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TMI Blog2019 (4) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no basis to hold onto such suspicion as far as the assessee society is concerned. In the instant case, firstly the funds belonging to the assessee society have been physically found in the possession of the Bank at its strong room and not in possession of Shri keshav Badaya. Secondly, such funds have not been used or applied and have been physically found and thus, there is no benefit which can be said to have actually been gained by Shri Keshav Badaya either directly or indirectly in his individual capacity by having such funds in the possession of the Bank. In light of above, we are of the considered view that the provisions of section 13(1)(c) are not attracted in the instant and the contentions so advanced by the Revenue and the ld CIT DR cannot be accepted. Therefore, we find that it is a case of mere suspicion and not a conclusive finding and even the Department itself has given a clean chit to the Bank. As far as the assessee society is concerned, bank officials as well as the assessee s records conclusively prove that the funds so found are fees collected from the students duly recorded in the books of accounts and infact, such amount has been seized by the Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that the assessee society is withdrawing the funds of the society in the guise of scholarship expenses systematically over a period of time and such funds are not reaching the students concerned in whose name the scholarship payments have been shown to have been made, in such a case, the authorities have all the right and the jurisdiction to proceed against the society. However, in the instant case, there is nothing on record which has been brought on record to prove such mis-management and diversion of society funds. In our considered view, scholarship payments are genuine payments made by the assessee society and there is no basis to hold that the assessee society has misused the society funds in guise of scholarship payments. Therefore, the said findings of the ld Pr CIT cannot be sustained and cannot be made a basis to hold that the assessee society is not carrying out its activities as per its objects and the exemption granted u/s 12AA should be withdrawn. Payment made to Rajasthan Housing Board in contravention of Section 11(5) read with Section 13(1)(c) - We therefore find that the assessee society has entered into an agreement to sell with Adarsh Gyan Vidhalaya Sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which can conclusively demonstrate that the assessee is not working as per the objects for which registration was initially granted, that the activities of the assessee s society are not genuine or any personal benefit has been derived by any person so defined u/s 13(3) of the Act. The case of the assessee therefore doesn t falls U/s 12AA(3) and 12AA(4) of the Act. In light of our details discussion and findings, the registration of the assessee society u/s 12AA is hereby directed to be restored from the date the same was withdrawn and cancelled by the ld. Pr. CIT in terms of the impugned order. - ITA Nos. 09 And 10/JP/2019 - - - Dated:- 18-3-2019 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri Dilip Shivpuri (Adv) And Shri Rohit Badaya (CA) For The Revenue : Shri Varinder Mehta (CIT-DR) ORDER PER: VIKRAM SINGH YADAV, A.M.: These are two appeals filed by the assessee society against two separate orders of the ld. Pr.CIT (Central), Rajasthan, Jaipur dated 14/12/2018. The ld. Pr.CIT has passed an order U/s 12AA(3) and 12AA(4) of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch proceedings, cash amounting to ₹ 1,56,59,500/- was found in an almirah in the Clearing House room of the Integral Bank. As per ld Pr.CIT, this entire cash was not found recorded in the books of accounts of the Bank and out of this cash of ₹ 1,56,59,500, majority of amount i.e. ₹ 1,38,08,000 (6904 notes) comprises of 2000 rupees notes and out of which 2289 notes totaling to ₹ 45,78,000 were in new series and which was taken out of the banking system in an illegal manner since such huge withdrawals were not yet permitted by the RBI from any account. It has further been stated by the ld Pr.CIT that this cash of ₹ 1,56,59,500/- was claimed to be belonging to St. Wilfred group of colleges. 6. Simultaneously, a survey u/s 133A of the Act was conducted at educational institutions run by the assessee society. During the course of survey, the ld Pr.CIT stated that it was observed on the basis of evidences collected and statements recorded that the assessee was collecting fees in old denomination of ₹ 500, even after notification of demonetization by the Government of India. Cash of ₹ 2,21,000 was found in old denominations dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash of the bank and in lieu thereof, ₹ 2000 notes were taken out. This modus-operandi, as is evident from the perusal of the hand-written sheet and the Official Daily Sheet, is that the key persons of the bank were regularly exchanging old currency with new currency in an unauthorized and illegal manner. Further the statement of Shri Harish Gupta was also recorded wherein he admitted that the difference in denominations on these two sheets is on account of exchange of currency on the instructions of Shri Keshav Badaya, CEO of Integral Bank. This shows that the management of St. Wilfred s Educational Society which was also controlling the operations of Integral Bank abused the official position and exercised undue influence over officials of the Bank. It was seen that the ₹ 500 notes collected as fee in the St. Wilfred group of Colleges were being put in the cash of the Integral bank and corresponding number of ₹ 2000 notes were being taken out for personal consumption of the members of the St. Wilfred s Education Society. Accordingly, the ld. Pr.CIT has stated that the old currency notes received from the students as fee was never applied for the purposes of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the assessee with regard to the intended application of such funds by the assessee. If the assessee did not intend to divert any funds, and if they actually intended to use the said funds for the purposes of the assessee society itself, the same would have been recorded in the books of accounts of the assessee. However, when the Income-tax search/survey was conducted on 10.12.2016/ 11.12.2016, the Income-tax team did not find any entry in the cash book of the assessee relating to deposit of cash in its bank account and it is only after the survey / search actions of the Income-tax Department that the assessee has attempted to explain the source of funds. During the survey proceedings nowhere it was stated that fees in form of cash was transferred to Integral bank and only after the cash was found in the secret chamber, then explanation regarding the same was tendered. The ld. Pr.CIT further held that the assessee and the Integral Bank are not two independent entities, but share common management and the GM of Integral Bank has stated on oath that difference in denominations on these two sheets is on account of exchange of currency on the instructions of Shri Keshav Badaya, CEO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Bank, it is a clear case of attracting the provisions of section 13(1)(c) of the Act. 11. In his submissions, the ld AR of the assessee firstly drawn our attention to the provisions of Section 12AA(3) of the Act and submitted that a perusal of the provisions of section 12AA(3) shows that to invoke the provisions of this section, the Department has to prove that activities of the society/trust are not genuine or are not being carried out in accordance with the objects of the society/trust. In so far as section 12AA(4) is concerned, it is invoked if activities of the society/trust are in violation of section 13(1) of the Act. It was submitted by the ld AR that in the impugned order of the PCIT, except for making the allegation, has not provided even one piece of evidence to prove it. 12. Referring to the facts of the case, it was submitted by the ld AR that initially a survey which was later converted into a search u/s 132 of the Act was conducted at the office of M/s Integral Urban Co-operative Bank Ltd. having its office on Ajmer Road, Jaipur on 11.12.2016 and a survey u/s 133A was conducted on the office of the Appellant St. Wilfred's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be questioned by RBI, and not the Income-Tax department, and no escapement of income resulted therefrom. 16. It was further submitted by the ld AR that in the reply to the showcause notice filed on 10.12.2018, the assessee society had made it clear that as per the scheme of the Government of India, demonetization of ₹ 1000/- and ₹ 500/- bank notes was announced on 08.11.2016. The RBI stipulated that the demonetized bank notes could be deposited with Banks over a period of 50 days until 30.12.2016. The search on the Bank was carried out on 11.12.2016 much before the window of 50 days provided by the RBI was over. Hence, in these 50 days, both demonetised notes as well as fresh notes were being accepted by Banks. Banks were also allowed to withdraw fresh bank notes from their cash reserves. There was nothing illegal in the Bank having both demonetised notes and freshly-issued notes in the cash found. And, as stated above, if there was any discrepancy in the number of notes of demonetised currency and freshly-issued bank notes, it was for the RBI to question the Bank. How is the Appellant Society concerned with it. As far as the Appellant Society is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the rival contentions of both the parties and pursued the material available on the record. During the course of search operations conducted at the premises of Integral Urban Co-operative Bank Limited, cash amounting to ₹ 1,56,59,000 has been found in possession of the Bank at its clearing house room. The statement of General Manager of the Bank, Shri Harish Gupta was recorded u/s 131 on 9.12.2016. In response to question no. 30, he has stated that the said amount of ₹ 1,56,59,000 has been received during last 4-5 days till 8.12.2016. In response to question no. 34 where he was asked as to who has sent the said amount of ₹ 1,56,59,000 to the Bank, he has stated that the said amount is the fees collection of Saint Wilfred College and has been sent by Shri Keshav Badaya. In response to question no. 41, he has stated that the said amount has been kept in the custody of Branch Manager, Shri Dilip Maheswari and cashier, Shri Vikram Singh Shekawat. The statement of Shri Vikram Singh Shekawat was also recorded u/s 131 on 10.12.2016 and he has also been asked specific questions regarding the source of said amount of ₹ 1,56,59,000. In response to question no. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entry. If we correlate the said statements of accountants of the assessee society with the statements of the Bank s employees, we find that the said statements corroborates the fact that the source of cash found in the possession of the bank is the fees collected from students by Saint Wilfred College. It is also clear on close examination of these statements that the fee receipts are issued to the students at the time of receiving the fees from them, these receipts are updated in the individual student register maintained online in the computer system, daily cash collection summaries and relates vouchers are prepared. The said fee receipts and vouchers were available on record at the time of survey and has in fact been examined by the survey team and are very much part of books of accounts maintained by the assessee society in regular course of its activities. Therefore, once the source of cash has been established to be fees collected from the students, such fees have been recorded in the books of accounts and the cash has been physically found in possession of the assessee s bank, there is no basis to hold that there is any diversion of funds of the assessee society. In fact, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that assessee s funds have been diverted as the cash book doesn t reflect any outward movement of cash. Further, even the Bank has not recorded such funds and there are allegations regarding exchange of old currency notes with new notes. To our mind, once the cash is found in possession of the bank where the assessee maintains its bank account and it is confirmed by the Bank officials that the cash so found belong to the assessee society, there is no basis to hold onto such suspicion as far as the assessee society is concerned. 19. Now, in terms of involvement of Shri Keshav Badaya and intended benefit of such funds so found in the possession of the bank for the personal benefit of the Badaya family, the ld AR drawn our reference, during the course of hearing, at the constitution of the executive committee of Saint Wilfred Education Society where we find that Shri Keshav Badaya holds the post of the Secretary and his uncle, Shri Suresh Kumar is the President of the Society. Further, our reference was drawn to the list of Board of Directors of the Integrated Urban Co-operative Bank Ltd and we find that none of these two persons or any other Badaya family member is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operative Bank, being a concern in which members/trustees of the assessee society have a substantial interest. The term substantial interest in a concern has been defined in Explanation 3 to mean: ( i) in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of the other persons referred to in sub-section (3); ( ii) in the case of any other concern, if such person is entitled, or such person and one or more of the other persons referred to in sub-section (3) are entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern. 21. That is, members and trustees of the assessee society either individually or collectively are entitled at any time during the previous year, to not less than twenty per cent of the profits of such concern i.e, Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deny a legible claim of the assessee unless and until it is supported by verifiable evidence on record brought out through the process of detailed investigation. In the hands of the Integrated Bank where the cash was physically found in its premises, no addition has been made on account of unaccounted cash and there is also no finding regarding illegal exchange of old currency vis- -vis new currency as evident from the assessment order passed in case of the Integrated Bank for AY 2017-18. The same rather supports the case of the assessee society that the cash so found belongs to the assessee society and the Department has thus accepted the said fact and it has attained finality. Further, it is not the case of the Revenue that old currency which is not a legal tender cannot be brought to tax. Therefore, unless and until there is a finding by the appropriate authority that there was any illegality in the act of the assessee in accepting the fees in old currency, the same cannot be held against the assessee society. Therefore, we find that it is a case of mere suspicion and not a conclusive finding and even the Department itself has given a clean chit to the Bank. As far as the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceive any scholarship during F.Y. 2013-14 from the assessee society. Based on these findings by the Assessing officer, which were made available to the ld Pr CIT, the latter issued a show cause notice to the assessee society as part of the present proceedings and the issue of scholarship was one of the matter highlighted in the said show-cause. 25. The assessee society, in response to the show-cause, submitted that all the amount of scholarship were paid through account payee cheques issued in the name of the students, and all except one cheque have been debited in the bank account of the assessee society. The assessee society further submitted that all the students, in whose case reply was not received or who have denied having received the scholarship money, were called to the office of the Department along with their guardians and necessary verification was done. Regarding one student namely Yuvraj Singh, who denied to have received the scholarship, it was submitted that he did not put the cheque in his bank account and therefore, the entry made in the books of accounts was reversed on 31.03.2015, much before the survey/search. 26. The submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the show-cause notice, filed by the Appellant Society before the ld Pr.CIT. Further, in respect of other two students, necessary details are available on record which clearly demonstrates that they have received the scholarship money and the cheque issued to them have been cleared. 28. It was further submitted by the ld AR that the survey u/s 133A of the Act was undertaken on 11.12.2016 and the year relevant to the issue of scholarship money is financial year 2013-14. Many students had left, many may not remember, at the first instance, of receipt of scholarship money 2-3 years ago. However, to have the issue verified, most of the students that had been mentioned above were traced, and then produced before the concerned ITO and Confirmatory letters were also filed. The ITO made due verification, and was convinced that the scholarship money had indeed been received by those students. Hence, it is wholly incorrect for the ld. Pr CIT to state in his order that only confirmatory letters of students were filed, the students were not physically produced, and the onus was on the Society to produce them. It may be stated categorically that the onus of producing the stu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p payments. In response, the assessee society has submitted that all scholarship payments have been paid through account payee cheques and except in case of one student who didn t present the cheque, all the cheques have been cleared and payments are duly reflected in the assessee s bank account. Further, students were produced for verification before the ITO and an affidavit of assessee s accountant who accompanied the students for verification has been placed on record and confirmation letters from the students have also been filed. 32. Firstly, we find that the apprehension raised by the ld PR CIT is based on proceedings conducted by the Assessing officer for AY 2014-15 whereby the AO has issued the summons to the students and basis that, he has reached certain preliminary findings as the Assessing officer has finally passed the assessment order for AY 2014-15 much after the conclusion of the present proceedings before the ld Pr.CIT. We therefore find that the ld Pr.CIT has proceeded on the preliminary findings arrived at by the Assessing officer. Thereafter, even though he has issued the show-cause to the assessee during the impugned proceedings, however, his fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion letters filed by the students have been placed on record and the contents thereof have not been disputed. We also find that the payments have been made through account payee cheques to all these students and all the cheques have been cleared (except in case of one student) and the said payments has been duly reflected in the assessee s bank account. In respect of three students who have denied receiving the scholarship, the assessee has submitted due explanation in terms of one of the student (Yuvraj Singh) having not presented the cheque no. 780228 for payment of ₹ 3306 and the entry for such payments been reversed in the books of accounts on 31.3.2015, and in respect of other two students namely Anshu Agarwal and Pooja Kumar Jain, copy of their scholarship forms duly approved by the Principal, St. Wilfred s College for Girls, copy of account payee cheques issued in their favour bearing cheque no. 780912 dated 13.01.2014 for ₹ 3,180 cleared on 10.02.2014 and cheque no. 780917 dated 13.01.2014 for ₹ 3,180 cleared on 17.02.2014 respectively and copy of their confirmations addressed to DCIT(Exemption), Circle 1, Jaipur are available on record. Therefore, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same and nothing beyond that. As against that, a vendor or a service provider is in the business of supply of goods and provision of services and is running a commercial establishment where he maintains its records and reports his receipts and expenses and is subject to scrutiny of the tax authorities. Therefore, the latter is in a position and is expected to timely respond and co-operate in the proceedings before the taxing authorities and in case of non-compliance, he can be fastened with appropriate penalty actions. However, a student who is studying or has recently passed out of his/her college or University and who is issued summons under section 131, he or she is not expected to appreciate and respond in the manner as expected from any other service provider. Therefore, where there is a noncompliance on part of certain students to respond to such notices/summons in a timely manner and in some cases, where they have responded though with wrong facts, the authorities have to appreciate the same in a more realistic manner rather than in a ritualistic manner and their conclusions should not be guided solely by non-appearance of certain students before them. In other words, unl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tently false as it is illegal for M/s Adarsh Gyan Vidyalya Samiti to sell/transfer the land to the assessee. It was further observed that M/s Adarsh Gyan Vidyalya Samiti and the assessee society have three common members/trustees and therefore, M/s Adarsh Gyan Vidyalya Samiti is related entity within the meaning of section 13(3) of the Act. The ld. Pr. CIT has held that it is a case of use of society fund for the benefit of M/s Adarsh Gyan Vidhalaya Society, a related entity, which is in violation of the provisions of section 13(3) of the Act. Further, it was held that it is against the objects of the society / trust, as it is diversion of funds. Further, booking of Land as asset in the books of the assessee society for which the assessee has no legal ownership shows that Balance Sheet does not reflect true fair picture of the assets of the assessee. Further, it was held that this payment to Rajasthan Housing Board on behalf of M/s Adarsh Gyan Vidhalaya Society is neither a loan nor a donation but it appears to be an investment not allowable u/s 11(5) of the Act. Accordingly, a show cause notice was issued to the assessee society 39. In response to the show-ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common as that of the assessee society, had purchased land from Rajasthan Housing Board to build a school thereon. The Society paid the initial amount of ₹ 80,46,880/- but was unable to pay the rest of the amount of ₹ 6,73,70,930/- due to paucity of funds. Hence, the Appellant Society made an offer to Gyan Vihar Vidhalaya Society to purchase the said land since it wanted to expand its educational activities. It paid the said amount to Gyan Vihar Society, and entered into a registered agreement to sell in this regard with it. Thereafter, it wrote to RHB informing them of the said purchase and requesting them for approval for change of ownership in their records. Since, the approval had not been received, a formal sale deed had not been executed. Meanwhile, as stated in its reply dated 10.12.2018 before the PCIT, the Appellant Society had built a school building thereon, and was carrying on educational activities therein. Fee received from students studying in this building were being duly reflected in the audited accounts of the Appellant Society. 42. Regarding the findings of the ld PCIT(Central) in his order that the agreement to sell was illegal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome part of land on which assessee had set up an University was not in the ownership of said University as per certain government notification, same was unjustified. 44. It was further submitted by the ld AR that very allegation of the Respondent that the purchase price is actually an investment not sanctioned by section 11(5) of the Act is legally incorrect. The attention of the Bench is drawn towards section 11(5) (x) of the Act which states as under: ( 5) The forms and modes of investing or depositing the money referred to in clause (b) of sub-section (2) shall be the following, namely:- ( x) investment in immovable property. Hence, even by the argument advanced by the respondent, that the money paid is an investment, the investment in immovable property is a form of investment approved by the Act. 45. It was further submitted by the ld AR that no evidence has been placed on record by the respondent with regard to any direct or indirect benefit flowing to the trustees/members of the Society which might bring it within the ambit of section 13(1) r.w.s.13(3) of the Act. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Whenever the title of lessee in the said land is transferred in any manner what so ever the transferee shall be bound by all covenants and conditions contained herein be answerable in all respect thereof. In case the property is mortgaged to any financial institution, bank, Rajasthan State Industrial Development Investment Corporation Ltd. (RIICO) for a loan against it, the Rajasthan Housing Board accepts the right of the financial Institution, bank, Rajasthan State Industrial Development Investment Corporation Ltd. (RIICO) etc. to sell the said property to any person in exercise of the right reserved by the financial Institution, bank, Rajasthan State Industrial Development Investment Corporation Ltd. (RIICO) under the terms of the mortgage deed entered into by the financial Institution, bank, Rajasthan State Industrial Development Investment Corporation Ltd. (RIICO) and the lessee. 6. Whereever the title of lessee in the said land in transferor in any manner what so over the transferor and transferee shall, within three months of the transfer give a notice of such transfer in writing to the lessor. In the event of the winding up or liquidation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, as we have noted above, in the conveyance deed which allows such transfer subject to approval and sanction of Rajasthan Housing Board. 48. Now, in terms of seeking approval and permission of Rajasthan Housing Board to transfer the land in favour of the assessee society, we find that a letter dated 14.03.2014 has been written by Adarsh Gyan Vidhalaya Samiti to Deputy Housing Commissioner, Circle-2, Rajasthan Housing Board, Jaipur available on record at Annexure A/12 and the contents thereof reads as under: Dt. 14/03/2014 Dy. Housing Commissioner, Circle-2, Rajasthan Housing Board, Jaipur. Dear Sir, Sub: Request for allowing permission to transfer Institution Plot at Mansarovar, Jaipur to Another Educational Institution. With Reference to above, we are to submit as under: 1. That Adarsh Gyan Vidhyalaya Samiti was allotted an institutional plot opposite sector 03, Shipra Path Mansarovar, Jaipur admeasuring 4151.34 Sq. YD vide letter No. 2442 Dt. 23/09/2013 which was subsequently modified vide letter no. 307 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows such transfer subject to approval and sanction of Rajasthan Housing Board. Necessary permission has been sought from the Rajasthan Housing Board for such transfer in favour of the assessee society and the same is currently awaited and on receipt thereof, formal sale deed shall be executed in favour of the assessee society. The assessee society has already paid substantial amount of ₹ 6.73 Crores, out of total purchase consideration of ₹ 7.54 Crores in terms of agreement to sell, directly to Rajasthan Housing Board. Further, the assessee society is in effective possession of the said plot of land as it has since built a school building thereon and carrying on its educational activities and the fees so received have been reflected in its books of accounts. 52. In light of above factual matrix, as far as proximate and immediate benefit of such payment of ₹ 6.73 Crores is concerned, it is the assessee society which is benefitted whereby it has built a school building wherein it is carrying on its educational activities. At the same time, it cannot be ruled out that Adarsh Gyan Vidhalaya Samiti is not benefitted by such payment by the assessee socie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person, member, trustee or manager of the assessee society which is also not a case before us. The clause (e) talks about any concern in which any of the persons referred to in clauses (a), (b), (c), (cc) and (d) has a substantial interest. If we were to read the said clause (e) in the context of present facts, it means Adarsh Gyan Vidyalya society, being a concern in which members/trustees of the assessee society have a substantial interest. The term substantial interest in a concern has been defined in Explanation 3 to mean: ( i) in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of the other persons referred to in sub-section (3); ( ii) in the case of any other concern, if such person is entitled, or such person and one or more of the other persons referred to in sub-section (3) are entitled in the aggregate, at any ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit has flown to Adarsh Gyan Vidyalya Society, the provisions of section 13(1)(c) are not attracted in the instant case. 57. Further, we note that the ld Pr.CIT has raised an apprehension at the time of issuance of show-cause that the payment to Rajasthan Housing Board on behalf of Adarsh Gyan Vidyalya Society is neither a loan nor a donation but appears to be an investment not allowable u/s 11(5) of the Act and thereafter, towards the end of his order while giving his concluding findings has held that the payment made is in contravention of section 11(5) r/w section 13(1)(c) of the Act. However, how the payment is in contravention of section 11(5) has not been spelt out in his order. If we look at the provisions of section 11(5), in clause (x), it provides for investment in immoveable property as one of the permissible mode of investment of amount of income which is accumulated or set-apart for being not included in the total income of the person in receipt of income. In the instant case, the assessee society having entered into an agreement to sell with Adarsh Gyan Vidyalya Society and having paid a substantial amount in consideration for purchase of land and in p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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