2013 (8) TMI 1148 - AT - Income Tax

Summary

Issues involved:
The issues involved in the judgment are:
1. Whether the deletion of addition of expenses by the Ld. CIT(A)-I, Nashik was justified.
2. Whether the donation made to another trust is in accordance with the trust deed.

Issue 1: Deletion of addition of expenses:
The revenue challenged the deletion of an addition of &8377; 72,00,000/- by the Ld. CIT(A)-I, Nashik, contending that the expenses were not made on the object of the trust as the donation violated the trust deed. The Assessing Officer disallowed the sum of &8377; 72,00,000/- in the assessment order, stating that the assessee trust had not made expenditure on its objects as per the Trust Deed dated 14-01-1972. The Assessing Officer concluded that the assessee trust had not complied with the provisions of Sec. 11(1)(a) of the Income-tax Act, 1961, and made the disallowance for giving the donation to another trust. The Ld. CIT(A) allowed the appeal filed by the assessee, citing relevant instructions and court decisions. The Tribunal confirmed the decision of the Ld. CIT(A), stating that the issue was covered in favor of the assessee by the Hon'ble Jurisdictional High Court and the CBDT instructions.

Issue 2: Donation in accordance with trust deed:
The second issue revolved around whether the donation made to another trust was in accordance with the trust deed. The Assessing Officer had examined the main objects of the assessee trust as per the Trust Deed and concluded that the trust's main objects were in the field of welfare, propagation, and preservation of the vedic culture. The Ld. CIT(A) considered relevant instructions and court decisions, allowing the appeal filed by the assessee. The Tribunal confirmed the decision, stating that the donations given to another charitable trust were considered an application of income within the meaning of Sec. 11 of the Act, as per court precedents and CBDT instructions.

In conclusion, the Tribunal dismissed the revenue's appeal, upholding the decision of the Ld. CIT(A) in favor of the assessee trust.