Prem Daan Sansthan, New Delhi v. DDIT (E), New Delhi

ITA 2199/DEL/2012 | 2008-2009
Pronouncement Date: 31-07-2013 | Result: Allowed

Appeal Details

RSA Number 219920114 RSA 2012
Assessee PAN AAATP8873G
Bench Delhi
Appeal Number ITA 2199/DEL/2012
Duration Of Justice 1 year(s) 2 month(s) 23 day(s)
Appellant Prem Daan Sansthan, New Delhi
Respondent DDIT (E), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 31-07-2013
Date Of Final Hearing 04-06-2013
Next Hearing Date 04-06-2013
Assessment Year 2008-2009
Appeal Filed On 08-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) SHRI R.P. TOLANI JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.2198/DEL/2012 (ASSESSMENT YEAR : 2006-07) ITA NO.2199/DEL/2012 (ASSESSMENT YEAR : 2008-09) PREM DAAN SANSTHAN VS. ADIT (E) INV. CIRCLE II 71 SECTOR 3 POCKET 1 & 2 NEW DELHI. DWARKA NEW DELHI 110 078. (PAN : AAATP8873G) ITA NO.2487/DEL/2012 (ASSESSMENT YEAR : 2008-09) ADIT (E) INV. CIRCLE II VS. PREM DAAN SANSTHAN NEW DELHI. 71 SECTOR 3 POCKET 1 & 2 DWARKA NEW DELHI 110 078. (PAN : AAATP8873G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH ADVOCATE REVENUE BY : MS. VIBHA BHALLA CIT DR ORDER PER B.C. MEENA ACCOUNTANT MEMBER : ITA NO.2198/DEL/2012 THE APPEAL BEING ITA NO.2198/DEL/2012 FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT (APPEALS)-XXI NEW D ELHI DATED 29.03.2012 FOR THE ASSESSMENT YEAR 2006-07. ITA NO.2198 2199 & 2487/DEL/2012 2 2. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE A T NIL AND THE ASSESSMENT WAS FINALIZED AT AN INCOME OF RS.99 24 160/-. THE A SSESSEE IS A CHARITABLE TRUST ESTABLISHED ON 30.05.2004 AND WAS ALSO REGIST ERED U/S 12A OF THE INCOME-TAX ACT 1961 W.E.F. 30.05.2004 VIDE ORDER O F DIT (EXEMPTION) DATED 15.03.2005 PLACED AT PAGE 23 OF PAPER BOOK AND GRAN TED EXEMPTION U/S 80G OF THE ACT. SHRI YASH PAL CHABRA S/O LATE SHRI HAN S RAJ CHABRA WHO WAS THE RESIDENT OF USA WAS RESIDING IN INDIA AT 42-B VIKR ANT ENCLAVE MAYAPURI NEW DELHI WAS THE SETTLER OF THE TRUST AS EVIDENT F ROM THE TRUST DEED DATED 30.08.2004 PLACED AT PAGES 14 TO 21 OF PAPER BOOK. SHRI RAKESH CHABRA S/O SHRI YASH PAL CHABRA SHRI RAM GANDHI S/O OF LATE SHRI JAGAN NATH GANDHI AND SHRI PRASHANT BHALLA S/O MR. RAVINDRA NATH BHA LLA WERE THE INITIAL TRUSTEE OF THE ASSESSEE TRUST. SHRI YASH PAL CHABRA ALSO BECAME TRUSTEE OF THE TRUST. THE ASSESSING OFFICER MADE AN ADDITION OF RS .72 04 404/- TO THE ASSESSEE TRUST INCOME OF THE ASSESSEE. IT WAS CORPU S DONATION FROM YASH PAL CHABRA SETTLER AND TRUSTEE OF THE ASSESSEE. SHRI Y ASH PAL CHABRA WAS THE DONOR OF THIS CORPUS DONATION. ASSESSING OFFICER AS KED TO PRODUCE THE DONOR SHRI CHABRA BUT SHRI YASH PAL CHABRA WAS OUT OF IND IA AND HE COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. ASSESSING OF FICER ALSO ASKED FOR THE FILING OF THE DOCUMENTARY SUPPORT IN SUPPORT OF THE CREDIT ENTRIES OF THIS DONATION IN THE BOOKS OF ACCOUNT OF ASSESSEE. THE A SSESSING OFFICER HELD THAT ASSESSEE HAS NOT GIVEN SATISFACTORY EXPLANATION REG ARDING THIS CORPUS DONATION ITA NO.2198 2199 & 2487/DEL/2012 3 OF RS.72 04 404/- SHOWN AS RECEIVED FROM SHRI YASH PAL CHABRA AND MADE THE ADDITION. BEFORE THE CIT (A) THE ASSESSEE PRODUCED THE ADDITIONAL EVIDENCES IN SUPPORT OF THIS CORPUS DONATION. THE CIT (A) DID NOT ADMIT THE ADDITIONAL EVIDENCE AND CONFIRMED THE ADDITION. NOW THE ASSES SEE IS IN APPEAL BEFORE US BY TAKING THE FOLLOWING GROUNDS :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN- (I) CONFIRMING AN ADDITION OF RS. 72 04 404/- ON A CCOUNT OF CORPUS DONATION TREATING THE SAME AS OTHERWISE TAXA BLE U/S 68 OF THE INCOME-TAX ACT 1961; (II) IN NOT ADMITTING ADDITIONAL EVIDENCE SUBMITTE D AT THE TIME OF HEARING THEREBY DENYING THE APPELLANT THE D UE PROPER AND ADEQUATE OPPORTUNITY OF PROVING ITS CLAI M. BOTH THE ABOVE ACTIONS BEING MISCONCEIVED ERRONEOU S AND UNJUST MUST BE QUASHED WITH DIRECTIONS FOR RELIEF. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE THE LD . AR SUBMITTED THAT THE AMOUNT OF RS.72 04 404/- RECEIVED THIS DONATION TOW ARDS CORPUS FUND FROM SHRI YASH PAL CHABRA. SHRI CHABRA WAS A NON-RESIDEN T INDIAN AND ALSO THE SETTLER AND A TRUSTEE OF ASSESSEE. LD. AR SUBMITTED THAT THE ASSESSING OFFICER DREW HIS OWN CONCLUSION WITHOUT APPRECIATING THE DO CUMENTS FILED BEFORE HIM AND APPLIED THE PROVISIONS OF SECTION 68 OF THE INC OME-TAX ACT. LD. AR SUBMITTED THAT SECTION 2(24) OF THE ACT DEFINES THE INCOME AND CLAUSE (IIA) READS AS UNDER :- ITA NO.2198 2199 & 2487/DEL/2012 4 '2(24) INCOME INCLUDES - . [(IIA) VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR B Y AN INSTITUTION ESTABLISHED WHOLLY OR PARTLY FOR SUCH PURPOSES [OR BY AN ASSOCIATION OR INSTITUTION REFERRED TO IN CLAUSE (2 1) OR CLAUSE (23) OR BY A FUND OR TRUST 0-1' INSTITUTION REFERRED TO IN SUB-CLAUSE (IV) OR SUB-CLAUSE (V) [OR BY ANY UNIVERSITY OR OTHER ED UCATIONAL INSTITUTION REFERRED TO IN SUB-CLAUSE (IIIAD) OR SU B-CLAUSE (VI) OR BY ANY HOSPITAL OR OTHER INSTITUTION REFERRED TO IN SUB-CLAUSE (IIIAE) OR SUB-CLAUSE (VIA)] OF CLAUSE (23C) OF SEC TION 10 [OR BY AN ELECTORAL TRUST]).' THE PROVISIONS OF SECTION 11(1)(D) OF THE ACT READS AS UNDER :- '11. (1) SUBJECT TO THE PROVISIONS OF SECTIONS 60 TO 63 THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE I NCOME [(D) INCOME IN THE FORM OF VOLUNTARY CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF T HE CORPUS OF THE TRUST OR INSTITUTION.] LD. AR ALSO DREW OUR ATTENTION TO THE PROVISIONS OF SECTION 68 OF THE ACT WHICH IS REPRODUCED BELOW :- '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION O F THE [ASSESSING] OFFICER. SATISFACTORY THE SUM SO CREDI TED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. LD. AR PLEADED THAT A GENERAL READING OF THESE THRE E PROVISIONS OF INCOME-TAX ACT 1961 CLEARLY SHOWS THAT PROVISIONS OF SECTION 68 OF THE ACT ARE NOT APPLICABLE IN THE CASE OF VOLUNTARY DONATIONS RECEI VED BY ANY TRUST FOR ITS CORPUS FUND AS DONATIONS RECEIVED IS ALREADY AN INC OME AS PER THE PROVISIONS ITA NO.2198 2199 & 2487/DEL/2012 5 OF SECTION 2(24)(IIA) OF THE ACT AND SUCH DONATIONS ARE EXEMPTED U/S 11(1)(D) OF THE ACT. THE ASSESSEE HAS ALREADY INCLUDED THIS AMOUNT FOR TAXATION PURPOSE BUT SUCH DONATIONS ARE EXEMPTED IN VIEW OF THE PROV ISIONS OF SECTION 11(1)(D) OF THE ACT. LD. AR FURTHER SUBMITTED THAT THE NAME AND ADDRESS OF THE DONOR SHRI YASH PAL CHABRA ALONG WITH HIS PASSPORT WERE F ILED BEFORE THE ASSESSING OFFICER. THE DATE OF RECEIPTS CHEQUE NUMBER ALONG WITH THE BANK STATEMENT ITR AND PERMANENT ACCOUNT NUMBER OF THE DONOR AND C ONFIRMATION FROM THE DONOR WERE ALSO FILED. THESE DONATIONS WERE RECEIVE D BY CHEQUE. THUS THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS ON IT. TH E IDENTITY OF THE DONOR WAS NEVER IN DOUBT AS THE DONOR HIMSELF WAS ONE OF THE TRUSTEES OF THE TRUST AND SETTLER OF THE ASSESSEE TRUST. THE ASSESSEE SUBMITT ED LIST OF DONOR WITH ADDRESS. THE DONOR WAS NRI. THE COPY OF INCOME TAX RETURNS A CKNOWLEDGEMENT WAS FILED IN INDIA WAS ALSO FILED. ASSESSING OFFICER WR ONGLY ANALYZED THIS ACKNOWLEDGEMENT FOR DRAWING CONCLUSION ABOUT THE CA PACITY OF DONOR. DONOR COULD NOT BE PRODUCED BEFORE ASSESSING OFFICER AS H E WAS OUT OF INDIA DURING RELEVANT TIME. THE AMOUNT WAS PAID BY CHEQUE. NOT C LAIMING 80G BY DONOR IN RETURN OF INCOME ON DONATION AMOUNT COULD NOT BE V IEWED OTHERWISE. ADMITTEDLY 75% OF THE DONATIONS ARE APPLIED FOR CH ARITABLE PURPOSES AND LD. AR SUBMITTED THAT IN SUCH A SITUATION THE ADDITION WAS UNJUSTIFIED. THE CIT (A) HIMSELF HAD HELD THAT ASSESSEE AS CHARITABLE TR UST. THE CORPUS DONATION WAS SPECIFICALLY EXEMPTED U/S 11(1)(D) OF THE ACT. THEREFORE SUCH ADDITIONS ITA NO.2198 2199 & 2487/DEL/2012 6 ARE NOT JUSTIFIED. HE FURTHER SUBMITTED THAT PRIMAR ILY THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT DOCUMENTS BEFORE ASSESSI NG OFFICER. HOWEVER TO FURTHER SUPPORT HIS CLAIM THE DOCUMENTS RELATED TO THE BANK STATEMENT AND DETAILS OF INCOME-TAX RETURN OF SHRI YASH PAL CHABR A WAS ALSO FILED BEFORE THE CIT (A) WHICH HAS NOT BEEN ADMITTED WITHOUT ANY COG ENT REASON. THE LD. AR FURTHER SUBMITTED THAT THE CIT (A) HAS ALLOWED THE EXEMPTION U/S 11 & 12 OF THE ACT IN HIS ORDER BUT WITHOUT ANY COGENT REASON THE ADDITION WAS SUSTAINED. THE INCOME-TAX ACKNOWLEDGEMENT OF THE DONOR SHRI Y ASH PAL CHABRA FOR THE ASSESSMENT YEAR 2006-07 WAS ALSO FILED. IN SUCH SIT UATION THE ASSESSING OFFICER WAS COMPLETELY UNJUSTIFIED IN MAKING AND CI T (A) WAS ALSO UNJUSTIFIED IN CONFIRMING THE ADDITION. THE PRIMARY ONUS ON THE PART OF THE ASSESSEE WAS FULLY DISCHARGED. LD. AR VEHEMENTLY PL EADED TO DELETE THE ADDITION. 4. ON TO THE OTHER HAND THE LD. DR RELIED ON THE O RDERS OF THE AUTHORITIES BELOW AND PLEADED TO SUSTAIN THE SAME. LD. DR PLEAD ED THAT ALL DETAILS WERE NOT FILED BEFORE ASSESSING OFFICER. DONOR WAS NOT P RODUCED BEFORE ASSESSING OFFICER HENCE CAPACITY OF DONOR REMAINED UNESTABL ISHED AND PLEADED TO SUSTAIN CIT (A) ORDER. 5. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERUS ED THE DOCUMENTS AVAILABLE IN THE RECORD. THE ASSESSEE WAS A CHARITA BLE TRUST AND WAS ENGAGED IN CHARITABLE ACTIVITIES AS HELD BY CIT (A). THIS F ACT HAS BEEN ADMITTED BY THE ITA NO.2198 2199 & 2487/DEL/2012 7 ASSESSING OFFICER HIMSELF IN THE ASSESSMENT YEAR 20 05-06. CIT (A) GRANTED THE RELIEF TO THE ASSESSEE FOR THE YEAR UNDER CONSI DERATION FOR CLAIM OF EXEMPTION U/S 11 OF THE ACT. DURING THE YEAR THE V OLUNTARY CONTRIBUTION OF CORPUS DONATION OF RS.72 04 404/- WAS RECEIVED FROM SHRI CHABRA WHICH WAS CLEAR FROM THE COMPUTATION OF INCOME SUBMITTED TO T HE INCOME-TAX DEPARTMENT. SHRI YASH PAL CHABRA WAS ONE OF THE TRU STEE OF THE ASSESSEE TRUST. THIS FACT IS EVIDENT FROM THE RECORDS. DURING THE R ELEVANT PERIOD THE ASSESSEE ENJOYING THE STATUS OF A TRUST REGISTERED U/S 12A R EAD WITH SECTION 12AA OF THE INCOME-TAX ACT 1961. DURING THIS PERIOD THE A SSESSEE WAS ALSO ENJOYING THE BENEFIT OF EXEMPTION UNDER SECTION 80G(5)(VI) O F THE ACT. THE ASSESSEE PRODUCED THE FOLLOWING DETAILS BEFORE THE ASSESSING OFFICER WITH REGARD TO THE CORPUS DONATIONS RECEIVED BY IT :- (I) NAME AND ADDRESS OF PERSON ALONG WITH HIS PASS PORT (II) DATE OF RECEIPT (III) CHEQUE NUMBER (IV) PAN NO. OF DONOR AND ACKNOWLEDGEMENT OF ITR (V) CONFIRMATION FROM DONOR THE ASSESSING OFFICER INSISTED FOR THE PRESENCE OF THE DONOR WHICH COULD NOT BE DONE FOR THE REASON THAT THE DONOR WAS LOCATED O UTSIDE INDIA DURING THE RELEVANT PERIOD. DONOR WAS A NON-RESIDENT. IN OUR C ONSIDERED VIEW NON- PRODUCTION OF DONOR FOR REASONS STATED COULD NOT BE MADE A BASIS FOR ADVERSE INFERENCE. IDENTITY OF THE DONOR WAS BEYOND DOUBT A S HE HIMSELF WAS A SETTLER AND TRUSTEE OF THE ASSESSEE TRUST. TO STRENGTHEN TH E CLAIM OF THE ASSESSEE ITA NO.2198 2199 & 2487/DEL/2012 8 REGARDING THE GENUINENESS OF THE CORPUS DONATION FU RTHER DOCUMENTS LIKE BANK STATEMENT OF THE DONOR AND ITR OF SHRI YASH PAL CHA BRA WERE FILED AS ADDITIONAL EVIDENCE WHICH HAD NOT BEEN ADMITTED BY THE CIT (A). THIS STAND OF CIT (A) WAS WITHOUT ANY COGENT REASON. THE DONAT IONS WERE RECEIVED BY CHEQUES FROM NONE OTHER THAN THE SETTLER OF THE TRU ST. THEREFORE IN OUR CONSIDERED VIEW THE ASSESSEE WAS ABLE TO DISCHARGE THE ONUS BY PROVING THE IDENTITY OF THE DONOR AND ALSO THE GENUINENESS OF T HE TRANSACTION. NO ADVERSE INFERENCE CAN BE DRAWN REGARDING THE CAPACITY OF TH E DONOR. KEEPING THESE FACTS IN VIEW WE HOLD THAT THE CIT (A) WAS NOT JUS TIFIED IN SUSTAINING THE ADDITION. THEREFORE WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND ALLOW THE ASSESSEES APPEAL BEING ITA NO.2198/DEL/2012. ITA NOS.2487/DEL/2012 & 2199/DEL/2012 6. THESE CROSS APPEALS EMANATE FROM THE ORDER OF TH E CIT (APPEALS)-XXI NEW DELHI DATED 30.03.2012 FOR THE ASSESSMENT YEARS 2008-09. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN ITA NO.2487/DEL/2 012 READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT (A) HAS ERRED IN ALLOWING THE BENEFIT OF EXEMPT ION U/S 11 & 12 OF THE ACT THOUGH ALL THE ADDITIONS MADE BY THE AO HAS BE EN CONFIRMED BY THE LD. CIT (A). 2. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER OR A MEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. THE GROUNDS OF ASSESSEES APPEAL IN ITA NO.2189/DEL /2012 READ AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN CONFIRMING THE FOLLOWING ADDITIONS MADE TO THE RETURNED INCOME BY THE ASSESSING OFFICER :- ITA NO.2198 2199 & 2487/DEL/2012 9 (I) RS.3 00 00 000/- ON ACCOUNT OF TRANSFER OF FL AT; (II) RS. 15 60 000/- ON ACCOUNT OF SECURITY DEP OSIT; (III) RS. 54 65 000/- ON ACCOUNT OF RENT RECEIV ED; (IV) RS. 44 277/- ON ACCOUNT OF INTEREST; ALL THE ABOVE ADDITIONS BEING MISCONCEIVED ERRONEO US UNFAIR AND UNJUST MUST BE QUASHED WITH DIRECTIONS FOR RELIEF. 7. IN REVENUES APPEAL THE ONLY ISSUE INVOLVED IS AGAINST THE CIT (A) ALLOWING THE BENEFIT OF EXEMPTION U/S 11 & 12 OF TH E INCOME-TAX ACT 1961 TO THE ASSESSEE. THE CIT (A) HAS HELD THAT ASSESSEE IS INVOLVED IN CHARITABLE ACTIVITIES AS FOUND BY ASSESSING OFFICER IN ASSESSM ENT YEAR 2005-06 AND 2007-08. LD. DR RELIED ON THE ORDER OF THE ASSESSIN G OFFICER AND SUBMITTED THAT THE ORDER OF THE CIT (A) ON THIS ISSUE MAY BE SET ASIDE. 8. ON THE OTHER HAND THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER AFTER DETAILED INQUIRY HAS HIMSELF FOUND AND REPORTED THA T THE ASSESSEE TRUST IS INVOLVED IN CHARITABLE ACTIVITIES DURING THE ASSESS MENT YEAR 2005-06 AND 2007-08. THERE IS NO CHANGE IN FACTS DURING THE YEA R. SINCE THE ASSESSEE WAS INVOLVED IN THE CHARITABLE ACTIVITIES DURING THE RE LEVANT YEAR THEREFORE THE CIT (A) HAS RIGHTLY ALLOWED THE BENEFIT OF EXEMPTIO N U/S 11 & 12 OF THE ACT. LD. AR PLEADED TO SUSTAIN THE ORDER OF THE CIT (A). 9. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE HA VE ALSO PERUSED THE RELEVANT DOCUMENTS FILED IN THE PAPER BOOK. THE CIT (A) HAD GRANTED THE RELIEF BY HOLDING AS UNDER :- 4. GROUND NO.3 & 4 ARE AGAINST THE ACTION OF AO W HEREIN HE DENIED BENEFIT OF EXEMPTION U/S.11&12 HOLDING THAT ACTIVITIES OF THE TRUST ARE IN ACCORDANCE WITH THE PROVISION OF S ECTION 2(15). IN ITA NO.2198 2199 & 2487/DEL/2012 10 THIS REGARD IN THE APPELLANT'S OWN CASE FOR A.Y.20 05-06 & 07- 08 DETAILED ENQUIRY HAS BEEN CONDUCTED BY THE AO AND WHILE SUBMITTING THE REMAND REPORT FOR A. Y.2005-06 HE CONCLUDED THAT ASSESSEE SOCIETY IS INVOLVED IN CHARITABLE ACT IVITIES. ON THE BASIS OF REMAND REPORT DATED 28.7.2011 ASSESSEE HA S BEEN HELD AS INVOLVED IN CHARITABLE ACTIVITY IN A.Y.2005-06 & 2007-08. AS ACTIVITIES OF THE APPELLANT REMAINS SAME BENEFIT O F EXEMPTION U/S.L1 & 12 ARE ALLOWED. GROUND NO.3& 4 ARE ALLOWED IN FAVOUR OF THE APPELLANT. AFTER HEARING BOTH THE SIDES WE REACH TO A CONCLUS ION THAT THE ASSESSEE TRUST WAS DOING CHARITABLE ACTIVITIES DURING THE RELEVANT PERIOD ALSO. THE ASSESSING OFFICER HIMSELF CONDUCTED THOROUGH EXAMINATION OF T HE ACTIVITIES FOR THE ASSESSMENT YEAR 2005-06 AND 2007-08. THERE IS NO CH ANGE IN THE FACTS FOR THIS YEAR AND THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY SPECIFIC INSTANCE WHICH GOES CONTRARY TO THE FINDING OF THE ASSESSING OFFICER FOR ASSESSMENT YEARS 2005-06 AND 2007-08. THEREFORE IN OUR CONSID ERED VIEW THE CIT (A) WAS JUSTIFIED IN GRANTING THE EXEMPTION TO THE ASSE SSEE U/S 11 & 12 OF THE ACT. WE WOULD ALSO LIKE TO SAY THAT THE ASSESSEE CONTINU ED WITH THE STATUS OF REGISTRATION U/S 12A AND ALSO EXEMPTION U/S 80G OF THE ACT DURING THIS YEAR ALSO. IN VIEW OF THESE FACTS WE DISMISS THE REVENU ES APPEAL. 10. IN THE ASSESSEES APPEAL IN ITA NO.2199/DEL/201 2 THE ISSUES INVOLVED ARE SUSTAINING THE FOUR ADDITIONS MADE BY THE ASSES SING OFFICER. THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS : (I) RS.3 00 00 000/- ON ACCOUNT OF TRANSFER OF FLA T; (II) RS. 15 60 000/- ON ACCOUNT OF SECURITY DEP OSIT; (III) RS. 54 65 000/- ON ACCOUNT OF RENT RECEIV ED; (IV) RS. 44 277/- ON ACCOUNT OF INTEREST; ITA NO.2198 2199 & 2487/DEL/2012 11 11. BEFORE US LD. AR SUBMITTED THAT THE ASSESSEE I S A CHARITABLE TRUST CONTINUED WITH THE REGISTRATION U/S 12A OF THE ACT FOR THE YEAR. IT ALSO ENJOYED EXEMPTION U/S 80G OF THE ACT DURING THE YEAR. THE A SSESSEE TRUST IS ENGAGED IN THE VARIOUS CHARITABLE ACTIVITIES DURING THE YEAR W HICH INCLUDES EDUCATION RESEARCH RELIEF TO POOR MEDICAL RELIEF AND ADVANC EMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY. THE ASSESSEE CONTINUED I TS CHARITABLE ACTIVITIES DURING THE YEAR ALSO. THE ASSESSEE COMPANY SUBMITTED THE R ETURN OF INCOME ON 04.12.2008 DECLARING INCOME AT NIL. THIS RETURN WAS ACCOMPANIED WITH AUDIT REPORT IN FORM NO.10B. IT ALSO ACCOMPANIED WITH BAL ANCE SHEET INCOME AND EXPENDITURE ACCOUNT AND RELEVANT ANNEXURES. WITH RE GARD TO THE ADDITION OF RS.3 CRORES ON ACCOUNT OF TRANSFER OF FLAT LD. AR SUBMITTED THAT SHRI YASH PAL CHABRA ONE OF THE TRUSTEES OF THE ASSESSEE TRUST P URCHASED A PROPERTY AT FIRST FLOOR CENTRINO PLAZA PLOT NO.8 POCKET 4 SECTION XI MLU DWARKA NEW DELHI-10075 FROM M/S. SSPB CONSTRUCTION PVT. LTD. V IDE AGREEMENT DATED 14.06.2006. SHRI YASH PAL CHABRA GAVE THIS PROPERTY ON RENT TO FAB INDIA OVERSEAS PVT. LTD. VIDE LEASE AGREEMENT DATED 01.09 .2006. THE PROPERTY WAS TRANSFERRED BY SHRI YASH PAL CHABRA TO THE ASSESSEE TRUST ON 05.05.2007. SHRI YASH PAL CHABRA ALSO TRANSFERRED THE SECURITY DEPOS IT RECEIVED FROM TENANT M/S. FAB INDIA OVERSEAS LTD. OF RS.15 60 000/- TO T HE ASSESSEE ON 10.05.2007. WITH REGARD TO THE TRANSFER OF THE PROPERTY IN THE NAME OF THE ASSESSEE THE ITA NO.2198 2199 & 2487/DEL/2012 12 INFORMATION WAS PROVIDED TO M/S. FAB INDIA OVERSEAS PVT. LTD. ON 08.05.2007 WITH THE REQUEST TO GIVE THE RENT TO THE ASSESSEE T RUST W.E.F. 01.06.2007. HOWEVER ASSESSEE COULD NOT MAKE FULL AND FINAL PAY MENTS AS AGREED UPON TO SHRI YASH PAL CHABRA THEREFORE PROPERTY WAS TRANS FERRED BACK TO SHRI YASH PAL CHABRA ON 26.03.2008. IT HAS BEEN SUBSEQUENTLY TRANSFERRED TO M/S. B&B SOLUTIONS CONSULTANTS PVT. LTD. THIS TRANSFER WAS E FFECTED BY SHRI YASH PAL CHABRA. THE ASSESSEE ALSO RETURNED THE SECURITY DEP OSITED OF RS.15 60 000/- TO SHRI YASH PAL CHABRA VIDE TWO CHEQUES NO.58002 AND 58003 FOR RS.8 LACS AND RS.7 60 000/- RESPECTIVELY. THE ASSESSEE ALSO CREDI TED SHRI YASH PAL CHABRA ON ACCOUNT OF RENT RECEIVED FROM M/S. FAB INDIA SIN CE THIS RENT WAS NEVER BELONGED TO THE ASSESSEE AND IT WAS RECEIVED ON BEH ALF OF SHRI YASH PAL CHABRA. SHRI YASH PAL CHABRA HAS SHOWN WHOLE OF THE RENT IN HIS BOOKS OF ACCOUNT AND FINALLY IN HIS RETURN OF INCOME. THEREF ORE ADDITION MADE BY THE ASSESSING OFFICER FOR TRANSFER OF PROPERTY OF RS.3 CRORES SECURITY DEPOSIT OF RS.15 60 000/- FOR RENTAL INCOME OF RS.54 65 000/- AND INTEREST OF RS.44 277/- WAS COMPLETELY UNJUSTIFIED. THE SECURIT Y DEPOSIT WAS RETURNED BACK TO SHRI YASH PAL CHABRA AS ASSESSEE COULD NOT ADHERE TO THE TERMS OF THE AGREEMENT. THEREFORE THIS AMOUNT CANNOT BE TREATED THE INCOME OF THE ASSESSEE. FURTHER THE AMOUNT FOR WHICH THE PROPERT Y WAS TRANSFERRED TO M/S. B&B SOLUTIONS BY SHRI YASH PAL CHABRA CANNOT BE TRE ATED AS INCOME OF ASSESSEE. THE PROPERTY NEVER BECAME ASSET OF ASSESS EE AS ASSESSEE HAS FAILED ITA NO.2198 2199 & 2487/DEL/2012 13 TO COMPLY WITH THE TERMS AND CONDITIONS OF AGREEMEN T BY NOT MAKING FULL PAYMENT TO SHRI YASH PAL CHABRA IN LIEU OF THIS PRO PERTY. THERE WAS NO JUSTIFICATION IN ADDING THIS AMOUNT AS INCOME OF TH E ASSESSEE. THE PROPERTY WAS NEVER OWNED BY THE ASSESSEE. THEREFORE NO ADVE RSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. THE RELEVANT MEMO OF UN DERSTANDING WITH SHRI YASH PAL CHABRA WAS FILED BEFORE THE ASSESSING OFFI CER HOWEVER HE HAD NOT CONSIDERED THE SAME. THERE WAS NO REGISTERED SALE D EED IN FAVOUR OF THE ASSESSEE. SINCE THE ASSESSEE FAILED TO MAKE THE FUL L PAYMENT TO SHRI YASH PAL CHABRA THE DEAL WAS CANCELLED HENCE NO SALE DEED/ TRANSFER DEED WAS EXECUTED. THIS PROPERTY NEVER BECAME PROPERTY OF TH E ASSESSEE TRUST. THEREFORE THERE WAS NO JUSTIFICATION IN MAKING THE SE ADDITIONS. FURTHER LD. AR SUBMITTED THAT SINCE THE PROPERTY WAS NOT BELONG ING TO THE ASSESSEE THE RENT RECEIVED WAS NOT BELONGING TO THE ASSESSEE AS THE DEAL FINALLY COULD NOT GO THROUGH. THIS RENT WHICH WAS CREDITED TO THE ACC OUNT OF THE ASSESSEE WAS DULY RETURNED TO SHRI YASH PAL CHABRA. THE SAME HAS RECORDED BY SHRI YASH PAL CHABRA AS HIS INCOME IN HIS BOOKS OF ACCOUNT AN D DECLARED TO INCOME-TAX DEPARTMENT. SHRI YASH PAL CHABRA HAS ALSO PAID THE DUE TAXES ON THIS RENTAL INCOME. THESE FACTS SHOW THAT ASSESSEE WAS NEVER HA D ANY RENTAL INCOME FOR WHICH IT CAN BE MADE LIABLE FOR TAXATION. SIMILARLY THE INTEREST INCOME ADDED TO THE ASSESSEE WAS ALSO UNJUSTIFIED WHEN ASSESSEE WAS ENJOYING REGISTRATION ITA NO.2198 2199 & 2487/DEL/2012 14 U/S 12A OF THE ACT. LD. AR PLEADED TO SET ASIDE THE ORDER OF THE CIT (A) ON THIS ISSUE. 12. WE HAVE HEARD BOTH THE SIDES ON THESE ISSUES. C IT (A) HAD SUSTAINED THESE ADDITIONS BY HOLDING AS UNDER :- 5.1 AS THE ISSUES PERTAINS TO TRANSFER OF PROPERTY BY MR. YASH PAL CHABRA OR A CONSIDERATION OF RS.3 CRORES. WHILE DEC IDING THE ISSUE FOR A.Y. 2006-07 VIDE ORDER DATED 29.03.2012 IT WAS FOUND T HAT MR.YASH PAL CHABRA IS BEING FOUND TO BE GIVING CORPUS DONATION OF RS.72 04 404/- WHICH HAS BEEN ADDED U/S.68. AFTER DETAILED DISCUSS ION ADDITION HAS BEEN SUSTAINED IN A.Y.2006-07. FOLLOWING THE SAME ANALOG Y IT IS FOUND THAT APPELLANT WAS NOT ABLE TO CONTROVERT THE FINDINGS O F THE AO GIVEN IN THE ASSESSMENT ORDER. SO IN MY CONSIDERED OPINION ADDI TIONS MADE BY AO REMAINS CONCLUSIVE. THEREFORE ADDITION MADE ON ACC OUNT OF TRANSFER OF FLAT (RS.3 CRORES) ADDITION ON ACCOUNT OF RENT RECEIVED (RS.54 65 000/-) ADDITION ON ACCOUNT OF INTEREST (RS.44 277/-) & ADD ITION ON ACCOUNT OF SECURITY DEPOSIT OF RS.15 60000/- ARE CONFIRMED. GR OUND NO.5 6 7 & 8 ARE DISMISSED. THE ASSESSEE IS A TRUST ENJOYING THE BENEFIT OF REG ISTRATION U/S 12A OF THE INCOME-TAX ACT 1961 AND WAS ALSO GRANTED EXEMPTION U/S 80G OF THE ACT. THE TRUST WAS ENGAGED IN THE VARIOUS CHARITABLE ACT IVITIES DURING THE YEAR UNDER CONSIDERATION. DURING THE YEAR THE ASSESSEE TRUST ENTERED INTO A PROPERTY TRANSACTION. THE FACTS REGARDING THE TRANSACTION CA N BE SUMMARIZED AS UNDER :- THE PROPERTY AT FIRST FLOOR CENTRINO PLAZA PLOT NO.8 POCKET 4 SECTION I MLU DWARKA NEW DELHI-110075 WAS PURCHA SED BY SHRI YASH PAL CHABRA FROM M/S. SSPB CONSTRUCTION PVT. LTD. VIDE A GREEMENT DATED 14.06.2006. THIS PROPERTY WAS GIVEN ON RENT TO FAB INDIA OVERSEAS PVT. LTD. VIDE LEASE DEED DATED 01.09.2006. SHRI YASH PAL CHA BRA TRANSFERRED THIS PROPERTY TO THE ASSESSEE TRUST ON 05.05.2007. SHRI YASH PAL CHABRA ALSO ITA NO.2198 2199 & 2487/DEL/2012 15 TRANSFERRED THE SECURITY DEPOSIT RECEIVED FROM THE TENANT FAB INDIA OVERSEAS PVT. LTD. OF RS.15 60 000/- ON 10.05.2007. SHRI YAS H PAL CHABRA ALSO INTIMATED THE TENANT FAB INDIA OVERSEAS PVT. LTD. TO GIVE THE RENT TO ASSESSEE TRUST W.E.F. 01.06.2007. HOWEVER THE ASSESSEE TRUS T COULD NOT MAKE FULL AND FINAL PAYMENT TO SHRI YASH PAL CHABRA IN DUE COURSE . ON ACCOUNT OF FAILURE FOR MAKING THE FULL AND FINAL PAYMENT THE PROPERTY WAS TRANSFERRED BACK TO SHRI YASH PAL CHABRA ON 26.03.2008. THIS PROPERTY I S FURTHER TRANSFERRED BY SHRI YASH PAL CHABRA TO M/S. B&B SOLUTIONS. ACCORDI NGLY THE ASSESSEE ALSO TRANSFERRED THE SECURITY DEPOSIT OF RS.15 60 000/- TO SHRI YASH PAL CHABRA VIDE CHEQUE NO.58002 AND 58003 FOR RS.8 LACS AND RS .7 60 000/- RESPECTIVELY. THE ASSESSEE TRUST ALSO CREDITED SHRI YASH PAL CHAB RA IN RESPECT OF RENT RECEIVED FROM FAB INDIA OVERSEAS PVT. LTD.. THIS AM OUNT WAS OFFERED BY SHRI YASH PAL CHABRA IN HIS RETURN OF INCOME. THESE FACT S WERE ALSO BROUGHT BEFORE THE ASSESSING OFFICER BY THE ASSESSEE TRUST HOWEVE R HE HAS NOT CONSIDERED THESE FACTS AND MADE THE ADDITION WHICH THE CIT (A) HAS ALSO SUSTAINED. THE AGREEMENT FOR PURCHASE OF THE PROPERTY WAS FOR RS.3 CRORES. SINCE THE ASSESSEE COULD NOT MAKE THE PAYMENT IN TIME TO MATERIALIZE T HE DEAL THEREFORE THIS TRANSACTION WAS GOT CANCELLED. ONCE THE TRANSACTION WAS CANCELLED THEN SALE OF THE SAME PROPERTY BY SHRI CHABRA TO A THIRD PARTY C ANNOT BE CONSIDERED AS INCOME OF THE ASSESSEE. THE SECURITY DEPOSIT RECEIV ED FROM THE SELLER WHICH ULTIMATELY HE RECEIVED FROM THE TENANT AND THE RENT RECEIVED FROM THE TENANT ITA NO.2198 2199 & 2487/DEL/2012 16 WAS RETURNED BACK TO THE SELLER SHRI YASH PAL CHAB RA. SHRI CHABRA HAS DECLARED THIS RENTAL INCOME IN HIS RETURN OF INCOME . THE ASSESSEE HAS GIVEN SUFFICIENT EVIDENCE REGARDING THE RETURN OF SECURIT Y DEPOSIT OF RS.15 60 000/- WHICH HAS BEEN DONE BY TWO CHEQUES. SIMILARLY WHEN THE ASSESSEE HAS FAILED TO MAKE FULL AND FINAL PAYMENT AND THE DEAL COULD N OT BE MATERIALIZED THEN SUCH ADDITION CANNOT BE MADE IN THE HANDS OF THE AS SESSEE. SIMILARLY WHEN THE DEAL WAS NOT MATERIALIZED THE RENT RECEIVED FRO M TENANT ALSO TRANSFERRED TO THE ORIGINAL OWNER OF THE PROPERTY AND HE HAS DECLA RED THIS INCOME. CONSIDERING ALL THESE FACTS WE FIND THAT AUTHORITI ES BELOW WERE NOT JUSTIFIED IN MAKING SUCH ADDITION TO THE INCOME OF THE ASSESSEE THEREFORE WE SET ASIDE ORDERS OF THE AUTHORITIES BELOW. SINCE INCOME OF TH E ASSESSEE HAS BEEN HELD EXEMPTED U/S 11OF THE INCOME-TAX ACT 1961 THE INT EREST INCOME ALSO GOT THE BENEFIT FOR EXEMPTION. CONSIDERING ALL THESE FACTS WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW. 13. IN THE RESULT THE APPEALS IN ITA NO.2198/DEL20 12 AND ITA NO.2199/DEL/2012 FILED BY THE ASSESSEE ARE ALLOWED WHEREAS THE APPEAL IN ITA NO.2487/DEL/2012 FILED BY THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JULY 2013. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF JULY 2013/TS ITA NO.2198 2199 & 2487/DEL/2012 17 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXI NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.