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TMI Blog2019 (11) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 11, no addition can be made u/s 40(a)(ia) Addition u/s 68 - HELD THAT:- We find that the assessee has duly explained the transaction with Anil Nuhal and Krishna Developers which has been rightly appreciated by the ld CIT(A) and no infirmity therein has been observed by the ld CIT(A). We accordingly confirm the findings of the ld CIT(A) and the ground of the Revenue is dismissed. Addition on account of expenses claimed for investment in acquisition of fixed assets by holding that assessee trust was allowed benefit of section 11 12 - AO has denied the claim of application of income by way of capital expenditure towards acquisition of fixed assets for the reason that the assessee society was held not eligible for exemption under section 11 and 12 of the Act. However, while disposing off the aforesaid grounds of appeal, we have already held that the assessee society is eligible for exemption under section 11 and 12. Hence, the said ground of appeal becomes academic and is hereby dismissed as infructous. Accumulation or set apart to the extent of 15% by holding that assessee trust was allowed the benefit of section 11 12 - AO did not allow the accumulation or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the benefit of section 11 12 of the I.T. Act, 1961? 4. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in deleting the addition of ₹ 5,00,000/- made u/s 68 of the Act? 5. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in deleting the addition of ₹ 2,28,24,920/- on account of expenses claimed for investment in acquisition of fixed assets by holding that assessee trust was allowed the benefit of section 11 12 of the I.T. Act, 1961? 6. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in allowing accumulation or set-apart to the extent of 15% by holding that assessee trust was allowed the benefit of section 11 12 of the I.T. Act, 1961? 7. Any other question of law as deemed fit in the facts and circumstances of the case may also be framed before the Hon ble Tribunal in the interest of justice. 2. Briefly stated, the facts of the case are that the assessee society is engaged in imparting education and is running an engineering college in the name of Jaipur Institute of Technology, Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee under section 11 and 12 of the Act. 5. Per contra, the ld. AR submitted that from the provisions of the Act, it can be noted that exemption u/s 11/12 can be denied by the AO only if the conditions referred to in section 13 are not complied with. The discrepancy mentioned by the AO does not fall in any of the limb of section 13. The exemption granted u/s 12A has not been withdrawn till date. Therefore, denial of exemption u/s 11 is uncalled for. 6. It was further submitted by the ld AR that the discrepancy referred by the AO in the loan taken from Anil Kumar Nuhal is only an accounting error. The assessee has received loan of ₹ 10 lacs from Anil Kumar Nuhal and ₹ 5 lacs from his sister concern M/s Krishna Developer. However, the entire loan has been accounted for in the books in the name of Anil Kumar Nuhal. This fact is evident from the copy of bank account of assessee from which it is clearly evident that ₹ 10,00,000/- was received from Anil Kumar Nuhal and ₹ 5,00,000/- was received from M/s Krishna Developers. This fact was also stated vide letter dt. 28.12.2016 along with copy of confirmat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards the discrepancy referred by the AO in the loan taken from Anil Kumar Nuhal is concerned, I find that the same was clarified by the appellant by filing the confirmation from M/s. Krishna Developers along with their bank account vide letter dt.28.12.2016 where the balance amount of loan of ₹ 5 lakhs was;: eflected as this concern is also a family concern of Sh. And Kumar Nuhal and the Trust entered the entire amount of ₹ 15 lakhs under his name, which explanation given in the statements of Sh. Anil Kumar Nuhal also the AO has not found to be false. Considering all the above facts and circumstances, the denial of the exemption made by the AO is not found to be justified and the AO is directed to compute the income after allowing exemption u/s 11/12. This ground of appeal is treated as allowed. In the result, the ground no. 1 and 2 of the Revenue s appeal is dismissed. 8. In the Ground No. 3, the Revenue is aggrieved by the action of ld CIT(A) in deleting the addition of ₹ 25,625/- on account of non deduction of TDS by holding that assessee trust was allowed the benefit of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and added the same u/s 68 of the IT Act, 1961. 13. On appeal, the Ld. CIT(A) held that amount of ₹ 5 lacs is not a donation but loan from Krishna Developers for which confirmation and bank account was filed. The lender is assessed to tax. The AO has not found any discrepancies in the same. Accordingly, he deleted the addition of ₹ 5 lacs made by the AO. 14. In this regard, the ld. AR submitted that the assessee has received loan of ₹ 10 lacs from Anil Kumar Nuhal and ₹ 5 lacs from his sister concern M/s Krishna Developer. However, by mistake the entire loan has been accounted for in the books in the name of Anil Kumar Nuhal. In support of the same, copy of bank account of assessee and confirmation from Krishna Developers and its bank account was filed. Hence, addition made by the AO is uncalled for. 15. We have heard the rival contentions and pursued the material on record. We find that the assessee has duly explained the transaction with Anil Nuhal and Krishna Developers which has been rightly appreciated by the ld CIT(A) and no infirmity therein has been observed by the ld CIT(A). We acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or accumulation of its receipts within the prescribed threshold as provided in the Act. In this regard, we find that the assessee society has shown fees from students amounting to ₹ 7,89,58,305 and other income of ₹ 12,22,222 totalling to ₹ 8,01,80,527. Further, as regards application of income, it has claimed expenditure of ₹ 6,15,09,279 and capital expenditure of ₹ 2,28,24,920 totalling to ₹ 8,43,34,199 and thus has reported excess of expenditure over receipts by ₹ 41,53,672. Given that besides the fees receipts and other income, the assessee has shown unsecured loans of ₹ 8,85,32,180, prima facie the excess of expenditure has been met out of unsecured loans and not out of total fee and other income receipts during the year. Therefore, it needs to be examined in detail to what extent the unsecured loans have been utilised for meeting the expenditure and to what extent, fee receipts and other income have been utilised for meeting the expenditure and then determine the amount of accumulation out of total fee and other income receipts accordingly. In the result, the matter is set-aside to the file of the Assessing officer for the limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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