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TMI Blog2019 (6) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon ble Supreme court in the case of CIT Vs. Alom Extrusions [ 2009 (11) TMI 27 - SUPREME COURT] and various other decisions payments made prior to due date of filing of return as prescribed u/s. 139 (1) cannot be disallowed u/s. 36 (1) (va) r.w.s. 2 (24) (x). Since in the instant case admittedly the deposits towards EPF has been deposited prior to the due date of filing of return u/s. 139 (1) therefore, following the consistent view of the coordinate benches of the Tribunal no disallowance u/s. 36 (1) (va) r.w.s. 2 (24) (x) can be made. The ground raised by the assessee is accordingly allowed. Benefit of deemed application on account of interest accrued but not received under clause 2 of explanation to section 11 (1) - HELD THAT:- The amount of accrued interest of FDR is the income derived during the impugned assessment years but not received shall be treated as deemed to be applied. I find merit in the above arguments of the assessee. A perusal of the computation of income for the A.Y.2013-14 shows that the net surplus of 73,93,794/- includes the income of 2,81,769/- which has not actually been received. The assessee in its form No.10B in clause No.2 of annexure conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case." 3. The facts of the, case in brief, are that the assessee is a society and is registered with the Registrar of Society, U. P, under Society Registration Act. The assessee society has been granted registration u/s 12 AA of the IT Act by the CIT, Meerut vide order dated 28.05.2009. It filed its return of income on 06.11.2013 declaring nil income. The AO during the assessment proceedings observed that assesee has debited development fees of ₹ 20,00,000/- to the income and expenditure account. He, therefore, asked the assessee to explain the nature of payment of development fees of ₹ 20,00,000/- and also furnish the copy of agreement entered into and furnish the details of last five years. The assessee filed the requisite details alongwith a copy of letter dated 02.02.2016 by Agra Diocesan Trust Association (ADTA in short) a company registered u/s 25 of Company Act 1956 u/s 8 of the company Act 2013 registered u/s 12A of the IT Act and is parent body of Diocese of Agra and its all institutions. The Diocese of Agra managing properties of many colleges, Junior Colleges, Schools, Hospitals, Churches and chapels. This includes Hindi Mediu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of appellate proceedings it has been argued that the above said donation or contribution should be allowed as it is for the same purposes as that of appellant and placed reliance on CIT vs Thanthi Trust (SC) (1999) 239 ITR 502, CIT vs Shri Aurobindo Memorial Funds Society Madras 162 CTR 254, CIT vs Shri Ram Memorial Foundation (Del.) (2004) 140 Taxman 263, CIT vs H.P.S. Social Social Welfare Foundation (Del.) (2011) 198 Taxman 63. It is noted that neither during appellate proceedings nor during assessment proceedings appellant could prove that objective of ADTA is same as that of appellant and the donation is towards corpus of the ADTA. The memorandum of association of ADTA reveals that ADTA works for furtherance of religious and charitable work of church of North India and in management of property etc. Thus case laws relied upon by the appellant are not applicable to the facts and circumstances of appellant's case. Keeping in view above facts the donation given by appellant to ADTA cannot be treated application of income within the provisions of section 11. Thus this ground of appeal is dismissed." 6. Aggrieved with such order of the CIT(A), the assessee is in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Bhai Trust No.2 reported 172 ITR 698. 9. The Ld. DR on the other hand heavily relied on the order of the Assessing Officer and CIT(A). 10. I have considered the rival arguments made by both the sides and perused the orders of the lower authorities. I find the Assessing Officer rejected the claim of development fees of ₹ 20 lacs paid to ADTA as application of income on the ground that the money has been siphoned off every year and further there is no such agreement between the assessee and ADTA. I find the Ld. CIT(A) upheld the action of the Assessing Officer which has been reproduced in the preceding paragraph. It is the submission of the Ld. Counsel for the assessee that the assessee is paying such development fees to ADTA since last so many years and the Assessing Officer in the past as well as subsequent years has accepted such expenditure as application of income in the orders passed u/s 143 (3). Further it is also his submission that donations are never made with prior agreement and it is governed by the will/ capabilities of the donor. I find merit in the above arguments of the Ld. Counsel for the assessee. As mentioned earlier the Assessing Officer in the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of the return, however, they were paid after the due date prescribed under the EPF Act. It is the submission of the Ld. Counsel for the asseessee that in view of the decision of Hon'ble Supreme court in the case of CIT Vs. Alom Extrusions reported in 319 ITR 306 and various other decisions payments made prior to due date of filing of return as prescribed u/s. 139 (1) cannot be disallowed u/s. 36 (1) (va) r.w.s. 2 (24) (x). Since in the instant case admittedly the deposits towards EPF has been deposited prior to the due date of filing of return u/s. 139 (1) therefore, following the consistent view of the coordinate benches of the Tribunal I am of the considered opinion that no disallowance u/s. 36 (1) (va) r.w.s. 2 (24) (x) can be made. The ground raised by the assessee is accordingly allowed. 13. Ground No.4 of the appeal reads as under :- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not allowing the benefit of deemed application of ₹ 2,81,769/- on account of interest accrued but not received under clause 2 of explanation to section 11 (1) of Income Tax Act, 1961. 14. After hearing both the sides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation ought to have been deducted from the amount of income. 17. Referring to the decision of Hon'ble Supreme Court in the case of NTPC Limited Vs. CIT reported in 229 ITR 383 and the decision in the case of Singhad Technical Education Society reported in 397 ITR 344, he submitted that since the above grounds do not require fresh facts to be investigated and go to the root of the matter, therefore, the same should be admitted. 18. After hearing both the sides and considering the fact that no fresh facts are required to be investigated, the additional grounds raised by the assessee are allowed. 19. The facts of the case, in brief are that the Assessing Officer did not allow depreciation of 18,38,087/- being the depreciation claimed for the year as application of income. Although this ground has not been raised before the CIT(A), however in view of the additional grounds raised by the assessee which has been admitted, we proceed to adjudicate the same. The Hon'ble Supreme Court in the case of CIT Vs. Rajasthan & Gujarati Charitable Foundation Poona reported in 402 ITR 441 has held that income of trust was required to be computed u/s 11 on commercial principles after prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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