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TMI Blog2012 (12) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... fore could not form part of the income & expenditure account as prescribed by law. Assessing Officer misdirected himself to hold a view that Vidya Jyoti Trust was not the school which was seeking corpus funds or voluntary contribution in the form of building or general fund when all the property of the Trust has been created for the purpose it was registered u/s.12AA. Therefore, the contention of the CIT-DR is on the effort to identify the trust Vidya Jyoti Trust as different from the educational institution it runs for which purpose the CIT granted registration. The assessee has stated that the two donors corrected themselves to submit that it was school to which they applied for the corpus fund therefore negates the CIT(A) finding that the amounts be confirmed u/s.68, was declared as fund by the Trust who runs the School - Cross objection by the assessee-Respondent is bound to be allowed and appeal of the Revenue is dismissed. - I.T.A.No. 333/CTK/2012, C.O. No.31/CTK/2012 - - - Dated:- 20-7-2012 - Shri K.K.Gupta and Shri K.S.S.Prasad Rao, JJ. For the Appellant: Shri Saswat Kumar Acharya, AR For the Respondent: Smt. Paramita Tripathy, DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own educational institution in the name and style of DPS KaIinga near Adhalua, besides NH 5 in between the Cuttack Bhubaneswar stretch of the road. The DPS was established to impart quality education to the students of Orissa affiliated to the Central Board of Secondary Education, New Delhi. Immediately after establishment of the school, an application in form No.10A read with rule 1 7A was filed before the Commissioner of Income Tax, Cuttack Charge, Cuttack on 01.11.2004 along with a petition for condonation of delay praying interalia for registration U/s 12A of the LT. Act to be effective from the date of creation of the trust i.e., 28.06.2001. The learned CIT granted registration U/s 12A of the I.T. Act in favour of the assessee vide registration No. Tech./12A/337-08/2010-11, dated 07.05.2010 effective from 28.06.2001. Since the assessee trust fulfilled all the requirements as defined U/s 2(15) of the I.T.Act. The said section defines charitabIe purposes that includes relief to Poor, education, medial relief and the advancement of any other object of general public utility for which the assessee trust is created. Thus, the income of the assessee trust being charitable in natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trust fund. As a matter of fact, the so called statement obtained on oath from them have been concluded by the A.O. behind the back of the assessee and those two donors being scared of the income tax officials have denied their involvement in order to be in safe side. Would the A.O. have allowed the examination of the donors in front of the assessee appellant truth could have come to the light. Depending upon the said hearsay the Assessing Officer concluded that the whole amount of Rs.52 Iakhs shown as cash received from various persons as contribution to the corpus fund is treated as cash credit under section 68 of the 1.1. Act. 1961. Since, deemed income under section 68 of the I.T. Act. is neither a voluntary contribution, nor an income from the property held by the trust, it cannot be exempted U/s 11 while computing the income of a trust regd. U/s 12A of the. l.T. Act. It is considered as income chargeable to tax. In other words, the assessee had income chargeable to tax of an amount of Rs.52 Iakhs. Accordingly, vide para-4,5, 6 of the order, the A.O. computed the income and tax component as under A. Income from other sources vide 3.3.4. Rs. 52,00,000 B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts inception i.e. 28.6.2001. The Assessing Officer has not brought in record evidence in support of his addition of Rs.15,06,000 and Rs.3,38,400. In CIT v. Shyama Shyam Dham Samiti Kripalu Kunj (2010) 323 ITR 299 (All), the assessee was a trust registered u/s.12A of the Act. During the relevant period the assessee had received plots of land by way of gift/donation from donors. The AO had added the amount towards value of land and expenses as unexplained investment u/s.69 of the Act. The Hon ble High Court held that value of land and registration charges were not assessable as unexplained investment. In view of the above judgment, the addition of Rs.15,06,000 and Rs.3,38,400 made by the AO are deleted. 6. The learned CIT-DR initiating her arguments pointed out that the learned CIT(A) has not considered the issues in the manner so as to consider the increase in the corpus fund in accordance with the finding of the Assessing Officer. The cash receipts in the books of account of the assessee remained unexplained. The whole amount of Rs. 52 lakhs shown as cash receipts from these persons has contributed to corpus fund was treated by the Assessing Officer u/s.68 because the donations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned CIT(A) thereafter verified the income expenditure account to uphold the contention of the assessee that the corpus funds have been received without being routed through income expenditure account cannot be subject to taxation u/s.68 of the I.T.Act. Once the purpose has been met for which the certificate granting registration u/s.12A has been made the learned CIT(A) verified only the two donors who corrected themselves later to indicate that the donation to the corpus fund was to the school which alone was the income expenditure account of the school run by them i.e., Vidya Jyoti Trust. However, he confirmed the two loan creditors amounting to Rs.37,000 against which the assessee has filed Cross objection as mentioned above. Furthermore, he continued to consider the addition of Rs.15,06,000 and Rs.3,38,400 for the purpose of holding a view that the contribution to the corpus fund can be received by the assessee in the form of land and other gifts. The development fund has been received from the students for the purpose of utilization held by the assessee as general fund when the addition of Rs.15,06,000 has increased the general fund hold by the assessee to Rs.24,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the assessee before us has submitted that the development fees was received to contribute to the building when the committee seeking such funds made it voluntary was therefore directly held as a liability to identify with the general fund when the major portion was from the students and the remaining was contributed by the managing committee. The managing committee had started construct building was therefore within the parameter specified under the provisions of Sections 11 and 13 of the I.T.Act. The property held by the assessee in trust has been rendered in accordance with the provisions of the Act therefore was the only criteria in the mind of the Assessing Officer of not having been routed through the income expenditure account. We have perused the assessment order when the Assessing Officer has made efforts to determine the income for consideration of exemption u/s.11 but holding the sum of Rs.52 lakhs taxable under the provisions of Section 68 he has determined the same when actually he has allowed the application of income of assets amounting to Rs.4,51,93,129. This really indicates that the Assessing Officer misinterpreted the provisions of Sections 11 and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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