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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 ..... mounting to Rs. 37,000 out of Rs. 52,00,000 made by the AD towards addition of donation to the corpus fund u/s.68 of the I.T.Act. On test check of two donors revealed that their names have been entered in the long donor list, when they had neither the resources to donate nor they had actually made any donations to the trust. Further it is not possible to examine all the donors on oath in the entire long list for total donation of Rs.52,00,000 which had not been entered in the income-expenditure account. " 2. A Cross-objection has been preferred by the assessee-respondent supporting the impugned order of the learned CIT(A) insofar as relief granted by the learned CIT(A) against which the Revenue is in appeal. However, in the Cross objection the assessee has disputed the confirmation of the disallowance of Rs.37,000 by raising the following ground: "For that the Ld. CIT(A) Cuttack is not at all justified in making disallowance of Rs.37,000 when in fact the affidavits endorsing the payments of the said donation amount were furnished, and thus the said addition deserves to be deleted." 3. The brief facts as have been brought on record are that the assessee is a charitable trust in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r itself in educational map of eastern India. For this proposition the assessee further relied on the authorities i.e., C.l.T. vrs. Geetanjali Education Society (2008) 174 Taxman 440 (Raj) and Director of Income Tax (Exemption) Vrs. Keshab Social and Charitable Foundation (2005)278 ITR 152 ( DeL). Since the activity of the appellant trust is charitable in nature and more than 85% of the revenue receipts are being applied for the charitable purpose the sections from 25 to 38 have no application to the present trust. Despite this explanation, the Assessing Officer questioned the propriety of the development fee to the tune of Rs.15,06,000 and gift of the land for Rs.3,38,400 by observing that - a) Verification of the balance sheet and income expenditure statement revealed that Rs.15,06,000 received as development fee does not appear in Expenditure statement on development fee it was submitted by the assessee that the fees were collected at the time of admission of students as per the fees structure. On the other words, it was part of the admission fee and needed no separate treatment. Hence it is added to the income expenditure statement as income. b) In absence of any mention to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of disallowance of whole of the amount of entire corpus fund as cash credit u/s.68, he observed as under: "The AO examined two of the donors and the result of it was conveyed by him to the assessee. The said two donors were shown by the AO the entries in the books of the assessee. On oath, they denied of making any contribution to the assessee at all. The learned A/R of the appellant during the course of appellate proceeding filed a copy of the affidavit by Shri Bishnu Prasad Mohanty and Shri Susanta Kumar Pradhan. Both the affidavits are dated 01.02.2012. The above two affidavits were not filed by the assessee before the AO. Also the affidavit contains only bare assertions. In K.P.Davis v. ITO (1995) 53 LTD 79, 84, 85, 86, 87 (Coch) = 52 TTJ (Coch) 362, it has been held that an affidavit is certainly entitled to the utmost consideration, but if it contains only bare assertions without even citing the nature of the transaction or purpose for which the impugned amounts are made available with the assessee, and if the assertions are not supported by any material on record, the affidavit would not be worth the paper on which it is written. In view of the above, the AO is direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the learned CIT(A) on the test check considered the two donors alone as not having explained their identity, creditworthiness and genuineness considered it fit for confirming the same as income in the hands of the assessee goes to the root of the contention of the Assessing Officer that the whole of the corpus fund was on the basis of such donations not received voluntarily as the statements indicate that the donors had not given donation to the assessee but to a school. She supported the order of the Assessing Officer for her part of submissions. 7. The learned Counsel for the assessee submitted that the corpus fund has not to be routed through the income & expenditure account insofar as the endeavor of the Assessing Officer was to tax the corpus fund u/s.68. The Assessing Officer contradicted his own finding when the two donors appeared before him by way of sworn affidavit submitted that the donations were to the corpus funds for the school which the Trust is running on the basis of registration granted to it by the learned CIT. The income & expenditure account therefore rightly did not have the receipts thereof when it was submitted that the corpus fund was on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned CIT(A) for part of his submissions. However, he pointed out that the assessee has preferred to object the confirmation of addition of Rs. 37,000 out of Rs.52 lakhs in view of the fact that the learned CIT(A) misdirected himself to hold that school namely Delhi Public School was the educational institution run by the assessee trust namely Vidya Jyoti Trust therefore alone could not be faulted on a finding out amongst so many donors that the remaining two donors who stood corrected later on when they filed affidavits holding that they were not aware of Vidya Jyoti Trust being the trust which Delhi Public School is property of. He prayed that this petty addition may also be directed to be deleted which goes against the very finding of the learned CIT(A) otherwise. 9. We have heard the rival contentions and perused the impugned orders of the authorities below and the material available on record. On consideration of the facts and circumstances of the case, we are inclined to find merit in the contention of the learned Counsel for the assessee supporting the order of the learned CIT(A). Corpus fund is the property of the Trust. The donors contributed the donations therefore could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion it runs for which purpose the learned CIT granted registration. The Assessing Officer by observing hat the excess of expenditure over income rendered by the trust amounting to Rs. 24,88,855 was not to be taxed therefore concluded that the return filed by the assessee was in accordance with the provisions of I.T.Act,1961 as applicable to Trusts and Societies claiming exemption u/s.12A.This resulted in his allowing the claims u/ss.11 and 13 therefore could not be revisited for the purpose of taxation of Rs. 52,00,000 as corpus fund introduced in the impugned year u/s.68 when he acknowledged that Rs. 4,51,93,129 stood applied to the application of income in the assets of the Trust. The learned CIT(A) therefore rightly considered the deletion of Rs. 52,00,000 but Rs. 37,000 therein in the light of the facts as mentioned earlier. The learned Counsel for 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 learned CIT(A) finding that the amounts be confirmed u/s.68, was declared as fund by the Trust who runs the School. 9.1. In view of the above, the Cross objection by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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