9911796707
TMI Blog2017 (5) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 (hereinafter referred to as the 'Act'). The assessee has shown that it has received Rs. 5,46,409/- during the year towards corpus fund of the society, out of which Rs. 1,00,208/- was utilized and the balance amount of Rs. 4,07,139/-. In the assessment order, the Assessing Officer has noted that the assessee did not have registration under section 12A of the Act and issued notice under section 148 of the Act and reopened the assessment. Thereafter, Assessing Officer after following due procedure, completed the assessment by determining the total income of Rs. 5,62,420/-. On appeal, ld. CIT(A) deleted the entire addition. In Departmental appeal, the ITAT, Visakhapatnam vide its order dated 17/01/2006 in ITA No. 456/V/2003, set aside the order passed by the ld. CIT(A) and remitted the matter back to the Assessing Officer for examining the issue afresh in the light of decision of the Hyderabad Bench in the case of M/s. Nirmal Agricultural Society Vs. ITO (71 ITD 152), after providing necessary opportunity of being heard to the assessee. 3. In pursuance of the order passed by the ITAT, the Assessing Officer called the assessee to produce evidence in the form of books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the sides, perused the material available on record and orders of the authorities below. 9. The assessee is a society registered under the Registration of Societies Act, for the Assessment Year 1992-93, the assessee did not have a registration under section 12A of the Act. The main object of the society as per the MOA is as under:- "(a) The programme of this body shall first and foremost include the spreading of spiritual and moral preaching and also spiritual educations and social service provided to the exceipients no charge to them irrespective of caste, religion and creed, are follows:- (i) Spiritual and Moral service to the masses (ii) To extend and establish and also to run schools, Orphanages, Widows homes and other charitable institutions. (iii) Shelter homes for the aged and homeless (iv) Any other services which might to needed for betterment of the people. (a) Various methods and programmes shall be employed and institutions might to be established for them most effective practical fulfillment for these purposes and objectives and to the highest exaltation of the Lord Jesus Christ and Moral Standards of the masses. (b) Programme and service institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "5.5 1 have carefully considered the details Fled in the form of paper-book and other submissions made. The appellant is a society registered under the Registration of Societies Act. For the relevant year e, the previous relevant for assessment year 1992-93 it did not have registration u/s. 12A of the I.T. Act. The objectives of the society as per the MOA is as under: "(a) The programme of this body shall first and foremost include the spreading of spiritual and moral preaching and also spiritual educations and social service provided to the exceipients no charge to them irrespective of caste, religion and creed, are follows:- (i) Spiritual and Moral service to the masses (ii) To extend and establish and also to run schools, Orphanages, Widows homes and other charitable institutions. (iii) Shelter homes for the aged and homeless (iv) Any other services which might to needed for betterment of the people. a) Various methods and programmes shall be employed and institutions might to be established for them most effective practical fulfillment for these purposes and objectives and to the highest exaltation of the Lord Jesus Christ and Moral Standards of the masses. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities. Houses are built on the land of poor agriculturists. The assessee-society has no legal title or right over the land or houses of those villagers/agriculturists who are the beneficiaries. The purpose and activity of the assessee society is to engage In such charitable activities. Whatever amount has been spent on those programmes /previously they were spent in the usual course of carrying on its acclaimed objects Therefore, there is no basis whatsoever, factual or legal to hold that the amounts spent by the assessee is constructing houses or reclaiming land are capital expenditure. As far as the assessee concerned, those expenses are revenue expense. The assessee has no right or title over those properties Those expenses were incurred as part of its normal activities for which the society was formed Therefore, the money spent by the assesseesociety in constructing houses, reclaiming the land, for non formal education etc has to be allowed as deduction in the computation of income." 5.8 The AR's argument was that the decision of the Hon'ble ITAT in the case of Nirmal Agricultural Society is applicable to the present case as the ITPT held that tied up grants received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e so called corpus donation was received. It was merely argued that the donation was received for carrying charitable activities and was sent for charitable purpose such as contribution to widow destitute, maintenance of orphanages etc., without any documentary support. In the absence of any documentary evidence the claim that the donations received was tied up fund and was received and utilized for purposes specified by donor remain unsubstantiated and not proved. There is no material or information available on record to indicate that the donation was made by the donor for a specific purpose or with certain conditions for spending the amount. Hence the argument that the donations are tied up fund and constitute corpus has no basis and is without merit. 5.11 The AR argued that the form FC-3 filed under the. Foreign Contribution would go to show that the donations received were tied up funds. The president K. Ester Rani also filed an affidavit stating that the funds were tied up funds. I have gone through the details filed. It is seen that as part of the paper-book copies of form FC-3 relating to the years 1994-95 and 1995-96 were filed. These forms were not filed for the other a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that in that case there was no dispute as to the corpus nature of the foreign aid. On the other hand in the appellant's case, the entire receipts are by way of donation from abroad; and there is no evidence to show that the donations were given with a specific direction by the donar to spend for a particular purpose. The assessee-appellant had treated some part of the donation as revenue receipt and some as corpus fund, and there is no material basis for such distinction and treatment. As it is not proved that these contributions are made with a specific direction that they shall form part of the corpus at the trust, the entire amount would take the characteristics of income in view of the provisions contained in section 12 of the I.T.Act and would form of total Income unlike in the case of Nirmal Agricultural Society and as a result, the issue of nature of expenditure whether revenue expenditure or capital expenditure arises, which distinguishes the applicability of the decision in Nirmal Agricultural Society to the present case. 5.13 It is in this context that the Hon'ble ITAT, Visakhapatnam in the assessee's case directed the P0 to examine the expenditure claimed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their brother-in-law Mr.Yesupadam. There were disputes between them and one of the brothers namely D.K,David Raju was murdered. It appears various litigations are pending to resolve ownership to properties and control over assets. Thus there is every indication that the society was not meant and run wholly for charitable activities or religious activities. The society did not have registration u/s.12A for the subject assessment year. Therefore the AO is justified in assessing the society as an AOP. Further taking into account the totality of the facts and circumstances, and the nature of information filed in the paper-book and materials available it would be reasonable to estimate the income of the society at 75% of its gross receipts. Accordingly, the AO is directed to assess the income of the appellant as an AOP at 75% of its gross receipts for the year." 12 We find that the facts are remain same that the assessee is not able to point out any mistake/wrong in the order passed by the ld.CIT(A). We also find no infirmity in the order passed by the ld.CIT(A). Thus, this ground of appeal raised by the assessee is dismissed. ITA No. 82 to 86/VIZ/2014 13. The facts in ITA No.81/VI ..... 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