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TMI Blog2019 (5) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ditworthiness of the persons who had given the donation and in the absence of the assessee having filed bank pass-book - HELD THAT:- We find that the assessee had furnished complete list of donors including the names, addresses and PAN numbers of the donors. The list, as noted above, demonstrates that most of the donors have given amounts of ₹ 10,000/- and the list contains the names, addresses and also the mode of payment as to whether cheque or cash. Assessee on its own had added back the amount of ₹ 28,80,000/- in its income which is evident from the copy of computation sheet and after inclusion of such amount in the income the assessee has applied the same for the charitable purposes . CIT(A) has categorically mentioned this fact in his order. Therefore, we do not find any infirmity in the findings of learned CIT(A).- Decided against revenue Addition u/s 68 - addition made by holding that the assessee had not produced copy of income tax return and bank statement of the donors - HELD THAT:- It will not be out of place here to mention that Mr. Avnish Kumar was the trustee, and chairman of the society who used to appear before the AO. How is that the AO was not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Appellant : Shri A. K. Bar, CIT (DR) For the Respondent : Shri K. R. Rastogi, F.C.A., Shri Shubham Rastogi, F.C.A. ORDER PER T. S. KAPOOR, A.M. This is an appeal filed by the Revenue against the order of learned CIT(A), dated 30/05/2017 pertaining to assessment year 2013-2014. In this appeal the Revenue has raised the following grounds of appeal: 1. Learned Commissioner of Income Tax (A) has erred in law and facts by allowing the benefit of section 11 thereby deleting the addition of surplus of ₹ 2,28,47,433/- ignoring the fact that the assessee charged ₹ 57,75,900/- in the form of Book Bank Fees, Dress Charges Examination Fee and Miscellaneous Fees beyond the prescribed amount of fees as decided by the Govt. Authorities, which clearly indicates that the objects of the assessee are not charitable. 2. Ld. Commissioner of Income Tax (A) has erred in law and facts in deleting the addition/disallowance of ₹ 28,80,000/- ignoring the fact that the assessee cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee having filed bank pass-book and copies of acknowledgement of income tax return of the donor, the Assessing Officer had rightly made the addition as unexplained cash credit u/s 68 of the Act and which learned CIT(A) has wrongly allowed. 2.2 Arguing ground No. 3 Learned D. R. submitted that assessee had received various amounts from various persons and on an explanation sought by the Assessing Officer regarding genuineness of transactions and creditworthiness of the persons, the assessee had failed to prove the same and therefore, the Assessing Officer had rightly made addition u/s 68 and which the learned CIT(A) has wrongly allowed. 2.3 Arguing ground No. 4 Learned D. R. submitted that assessee had debited an amount of ₹ 62,61,703/- under the head help to poor students and Assessing Officer had observed that most of the entries were journal entries and in the case of cash payment the evidence could not be verified as in some cases the names of the students were not mentioned and therefore, the Assessing Officer had rightly made the addition of ₹ 62,61,703/- and learned CIT(A) has wrongly allowed relief to the assessee to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. 3.1 Arguing ground No. 2 regarding addition of ₹ 28,80,000/- u/s 68 of the Act, Learned A. R. submitted that during assessment proceedings all the details of the donors along with their address and PAN were submitted to the Assessing Officer and in this respect our attention was invited to pages 81 82 of the paper book where the details of names, PAN, address were placed. It was submitted that the requirement of the Assessing Officer to produce bank passbook, copies of acknowledgement of income tax return along with the computation of income was not justified as the assessee had received donations of small amounts and major of the donations were of ₹ 10,000/- which is apparent from the list of donors placed at pages 81 82 of the paper book. It was further submitted that the complete address alongwith PAN of the donors was also furnished and therefore, the learned CIT(A) has rightly deleted the addition. 3.2 Arguing ground No. 3 for the addition of ₹ 2,11,95,398/- u/s 68 of the Act, Learned A. R. submitted that the assessee had received unsecured loans from five persons which were already depositors with the assessee as is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the paper book where copy of account of K. Lounge Tailors was placed. It was submitted that learned CIT(A) has rightly deleted the disallowance. It was further argued that without prejudice even if this disallowance is made the taxable income of the assessee being exempt u/s 11 will not have any revenue effect. 4. We have heard the rival parties and have gone through the material placed on record. We find that Assessing Officer disallowed the claim of the assessee u/s 11 of the Act by holding that the assessee had received book bank fees, dress charges, examination fee and misc. fees amounting to ₹ 57,75,900/- which was in the form of capitation fee. However, we find that these charges were charged to the students as the assessee had provided extra facilities like providing dress to the students. The examination fee charged by the assessee was deposited with the UPTU who is engaged in conducting exams. The learned CIT(A) has held that in the earlier years under similar circumstances the Assessing Officer had not made any addition. The assessee, before learned CIT(A), has also filed fee fixation committee letter. It was further submitted to him that the charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was beyond the prescribed amount of fees decided by the Government authorities. However, ld. CIT(A) allowed relief to assessee by holding as under:- On perusal of the details filed and those available on records, it is seen that the assess.ee trust has been charging tuition fees as per the norms set by the UPTU. The assessee trust has also charged additional fees/charges for specific purposes, like examinations, lab fees etc. These are not illegal receipts nor has the UPTU barred the appellant form these additional charges, as the monetary cap is only on tuition fees. In any case, such additional receipts are deminimis and are collected for specific purposes. The decision of the Hon'ble Supreme Court in the case of Unikrishnan, JP Others which has been cited by the A.O. in his order, deals with the receipt of Capitation Fees. In this case, admittedly, there is no capitation fees, thus, the said decision of the Hon'ble Supreme Court is not at all applicable to the instant case. These fees/ charges, collected in addition to the tuition fees, were fully recorded and accounted funds and these have been spent for the purposes/ objects of the trust. Even as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Assessing Officer had made this addition on account of unsecured loans from five persons, detailed as under: 1. Mr Avnish Kumar, Najibabad Rs.40,00,000 2. Mr Naresh Kumar Rs.40,00,000 3. Mr Ikrar Ahmad, Najibabad Rs.85,55,826 4. Mr Nitin Gupta, Mumbai Rs.26,34,572 5. Shri Ganga Khandsari Udyog Rs.20,05,000 6.1 The Assessing Officer wanted the assessee to provide copy of acknowledgement of income tax return, computation of income and other documentary evidence to prove the genuineness of transactions and creditworthiness of the parties. The Assessing Officer noted that assessee had not provided these details and therefore, he made addition u/s 68 of the Act. Before us, Learned A. R. invited our attention to the copy of account of Avnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The A.O. seemed to have ignored these facts. These documents must have been available to the AO also as these are bank and IT records and are handmade. It is not understood as to how and why the AO could completely disregard such evidences. There was no application of mind, enthusiasm to prove found in his order. He made the addition mechanically without any evidence to support his order. Similarly Mr Ikrar Ahmad and Sri Nitih Gupta, Mumbai had given the loan to the trust by cheques having sufficient balance in their accounts. Interests were also paid to them. The appellant has relied on the following case laws: 1. [2013] 38 taxmann.com 239 (Allahabad)/218 taxman 157, HIGH COURT OF ALLAHABAD Commissioner of Income-tax -1 vs. Kapoor Chandl Mangesh Chand. Copy of the same is at page__75 ___of the case law index. Section 68 of the Income-tax Act, 1961 - Cash credit [Burden of proof], -Loan was advanced and repaid through account payee cheques - PAN number of offenders were furnished - Lenders had sufficient funds in their bank accounts and cash was not deposited on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined the ledger account where in an expense of ₹ 62,61,703/- have been shown as help to poor students. Most of the entries are journal entries and the students have been credited with certain amounts such as tuition fees, examination fees, misc/internet fees etc. Each one of them have the details of name, father's name and the course name etc. The total amount was ₹ 58,22,900/-. Since these are journal entries and the students who were poor, were credited with various fees without bringing evidences to the contrary, the AO should not have disallowed the expenses. However, there were certain payments in cash to various other students on several dates amounting to a total of ₹ 4,38,803/- This amount were paid in cash of different persons as prize money, some of them were not the student of the institute when a competition need in the institute. Obviously there is no way to examine this expenditure whether they had actually been incurred or not. I therefore confirm the addition made on this ground. The appellant gets relief to the extent of the balance amount. 7.1 The above findings of learned CIT(A) are quite exhaustive and are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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