9911796707
TMI Blog2023 (12) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... The revenue has taken the following grounds which are reproduced as below: "1) On the facts and the circumstances of the case and in law the Ld. CIT (Appeals) has erred in treating receipts of earmarked funds amounting to Rs. 7,43,95,029/- as corpus donation and allowed exemption u/s 11(1)(d) even there were no specific directions from donor for such receipts of corpus donation. 2) On the facts and the circumstances of the case and in law the Ld. CIT (Appeals) has erred in allowing benefit u/s 11(1)(d) which is not applicable once the exemption u/s 11 is denied. 3) On the facts and the circumstances of the case and in law the Ld. CIT (Appeals) has erred in directing to allow exemption u/s 11 of the Act without appreciating the fact that assessee did not qualify for exemption u/s 11 of the Act. 4) 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." 4. Brief fact of the case is that the assessee is a trust and registered U/s 12A of the Act and running the hospital, dispensary and clinic in Udaipur. The founder of the trust is Dr. Kirti Kumar Jain who is also the tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the exemption u/s 11(1)(d) of the Act. In argument, the ld. DR mentioned that the amount received from 'DKJFFI'. The confirmation for contribution was sent by 'DKJFFI'. The funds shall be used only for the purposes of acquisition construction running of hospital/dispensary, clinic and for repayment of any loan taken for the above purposes. But primarily the argument of the assessee was not accepted for the approval for the donor, later, the assessee submitted two submissions on dated 06.01.2014 and 18.01.2014 where the confirmation was signed by Dr. Kirti Jain as donor. It is also mentioned that the entire repayment of loan is not accepted, so, violation of section 11(1)(d) the corpus funds correctly added back with the total income of the assessee. The ld. DR fully relied on the order of the assessing authority. 6. The ld. AR first vehemently argued and relied on the appeal order, the relevant page 16 to 18 which are reproduced as below: "(b) Whether the donation of Rs. 7,43,95,029/- is a corpus donation within the meaning of section 11(1)(d) of the Act. 11.1 The AO has held that the donation of Rs 7,43,95.029.'- was not a corpus donation for the following reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r purchase of land for building a hospital but pending FCRA approval the assessee had taken loan from bank for making payment to UIT towards land allotted to the assessee trust for construction of hospital building. However, construction could not be undertaken as there was a stay on construction on the said land by the Hon Rajasthan High Court. It was further submitted that on receipt of the donation, it was utilized to repay the loan. It was submitted that purchase of land was the primary step for construction of hospital and after obtaining permission under FCRA the fund was utilized for repayment of loan, therefore it was incorrect to say that funds were utilized for repayment of loan and not purchase of land. The assessee submitted that repayment of loan was permissible under FCRA The assessee submitted that in its reports under the FCRA the assessee had duly disclosed the fact of repayment of loan taken for purchase of land for construction of medi health multiplexes. Alternatively, it was submitted that even if the fund received is treated as part of total income the same has been utilized for repayment of loan which is application of income as decided in various case laws. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. DR further relied on the assessment order, the relevant part of the assessment order is duly reproduced as below: "4.16 The reply filed by the assessee has been considered. The assessee itself admitted that Registration of Trust u/s 12A does not automatically make it eligible for claiming exemption u/s 11, and in order to claim exemption, the assessee trust is required to fulfil certain set of conditions for accumulation and application of money. By knowing the facts, the assessee planned a colourful device to get the income exempted on the basis of claim of money. By knowing the facts, the assessee planned a colourful device to get the income exempted on the basis of claim of expenditures by producing various activities towards its related person /part}'. However, the assessee could not be able to prove these activities. The activities of the trust as mentioned through description slips on letterhead of GBH American Hospital do not lead to benefit of public. Let us have a look over the description slips which itself gives a clear picture of what kind of charity was carried out by the assessee under the roof of GBH American Hospital. During the assessment proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtinent to mention here that 'Administrative &Genefal expenses' and 'Finance Charges' arc neither directly nor proximately related to charitable purpose nor are these expenditures directed to achieving the objectives of charity. It is the net income, after deducting these expenses, is available in the hands of the assessee trust for charitable activity, These expenses are directly related to earning income and are deductible from gross receipt as expenses under normal commercial principle. These are expenses attributable to earning income and riot application of income u/s 11. All applications are undoubtedly expenses but all expenses are not application of income." 9. Per contra, the ld. AR further relied that due to the delay of entire processing for foundation of hospital, the activities of the trust was through GBH for benefit of the public. The ld. AR relied on the appeal order, the relevant pages 18 to 19 which are reproduced as below: "11.4.2 As regards the AO's observations regarding violations of FCRA provisions, I have gone through the report in form FO6 submitted by the assessee for the Y.E. 31.032014 and find that in the accompanying activity repo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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