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TMI Blog2013 (11) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing." 3. The grounds raised in the Assessee's appeal read as under:- "1. That the learned CIT(A) has grossly erred both in law and on facts in holding that, appellant is not entitled to claim of exemption u/s. 11 and 12 of the Act. 1.1 That the Ld. CIT(A) while concluding that appellant is not entitled to claim of exemption of the Act has misconstrued the statutory provisions of law and, has failed to appreciate the facts and circumstances of the appellant trust and as such the denial of exemption is not in accordance with law and hence untenable. 1.2 That the finding of the Ld. CIT(A) that "facts brought in by the AO has not been rebutted by Ld. A.R. that various TV films are being manufactured are commercial in nature" is factually incorrect, overlooks the written submissions and, documentary evidence on record and thus, arbitrary, invalid and unsustainable. 1.3 That the judicial pronouncements relied upon by the Ld. CIT(A) in the case of Aman Shiv Mandi Trust vs. C.I.T. reported in 296 ITR 415 (P&H) and C.I.T. vs. National Institute of Aeronautical Engineering Education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information, but no books of accounts were produced and various information / documents having bearing on the finalization of assessment were also not filed. Ld. AO further asked various details and information and explanation. Ld. AO noted that only some of the information were supplied and assessee's counsel repeatedly asked adjournments. In view of the above, Ld. AO noted that assessee does not want to furnish the remaining information / documents/ clarifications and also does not want to produce the books of accounts. 4.1 Ld. AO noted that as per the Trust Deed the Trust is created for carrying out the following objects of the public charity and for the benefits of all Indians without any discrimination of caste, colour, creed, sect, sex, age and / or other natural or manmade differences. :- (a) To promote and / or carry out directly or indirectly research into scientific, cultural and spiritual heritage of India; (b) To promote and / or carry out directly or indirectly research oriented study of Indian history and civilization; (c) To convey and spread knowledge and information regarding (a) & (b) above through all media including electronic media and satellite and televis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asstt. Years 2004-05 and 2005-06 both show no income from the production of the above films; huge expenditure to the tune of Rs. 11,44,718/-; Rs. 1,28,96,203; and Rs. 1,89,88,064/- were incurred for the production of these films in the asstt. Year 2003-04, 2004-05 & 2005-06 respectively. The major sources of receipt was only donation in all these years; that the films were stated to have been produced and kept as its is. Ld. AO further noted that as per the statement of the managing trustee the production was done in the assessment year 2004-05 and 2005-06 also but no utilization of these films took place as yet except sale of DVDs of two of its programmes sometime in January, 2007; that there is no evidence of utilization of these films / programmes for charitable purpose; that Shri Ranade deposed inter-alia, that as a result of CBI's action donors known to them stopped their involvement and that they were not in a position to raise funds and take forward their activities; that deposition indicates that there was no application of income derived from property held under Trust for charitable purpose; that the films were produced and what was done with those is not apparent and it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anade deposed inter-alia that the anonymous donation were placed in Hundi and donors if they choose they write their names and addresses on the envelope and drop it in the Hundi. Mr. Ranade further stated that no panchnama was prepared as the Hundi was opened by the trustees. Ld. AO further observed that this contention of the assessee was not tenable, as in the absence of the panchnama there were no circumstantial evidence of cash donation. Ld. AO further noted that despite several opportunities no compliance was made by the assessee. 4.7 From the above, Ld. AO observed that it was apparent that the assessee has not been able to substantiate the nature and source of receipt of the amount under the head donation. The amount of Rs. 1,82,14,817/- was therefore, treated as assessee's income or undisclosed source within the meaning of section 68 of the I.T. Act. 4.8 Ld. AO further asked the assessee to explain the nature and details and furnish evidence in respect of the various expenses claimed by the assessee. Assessee has stated that the records were not traceable and hence, information could not be placed. Subsequently, the assessee merely furnish the copy of vendor ledger withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee were not for charitable purposes. The aforesaid findings are in disregard of the fact that the assessee has duly been granted a certificate under section 12A of the Act and further a certificate u/s. 80G of the I.T. Act, had also been granted. The adverse findings recorded are arbitrary and conclusion that the activities of the assessee are not charitable is contrary to the settled legal principles besides otherwise being contrary to facts on record. There was no material the Ld. Addl. DIT(E) that the assessee was engaged in any business activities and the motive was not charitable but commercial. 4. That, the Ld. Addl. DIT, Range-I, Delhi, has grossly erred in holding that assessee's income amounting to Rs. 1,84,17,352/- derived from property held under Trust was not at all applied for charitable purpose and erred in not allowing exemption under section 11 of the I.T. Act, 1961. In fact he has further erred that apart from applying the entire receipts there was an excess of expenditure over receipts and further the assessee trust has also made an application of Rs. 25,37,659.00 by way of net capital expenditure for charitable purposes." 5.3 In this regard, Ld. CIT(A) note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee including the managing trustee, the claim made by the assessee was not found to be genuine. The assessee was not entitled to registration under section 12A." 5.6 Ld. CIT(A) concluded as follows in this regard:- "Further, reliance is placed on the judgment of the Hon'ble Uttarakhand High Court in the case of C.I.T. (Dehradun) vs. National Institute of Aeronautical Society, reported at 2009 TIOL-314-HC- Uttrakhand, wherein, the Hon'ble High Court has held that charity is soul of the charitable purpose expression, mere trade and commerce in education cannot be said to be a charitable purpose. The ratio of the above said judgment of the Hon'ble Uttrakhand High Court clearly hits the present as assessee was not able to explain as to how it is involved in the charitable activity. By producing various films what kind of charity has been done? It has not been fully explained and properly proved by the assessee. In view of the reliance on the above said judgments of the Hon'ble Punjab and Haryana & Uttarakhand High Court, in my considered opinion action of the Ld. AO deserves to be confirmed and ground No. 3 and 4 are dismissed." 5.7 Thereafter, Ld. CIT(A) considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 12A of the Act." 5.8 Ld. CIT(A) further noted that assessee has furnished a statement of donation received in which out of total 54 donations received by cheques, names and full address of 33 donors were given. Ld. CIT(A) noted that in 20 cases only names were available and in only one case neither the name or address was available. It was further submitted that section 115 BBC providing for taxation of anonymous donations was inserted by Finance Act, 2006 only with effect from 1st pril, 2007. Ld. CIT(A) concluded in this regard as under:- "Ground NO. 5 is against the addition of Rs. 1,82,14,817/- u/s. 68 of the I.T. Act. In this regard, Ld. AR has placed his reliance on the judgment of Hon'ble High Court in the case of DIT(E) vs. Keshav Social and Charitable Foundation, reported in (2005) 278 ITR 152. While admitting the additional evidences assessee was able to give full details of the donors. Furthermore, assessee's reliance on the judgment of the Hon'ble Delhi High Court is appreciated as well as provisions of Section 115BBC of the I.T. Act cannot be attracted because it has been inserted by Finance Act, 2006 w.e.f. assessment year 2007-08, by which anonymo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law it has been held that under section 11(1) of the Act every charitable or religion trust is entitled to deduction of the certain income from its total income of previous year. The income so exempt is the income which is applied by the charitable trust to its charitable or religious purposes in India. Furthermore, it was observed that in that case it was found that the assessee had applied more 75% of the donation for charitable purposes as per its objects. In the background of the aforesaid premises, it was held that in the case law above that the donations received were exempt as they were held to have been applied for charitable purpose. 8. In the present case before us complete details of the donations received is not on record. The donations and the income so generated has been held by the Ld. CIT(A) to have not been applied for charitable purposes. In these circumstances, we find that it is contradictory on the part of the Ld. CIT(A) to hold that the donations are disclosed and exempt and at the same time hold that assessee is not entitled for exemption u/s. 11 & 12 of the Act in as much as it is not engaged in any charitable activity. 9. Apart from above, Ld. CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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