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TMI Blog2012 (5) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Devi Shakuntala Charitable Foundation. 4. Holding that the assessee is fully eligible for the deduction claimed at ₹ 51,17,576/- as an application of income u/s 11 and 12 for the acquisition of fixed assets, without appreciating the facts narrated in the assessment order. 5. Deleting the addition of ₹ 1,27,144/- on account of telephone expenses and ₹ 1,39,644/- made by the Assessing Officer on account of Travelling expenses. 6. Holding that the assessee is eligible for deduction u/s 11(1)(a) of the Income-tax Act, 1961. 3. We have considered the rival submissions and have gone through the orders of the authorities below. Facts of the case are that the assessee is a society registered with the Registrar of Societies vide registration No.368/90 dated 14.11.1990. The assessee society runs an engineering college under the name and style of Oriental Institute of Science Technology . Registration u/s 12A of the Income-tax Act, 1961, was granted by CIT, Bhopal, vide order No. Hqrs/Insp/12A/38/92-93 dated 23.11.1992. 4. In the assessment order, the A.O. has observed that the assessee has given interest free loan to related concern Devi Shakuntala Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable in the case of the assessee. 8. Next grievance of the Revenue relates to deletion of disallowance of donation to M/s.Devi Shakuntala Thakral Charitable Foundation. In the assessment order, the A.O. has discussed this issue in para 6 at page 6 7 of his order. The A.O. observed that the donation of ₹ 5,05,00,000 has been given to Devi Shakuntala Thakral Charitable Foundation. This is a huge donation and after this donation, there is a net deficit, meaning thereby that the donation has been given out of past accumulated funds which is not allowable in view of explanation to sub-section (2) of section 11 of the LT. Act. The A.O. further observed that the donation has been given to related concern and, therefore, there is a violation of section 13(1)(c)(ii) and thus the provisions of section 11 12 shall not operate. In the concluding para, the A.O said that the provision of section 13(l)(d)(i) and 13(I)(c)(ii) are clearly attracted and the benefit of section 11 12 is not given to the society, therefore, the computation of total income is made under the normal provisions of the law and hence he had disallowed the donation. 9. After considering the facts, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s.12A of the I T. Act and, therefore, the deduction of the same is fully admissible. The assessee contend further that in earlier years also similar disallowance was made on identical reasons and the learned first appellate authority deleted all such additions. The main order was passed in A. Y. 2003-04 dated 29.01.2007 (Appeal No. CIT(A)-II/Bpl/IT-85/06-07). 13. By the impugned order, the ld. CIT(A) allowed assessee s claim for deduction on account of acquisition of capital assets after having following observations :- 27. As regard to issue of application of income in respect of acquisition of fixed assets, we find that it is not in dispute that such assets have been acquired for the purpose of advancement of the objects of the society and, therefore, such investment should be treated as an application of income in terms of the provisions of Section 11 of the Act. Thus, these grounds of the Revenue are without any merit, hence, dismissed in all the years. 14. We have considered rival contentions. As the Tribunal in assessee s own case has already held that the assessee is eligible for claim of deduction u/s 11 and since the assets have acquired for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ety for actual expenditure is not a benefit given to the members. Private benefits barred u/s.13 cannot be inferred from normal transaction which are not barred. Reasonable expenditure incurred for telephone cannot be hurdle in the way of exemption. The assessee submits, therefore, the facts of the case have not been appreciated by the learned A. 0. objectively and without any concrete and positive evidence he has recorded findings on assumptions, presumption, conjectures and surmises an erroneously held ?that section 13 is attracted. The provisions of section 13(2)(c) in view of the facts above has no application, therefore, the findings of the A.O. are wholly wrong, injudicious and unlawful and be quashed and it be held that incurring of expenditure in the performance of duty by the office bearers does not disentitle the assessee institution from the benefits of provisions of section 11. It be, therefore, held that the assessee is eligible for deduction and all other benefits as provided in section 11 of the 1 T. Act. It is reiterated that there are no payments in respect of telephones of any of the members or the office bearer of the society for their personal benefits. All the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hnical Education is situated at Delhi, therefore, visit to Delhi was inevitable and there was no evidence on record that such visit was for personal visit of the office bearer. Detailed finding has been recorded by CIT(A) at page 23 as reproduced above, which have not been controverted by Department by bringing any positive material on record. 21. Accordingly, we do not find any infirmity in the order of CIT(A) in deleting the disallowance of travelling expenses of ₹ 1,39,644/-. 22. With regard to ground no.6, the assessee's contention is that the A.O. has denied the deduction claimed at ₹ 1,65,22,945/- on the ground that since there is a violation u/s.13, therefore, the said deduction as an application of income is not admissible. The assessee contended that there is no violation of section 13 and, therefore, this deduction is admissible as an application of income. Thus the deduction claimed at ₹ 1,65,22,945/- be allowed. 23. By the impugned order, the ld. CIT(A) held that the assessee is eligible for deduction u/s11(1)(a) of the Act. Following was the precise observation of the CIT(A) :- I have considered the submission of the appellant. I find th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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