCI resolution under which the payment is made and in the light of the payment not being under any legal obligation, the conditions under section 11(1)(d) are satisfied. Direction may be given to compute the income as per provisions of section 11 of the Act, after giving deduction of 15%
Issues Involved:
1. Reopening of assessments. 2. Applicability of Section 11 of the Income Tax Act. 3. Deduction of capital expenditure. 4. Taxability of donations received from BCCI. 5. Deduction of 15% of income. 6. Addition of depreciation. 7. Set off of unabsorbed depreciation. Detailed Analysis: 1. Reopening of Assessments: - Assessment Year 2004-05, 2005-06, 2006-07, 2007-08: The issue of reopening the assessments was not pressed by the assessee. Consequently, it was dismissed for want of prosecution. 2. Applicability of Section 11 of the Income Tax Act: - Assessment Year 2004-05, 2005-06, 2006-07, 2007-08: The grievance was that the CIT(A) erred in holding that Section 11 was not applicable due to the cancellation of registration under Section 12AA. Since the registration was restored by a coordinate bench of the Tribunal, the applicability of Section 11 follows. The Tribunal directed the Assessing Officer to grant the consequential relief. 3. Deduction of Capital Expenditure: - Assessment Year 2004-05: The assessee claimed a deduction of capital expenditure of ?93,20,615, which was not adjudicated by the Assessing Officer or CIT(A). The Tribunal admitted the ground of appeal and remitted the matter to the Assessing Officer for adjudication on merits. - Assessment Year 2005-06: Similar claim of ?4,57,01,624 was not adjudicated. The Tribunal remitted the matter to the Assessing Officer for adjudication on merits. - Assessment Year 2006-07: The claim of ?1,97,51,723 was not adjudicated. The Tribunal remitted the matter to the Assessing Officer for adjudication on merits. - Assessment Year 2007-08: The claim of ?13,63,23,403 was not adjudicated. The Tribunal remitted the matter to the Assessing Officer for adjudication on merits. 4. Taxability of Donations Received from BCCI: - Assessment Year 2004-05: The assessee argued that ?1,58,00,000 received from BCCI was a corpus donation. The Tribunal found that the amounts were corpus donations based on specific confirmations and BCCI resolution. The Tribunal directed the Assessing Officer to delete the addition. - Assessment Year 2005-06: Similar issue with ?1,60,00,000. The Tribunal upheld the assessee's plea and directed the deletion of the addition. - Assessment Year 2006-07: Similar issue with ?3,45,00,000. The Tribunal upheld the assessee's plea and directed the deletion of the addition. - Assessment Year 2007-08: Similar issue with ?17,58,00,000. The Tribunal upheld the assessee's plea and directed the deletion of the addition. 5. Deduction of 15% of Income: - Assessment Year 2004-05: The Tribunal directed the Assessing Officer to compute the income as per provisions of Section 11 after giving a deduction of 15%. - Assessment Year 2005-06: Similar direction for ?28,00,683. - Assessment Year 2006-07: Similar direction for ?1,37,66,116. - Assessment Year 2007-08: Similar direction for ?3,01,64,525. 6. Addition of Depreciation: - Assessment Year 2004-05: The issue of depreciation was concluded by the Supreme Court judgment in CIT Vs Rajasthani & Gujarati Charitable Foundation, which allowed depreciation even if the cost of assets was treated as application of income. The Tribunal approved the CIT(A)'s conclusion and dismissed the grounds of the Assessing Officer. - Assessment Year 2005-06, 2006-07, 2007-08: The Tribunal followed the same reasoning and dismissed the grounds of the Assessing Officer. 7. Set off of Unabsorbed Depreciation: - Assessment Year 2004-05: The Tribunal upheld the CIT(A)'s decision allowing the set off of unabsorbed depreciation. - Assessment Year 2005-06, 2006-07, 2007-08: The Tribunal followed the same reasoning and dismissed the grounds of the Assessing Officer. Conclusion: - Assessment Year 2004-05: The appeal of the assessee is partly allowed; the appeal of the Assessing Officer is dismissed. - Assessment Year 2005-06: The appeal of the assessee is partly allowed; the appeal of the Assessing Officer is dismissed. - Assessment Year 2006-07: The appeal of the assessee is partly allowed; the appeal of the Assessing Officer is dismissed. - Assessment Year 2007-08: The appeal of the assessee is partly allowed; the appeal of the Assessing Officer is dismissed.
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