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TMI Blog2020 (2) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... year. 3. On the facts and circumstances of the case, the learned CIT(A) has erred in law and facts directing to allow brought forward of loss of Rs. 5,80.12.138/- without considering the facts that assessee is registered u/s 12AA of the I.T. Act, and the provision of section 11/12 A A of the l.T. Act. does not allow carrying forward of excess application to subsequent year(s). 4. Appellant craves leave to modify/ amend or add any one or more grounds of appeal. 2. The brief fact of the case are that the assessee filed income tax return on 05.10.2012 declaring Nil income. The case was selected for scrutiny and statutory notice under Section 143(2) of the Income-tax Act, 1961 (in short 'the Act') was issued. During the course of assessment proceedings, from the perusal of the details filed by the assessee, the Assessing Officer found that the assessee had made investment in purchase of land and flats amounting to Rs. 13,80,840/- and Rs. 1,03,86,970/- and had also given advance of Rs. 42,94,237/- for flat. The assessee was asked by the Assessing Officer to explain the investment made of Rs. 1,17,67,810/- in purchase of land and advance made of Rs. 42,94,237/- for purchase of flat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue might be dismissed. 3.3 We have heard the rival submissions of the parties and perused the relevant material available on record. In the year under consideration also, the assessee has made investment in land and advances for construction towards corpus donations. The learned CIT(A) has accordingly after considering the submissions of the assessee, allowed the appeal of the assessee by observing as under: "I agree with the contentions of the assessee for the impugned year that the investment is made towards purchase of land and flats to make appropriate compliance with UP Private Universities Act, 2010 which requires a minimum of 50 acres of land for establishing a university. I also find that the trustees of the assessee trust were also a part of the city Educational and Social Welfare Society which is already running several educational institution and vide a court order in misc. case number 87 of 2007, the Hon'ble Court of Additional District Judge, Court No. 2, Meerut has vide order dated 05.03.2008 ordered transfer of properties and institutions from City Educational and Social Welfare Society to the assessee trust which affirms the intention of the assessee to esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no necessity for the assessee to prove that it was done so for charitable purposes. Section 11(5) provides that accumulated amount u/s 11(2) has to be kept in specified moods of investment which include investment in immovable property. It does not provide such immovable property must be meant for any specific purposes. Therefore, there is nothing wrong committed by assessee so as to violate any provisions of law. The identical issue was considered and decided by ITAT Delhi 'G' Bench in the case of M/s The Scientific & Educational Advancement Society (supra) in which in para 13 it was held as under: "13. We have heard the Ld. Representatives of both the parties and perused the material available one record. The Ld.CIT(A) recorded in the order that land at Dhokra was purchased by the assessee-society in the years 2001 and 2003. It was sold for a consideration of Rs. 9.11 crores in AY 2007-08 which resulted into profit/income at Rs. 8.44 crores which was claimed as exempt u/s 11(1 A) of the I.T. Act, 1961, in AY 2007-08. The assessee-society also filed Form-10 along with return of income in which income to the extent of Rs. 7,22,67,210/ - was set apart for utilization ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 is filed at page-146 of the paper book and copy of the resolution of assessee- society is filed at page-147 of the paper book and contention of assessee-society has been accepted by Ld. CIT(A) in A.Y. 2007-2008 above and his view have been confirmed by the Tribunal. It is also not in dispute that assessee-society purchased lands at Sadhrana, Gopalpura and Lohari aggregating to Rs. 7,20,56,368/-. Therefore, short fall of Rs. 2,10,842/- is the income remaining to be applied to five years period allowed under section 11 (2) which has not been expired in assessment year under appeal i.e., A.Y. 2008- 2009. Therefore, this amount also cannot be brought to tax. Since the assessee- society purchased the lands for a sum of Rs. 7.20 crores for educational purposes, therefore, there is nothing wrong in the explanation of assessee-society. The Ld. CIT(A) already found that land at Sadhama have been used for educational purposes. The remaining two properties at Gopalpura and Lohari cannot be treated as not for charitable purposes merely for the reasons that these have not been used. Non-user or passiveness of the lands purchased cannot be treated as user for non-charitable purposes. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable to the case of the assessee- society. The decisions relied upon by the Ld. D.R. are not applicable to the facts of the case. In view of the above discussion, we set aside the Order of the Ld. CIT(A) and delete the addition of Rs. 6,77,16,875/-. Accordingly, appeal of the assessee-society is allowed. " 10. Following the above order of the Tribunal, we do not find any justification to interfere with the order of the Ld. CIT(A). We may also note that assessee has explained that out of the addition in question as made by AO, the amount of Rs. 2,25,50,000/- was in fact towards corpus donation. The assessee produced confirmation and bank account and relevant details to prove it was a corpus donation. Therefore, it could not be added to the income of the assessee. The Ld. CIT(A) correctly directed to delete the addition. The Revenue did not challenge the deletion of addition on account of corpus donation. Therefore, findings of fact recorded by Ld. CIT(A) are confirmed. If the corpus donation is excluded nothing would survive against the assessee so as to make any addition. In this view of the matter, there is no merit in Departmental appeal. Same is accordingly dismissed." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the rival submissions, we do not find any justification for Ld. CIT(A) to reject the claim of assessee. Ld. Counsel for assessee rightly contended that the authorities below have failed to appreciate that income has to be computed commercially even in cases covered u/s 11-13 of the Act and resultant loss, if any, arising due to surplus application of income has to be computed and carry forward to the next year to be set off therein. The AO has not given any findings on the same. The Ld. CIT(A) without examining the issue in detail dismissed the claim of assessee because section 11 provides for exemption of income of charitable organization. However, it is a fact that assessee claimed carry forward of the losses for subsequent year as per law which should have been appreciated and should be considered in favour of the assessee. This issue is covered by above judgment referred above. We, accordingly, set aside the orders of the CIT(A) and restore this issue to the file of the AO with direction to allow the claim of assessee after verifying the facts on record. The AO shall give reasonable sufficient opportunity of being heard to the assessee. In the result, Cross Objection of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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