9911796707
TMI Blog2012 (9) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... s not been revoked - Decided against Revenue - ITA No.120/CTK/2012 - - - Dated:- 25-6-2012 - Shri K.K. Gupta, and Shri K.S.S. Prasad Rao, JJ. For the appellant: Shri P.S. Panda/Kamal AGarwalla, ARs For the respondent: Shri M.R. Panigrahi, DR ORDER Shri K.K.Gupta, AM : This appeal by the assessee is on the solitary issue that the Assessing Officer having denied the claim of the assessee for having utilized the surplus for the purpose of benefit of the assessee institution duly registered under the provisions of Section 12A has been misconstrued to be confirmed by the learned Commissioner of Income-tax (Appeals) when the Assessing Officer has categorically allowed the expenditure being the application of the income bringing to tax only the surplus as per the income and expenditure account. 2. At the outset the learned Counsel for the assessee submitted that the issue is squarely covered in favour of the assessee by the decision of this Tribunal for the earlier years when a similar assessment was made by the Assessing Officer was dealt with by the learned CIT(A) holding the assessee entitled for claim of Sections 11 and 13 in pursuance to the assessee being an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee s case for the earlier years that once the application of the income has been identified as exempt u/s.10(23C) or Section 12A, whether can be subjected scrutiny on the premise that only 85% could be utilized and the remaining has to be taxed has been left un-adjudicated upon by the authorities below when the Tribunal was pleased to direct the AO in the earlier years was to be followed in compliance to the provisions of Section 11 and 13. The assessee had filed return of income at NIL after adjustment of exemption u/s.11 and the claim of refund of Rs.1,61,760 was denied being the tax deducted at source. A perusal of the assessment order would clearly indicate that the Assessing Officer has tried to put a meaning to the assessee s activities as commercial activities for the purpose of denying the assessee s claim of application of income duly exempt u/s.12A when only the surplus has been sought to be taxed u/s.11. In other words, the learned Counsel for the assessee submitted that both the authorities have tried to give a meaning to an educational institution activities carried out being an educational institution by relying on the findings when the assessee was sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n insofar as it was not the case of the Assessing Officer to correlate the earning of income other than as declared by the assessee on assumptions and presumptions. The learned CIT(A) therefore, proceeded to consider the case of the assessee when he, after taking into cognizance of the totality of the circumstances , held that there was no material evidence in the hands of the AO for further addition of receipts of the capitation fees. The Assessing Officer on the basis of some discriminating paper found during the course of search in the Assessment Year 2006-07 presumed that there might be some receipts of capitation fees in the earlier Assessment Years which he estimated inspite of the search documents available to him did not indicate that the capitation fees must have been received in the impugned AYs as well. The assessee had relied on the decision of ITAT, Kolkata in the case of LMJ International v. (119 TTJ 214) to substantiate that the undisclosed income cannot be brought to tax on assumption either by going forward or backward when the specific assessment has to be made on the basis of difference between the disclosed income and the undisclosed income found at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 2001-02, Rs.6 lakhs in the AY 2002-03 even now which, we are inclined to confirm as per the order of the learned CIT(A) and also as pointed out by the learned CIT-DR supporting the observations of the learned CIT(A). 13. However, the learned Counsel for the assessee has pointed out the reasons for the learned CIT(A) deleting the addition on account of expenditure disallowed u/s.40A(3) which only fortified the assessee s contention for availing exemption u/s.11 of the Act was predominantly in the mind of the learned CIT(A) who also ought to have allowed the claim of Rs.3.86 lakhs as purchases of laboratory equipment in the Assessment Year 2004-05 which was never claimed as expenditure in the first place. The learned Counsel for the assessee has submitted that the learned CIT(A) has observed that this expenditure was incurred for purchase of the assets of the institution therefore, cannot be considered for disallowance as bogus insofar as they are part and parcel of the educational institution which have been incurred for assisting in imparting education for which the learned CIT(A) has granted exemption u/s.11 of the Act. The Assessing Officer therefore erred in di ..... 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