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TMI Blog2021 (4) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... and ground No. 1 of the appeal of the Revenue are accordingly dismissed. Addition of transfer to infrastructure development funds - claim of the Revenue is that amount has not been considered for application of funds and therefore this issue might be restored back to the file of the Assessing Officer as decided in the case of Khurja Development Authority - HELD THAT:- Exemption under section 11 is allowed, if 85% of the funds received are applied for charitable purposes in the year under consideration and, if there is any short fall in application of such funds, the assessee has to follow the procedure prescribed for getting benefit of section 11 CIT(A) has noted that the assessee had produced before him prescribed form as laid down in the Rules, with the request for carry forward of the amount for utilization in subsequent years and, thus, has fulfilled the requirement as prescribed in Explanation I to Section 11 of the Act. Before us, the learned DR failed to controvert this finding of the Learned CIT(A). In our opinion, in the instant case before us, the assessee has fulfilled the requirement of law and we do not find any reason for restoring the matter to the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the motive for profit and thus the assessee was not entitled for exemption under section 11 of the Act. He, accordingly, assessed the surplus of ₹ 6,35,39,809/- as income from business. Further, he also observed that ₹ 23,36,84,304/- received for infrastructure fund , was directly credited to a separate account of fund, without crediting the same towards income of the assessee. Therefore, the Assessing Officer also added this amount to the total income. Further, the Assessing Officer also made addition of ₹ 10,34,026/- by way of making disallowance for depreciation. 3.1 Aggrieved with the addition/disallowances made, the assessee filed appeal before the Learned CIT(A) who allowed the appeal of the assessee. Aggrieved with the finding of the Ld. CIT(A), the Revenue is in appeal before the Income Tax Appellate Tribunal (in short the Tribunal ) raising the grounds and additional ground as reproduced above. 4. Before us, the parties appeared through Video Conferencing facility and the learned counsel of the assessee filed a paperbook. 5. The Learned DR relied on the order of the Assessing Officer and submitted that order of the Tribunal in the case of Kh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaken. Since the appellant enjoys benefit of registration u/s 12AA, it can be presumed that the objects of the appellant are of charitable character. In view of the above, as the activities in the relevant previous year are similar to the activities undertaken during the previous year relevant to A.Y. 2012-13, it is prudent to hold that the appellant is engaged in the activities which are of charitable nature. Therefore, the appellant would be entitled to get the benefit of registration u/s 12AA. As such, in the assessment, the Assessing Officer s only is to see whether the actual activities undertaken during the year are in accordance with the objects with regard to which the authority was granted registration u/s. 12 AA. There is no finding in the assessment order that the appellant authority has deviated from its charitable objects during the course of the activities performed during the relevant previous year. Since the appellant is registered u/s. 12 AA, it is automatically entitled for exemption u/s. 11 if other conditions are fulfilled. Since the appellant s application of income plus accumulation of income for charitable purposes is more than the 85% of the total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ₹ 33,37,97,968/- out of which ₹ 12,95,28,302/- has been utilized during the relevant previous year. In accordance with the provisions of section 11, 85% of the total receipts i.e. ₹ 28,37,28,272/- should have been utilized during the year. Thus, there is a shortfall of ₹ 15,41,99,970/-. The appellant has produced a copy of form-10 filed on 30.09.2014 which shows that an amount of ₹ 15,41,99,970/- has been requested to be carried forward for utilization in subsequent years. Thus, all the requirements for claiming exemption u/s 11 have been fulfilled. 'Also, it is observed that the income received towards the infrastructure development fund has been considered for working out the utilization u/s 11. Hence, the AO s conclusion that the income received under infrastructure development fund has not been considered is without any basis. In view of the above, there is no justification for making any separate addition for the amount received towards infrastructure development fund and the AO is being directed accordingly. These grounds are therefore allowed. 8.1 The claim of the Revenue is that amount of ₹ 23,36,84,304/- has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d are applied for charitable purposes in the year under consideration and, if there is any short fall in application of such funds, the assessee has to follow the procedure prescribed for getting benefit of section 11 of the Act. The relevant Explanation-1 below section 11(1)(d) is reproduced as under: Income from property held for charitable or religious purposes. 11. (1) Explanation 1.-For the purposes of clauses (a) and (b),- (1) in computing the fifteen per cent of the income which may be accumulated or set apart, any such voluntary contributions as are referred to in section 12 shall be deemed to be part of the income; (2) if, in the previous year, the income applied to charitable or religious purposes in India falls short of eighty-five per cent of the income derived during that year from property held under trust, or, as the case may be, held under trust in part, by any amount- (i) for the reason that the whole or any part of the income has not been received during that year, or (ii) for any other reason, then- (a) in the case referred to in sub-clause (i), so much of the income applied to such purposes in India during th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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