Asst C I T Bangalore v. Sri K R Kaviraj Hospet

In The Income Tax Appellate Tribunal Bangalore Bench A Before S Hri Vijay Pal Rao Judicial Member And Shri Inturi Rama Rao Accountant Member I T A No 1224 Bang 20 15 Assessment Year 20 11 12 M S Moogambigai Charitable And Educational Trus T Rr College Of Management Studies Ramahalli Cross Kumbalgode Bangalore 560 060 Appellant Vs The Addl Director Of Income Tax Exemptions Range 17 Ba Ngalore Respondent Appellant By Shri M Karunakaran Advocate R E Spondent By Shri Pramod Kumar Singh Cit Ii D R Date Of H Earing 10 5 2016 Date Of P Ronouncement 13 7 201 6 O R D E R Per Shri Vijay P Al Rao J M This Appeal By The Assessee Is Directed Against The Order Dt 24 6 2015 Of The Commission Er Of Income Tax Appeals For The Assessment Year 2011 12 2 It A No 1224 Bang 201 5 2 There Is A Delay Of 17 Days In Filing The Present Appeal By The Assessee The Assessee Has Filed The Petition For Condonation Of Delay Supported By An Affidavit Of Its Trustee Sri A C Sh Anmugam 3 We Have Heard The Learned Authorised Representative As Well As Learned Departmental Representative And Considered The Affidavit Filed By The Assessee For Delay Of 17 Days In Filing The Appeal The Assessee Has Stated In The Affidavit Th A T The Impugned Order W A S Received On 29 7 2015 And The Appeal Should Have Been Filed By 20 8 2015 However A Search And Seizure Action Under Section 132 Of The Act Was Carried Out In The Premises Of The Assessees Trust On 6 8 2015 Therefore All The Perso Ns In Charge Of The Accounts Section Were Completely Involved In The Post Search Proceedings Since They Were Attending The Income Tax Office Every Day To Furnish Verification And Other Details Called For The Assessee Could Not Take The Necessary Steps To File The Appeal Within The Period Of Limitation Therefore It Is Pleaded That The Delay Of 17 Days Was Neither Intentional Nor Wanto N But Due To Circumstances Which Were Beyond The Control Of The Assessee 3 It A No 1224 Bang 201 5 4 The Learned Departmental Representativ E Has Vehemently Opposed The Condonation Of Delay 5 Having Considered The Rival Submissions And The Cause Of Delay Explained By The Assessee In The Affidavit We Find That The Assessee Had A Reasonable Cause For Not Presenting The Present Appeal With In The Period Of Limitation We Further Note That There Is Nothing On Record To Suggest That By Filing The Appeal Belatedly By 17 Days The Assessee Would Have Achieved Any Ulterior Object Or Purpose Accordingly We Are Satisfied That The Assessee Has E Xplained Sufficient Reason For The Delay Of 17 Days In Filing The Appeal Hence In The Facts And Circumstances Of The Case And In The Interest Of Justice We Condone The Delay Of 17 Days In Filing The Appeal 6 The Assessee Is A Charitable And Educat Ional Trust Established In The Year 1992 By Trust Deed Dt 20 5 1992 The Assessee Was Granted A Registration Under Section 12 A Of The Income Tax Act 1961 In Short The Act Vide Orderdt 16 9 1992 The Assessee Was Also Granted Approval Under Sectio N 10 23 C Of The Act By The Chief Commissioner Of Income Tax Bangalore I Vide Order Dt 26 3 2009 The Assessee Filed Its 4 It A No 1224 Bang 201 5 Return Of Income On 11 7 2011 For The Assessment Year Under Consideration Admitting Nil Income After Claiming Revenue Expenses Inclu Ding Depreciation The Assessing Officer While Framing The Assessment Under Section 143 3 Of The Act On 27 3 2014 Determined The Total Income Of The Assessee At Rs 7 63 80 700 The Assessing Officer Disallowed The Claim Of Depreciation As Well As Made Other Additions Towards Advance Fee Income From Pharmacy And Also Denied The Deduction Towards Accumulation Of I N Come Allowed 15 On Gross Receipts Apart From This The Assessing Officer Also Denied The Set Ting Off Of Excess Application Of Inc Ome For The Assessment Year 2010 11 Against The Income For The Assessment Year Under Consideration As Well As The Deduction Of Liability For Capital Expenditure The Assessee Challenged The Action Of The Assessing Officer Before The Cit Appeals But Co Uld Not Succeed The Assessee Has Filed The Present Appeal And Raised The Following Grounds 1 The Commissioner Of Income Tax Appeals Erred In Not Allowing The Claim Of Depreciation Of Rs 10 73 00 1241 To The Appellants On The Ground That T He Same Amounted To Double Deduction 2 The Commissioner Of Income Tax Appeals Erred In Relying On The Amendment Made By Finance Act 2014 As It Was Effective Only From 1 4 2015 And The Same Is Amendatory And Prospective In Nature As Hel D By The Madras High Court In The Case Of V R Karpagam 54 F And In 5 It A No 1224 Bang 201 5 The Case Of Cit Vs Coromandel Industries Ltd Tca No 443 Of 2014 Dated 16 12 14 Uls 54 Ec And Therefore Would Not Apply To The Assessment Year Under Consideration 3 The Commissioner Of Income Tax Appeals Erred In Sustaining The Addition Of Rs 1 27 67 5301 Being The Advance Fee Received As Income Of The Appellants Trust 4 The Lower Authorities Ought To Have Seen That Advance Fee Is O Nly A Liability Of The Appellants Trust And They Cannot Considered As Income Of The Appellant As Long As The Advance Was Taken To The Fees Accov T In The Subsequent Years 5 The Commissioner Of Income Tax Appeals Erred In Sustaining T He Addition Of Rs 1 10 25 8001 Representing The Retention Money As Income Of The Appellants Trust 6 The Lower Authorities Ought To Have Seen That Amount Standing To The Retention Money Account Represent Only Opening Balance And Only A Sum Of Rs 30 42 402 Relate To The Current Assessment Year And Therefore The Assessing Officer Was Not Justified In Adding The Entire Sum Of Rs 1 10 25 8001 As Income Of The Appellants Trust 7 The Commissioner Of Income Tax A Ppeals Erred In Sustaining The Addition Of Rs 50 66 973 As Income From Pharmacy As Business Income Of The Appellants Trust 8 The Lower Authorities Ought To Have Seen Tl At The Running Of The Pharmacy Was Incidental To The Running Of The Medical College And Hospital And Therefore The Income From Pharmacy Cannot Be Considered As Business Undertaking Of The Appellants Trust 9 The Commissioner Of Income Tax Appeals Erred In Sustaining The Order Of The Assessi Ng Officer In Allowing 15 Accumulation On The Net Income Of The Appellant Against Gross Receipts As Claimed By The Appellant 10 The Appellants Submit That The Findings Of The Lower Authorities Are Contradictory To The Decision Of The Supreme Court In The Case Of Cit V Programme For Community Organisation 2001 248 Itr 1 116 Taxman 608 Se And Also Boards Circulars And Other Case Laws On The Subject 11 The Commissioner Of Income Tax App Eals Erred In Not Allowing Set Off Of Excess Application Of The Assessment Year 2010 11 Against The Income Of The Appellants Trust For The Assessment Year 2011 12 6 It A No 1224 Bang 201 5 12 The Commissioner Of Income Tax Appeals Erred In Deducting Rs 7 58 8 285 Being The Liability For Capital Expenditure On The Grqund That The Amounts Were Not Spent For Capital Expenditure 13 The Lower Authorities Erred In Misinterpreting The Word Applied For The W Ord Spent The Appellants Submit That Even If The Amount Has Been Earmarked And Allocated For The Purpose Of The Institution It Will Be Deemed To Have Been Applied For Its Purposes As Laid Down By The Allahabad High Court In The Case Of Cit Vs R Adhaswami Satsang Sabha 25 Itr 472 14 The Lower Authorities Ought To Have Seer Rhat The Appellants Had Offered The Income On Mercantile Basis And Part Of The Receipts Are Not At All Received By The Appellants Trust During The Year And Therefore The Assessing Officer Should Have Allowed Deduction On Such Income Which Was Not Received During The Year While Computing The Quantum Of Application Of Income When He Has Not Allowed The Expenses On Due Basis 15 The Appella Nts Therefore Pray That The Honble Income Tax Appellate Tribunal May Be Pleased To A To Allow Depreciation Of Rs 10 73 00 124 B To Delete The Addition Of Rs 1 27 67 530 Being The Advance Fee Received Treated As Income Of The Appellants Trust C To Delete The Addition Made Towards Retention Money Of Rs 1 10 25 8001 D Not To Treat The Pharmacy Income As Business Income Of The Trust E To Allow Accumulation Of Income At 15 On The Gross Rece Ipts And Not To Restrict The Same To The Net Inc O Ie Of The Appellants Trust F To Allow Set Off Of Excess Application For The Assessment Year 2010 11 Against The Income Computed For The Assessment Year 2011 12 G To Allow The Liability For Capital Expenditure Of R S 7 58 82 285 As Application Of Income For Capital Expenditure H To Direct The Assessing Officer To Allow Deduction Of The Fees Receivable While Computing The Income Of The Appellants For Application Of Income As The Income Was No T Received During The Year 7 Ground No 1 Is General In Nature And Does Not Require Any Adjudication 7 It A No 1224 Bang 201 5 8 Ground No 2 Is Regarding Claim Of Depreciation 8 1 The Assessee Claimed Depreciation Of Rs 10 73 00 124 The Assessing Offi Cer Held That The Assessee Has Claimed Double Deduction By First Showing The Outlay For Capital Asset As Application Of Income And Thereafter Claiming Depreciation On The Capital Asset As Well The Assessing Officer Relied Upon The Decision Of Honble Su Preme Court In The Case Of Escorts Another Vs Uoi Others 199 Itr 43 Sc The Cit Appeals Confirmed The Disallowance Of Depreciation Made By The Assessing Officer By Holding That The Claim Of Depreciation Along With Application Of Money Of Capita L Expenditure Amounts Double Deduction Which Is Not Envisaged Under The Income Tax Act 1961 The Cit Appeals Has Also Referred To The Amended Provisions Of Section 11 6 By Finance Act 2014 W E F 1 4 2015 9 Before Us The Learned Authorise D Representative Of The Assessee Has Submitted That This Issue Is Covered By The Various Decisions Of This Tribunal As Well As Honble High Court He Has Relied Upon The Following Decisions 8 It A No 1224 Bang 201 5 I Ita No 686 Bang 2015 Dt 8 1 2016 Cmr Janardhana Trust Vs Asst Director Of Income Tax Ii Ita No 676 Bang 2014 Dt 20 3 2015 Acit Vs City Hospital Charitable Trust 10 On The Other Hand The Learned Departmental Representative Has Submitted That The Depreciation On The Expenditure Already Claimed As Exemption Under Section 11 Of The Act Being Application Of Income Is Not Provided Under The Provisions Of The It Act He Has Relied Upon The Orders Of The Assessing Officer And Cit Appeals 11 We Have Considered The Rival Submissions As Well As Th E Relevant Material On Record At The Outset We Note That This Issue Has Been Considered By This Tribunal In A Series Of Decisions In The Case Of M S Cmr Janardhana Trust Supra The Tribunal Has Again Considered And Decided This Issue In Paras 15 To 17 As Under 15 We Have Heard The Submissions Of The Ld Dr Who Relied On The Order Of Cit A And The Decision Of The Hon Ble Delhi High Court In The Case Of Dit E Vs Charanjiv Charitable Trust 2014 43 Taxmann Com 300 Delhi We Have Considered The Order Of The Cit A Identical Issue Came Up For Consideration Before Itat Bangalore Bench In The Case Of Ddit E V Cutchi Memon Union 2013 60 Sot 260 Bangalore Itat Wherein Similar Issue Has Been Dealt With By This Tribunal In The Aforesaid Case The Assessee Claimed Depreciation And The Ao Denied Depreciation On The Ground That At The Time Of Acquiring The Relevant Capital Asset Cost Of Acquisition Was Considered As Application Of Income In The Year Of Its Acquisition The Ao Took The View That Allowing Depreciation Would Amount To Allowing Double Deduction And 9 It A No 1224 Bang 201 5 Placed Reliance On The Decision Of Honble Supreme Court In Escorts Ltd Supra The Cit A However Allowed The Claim Of Assessee On Further Appeal By The Revenue The Tribunal Held A S Follows 20 We Have Considered The Rival Submissions If Depreciation Is Not Allowed As A Necessary Deduction For Computing Income Of Charitable Instituitions Then There Is No Way To Preserve The Corpus Of The Trust For Deriving The Income As It Is Nothing But A Decrease In The Value Of Property Through Wear Deterioration Or Obsolescence Since Income For The Purposes Of Section 11 1 Has To Be Computed In Normal Commercial Manner The Amount Of Depreciation Debited In The Books Is Deductible While Computing Such Income It Was So Held By The Hon Ble Karnataka High Court In The Case Of Cit Vs Society Of Sisters Of St Anne 146 Itr 28 Kar It Was Held In Cit Vs Tiny Tots Education Society 2011 330 Itr 21 P H Following Cit Vs Market Commit Tee Pipli 2011 330 Itr 16 P H 2011 238 Ctr P H 103 That Depreciation Can Be Claimed By A Charitable Institution In Determining Percentage Of Funds Applied For The Purpose Of Charitable Objects Claim For Depreciation Will Not Amount To Double Be Nefit The Decision Of The Hon Ble Supreme Court In The Case Of Escorts Ltd 199 Itr 43 Sc Have Been Referred To And Distinguished By The Hon Ble Court In The Aforesaid Decisions 21 The Issue Raised By The Revenue In The Ground Of Appeal Is Thus No Lo Nger Res Integra And Has Been Decided By The Hon Ble Punjab Haryana High Court In The Case Of Cit V Market Committee Pipli 330 Itr 16 P H The Hon Ble Punjab Haryana High Court After Considering Several Decisions On That Issue And Also The Decisio N Of The Hon Ble Supreme Court In The Case Of Escorts Ltd Supra Came To The Conclusion That Depreciation Is Allowable On Capital Assets On The Income Of The Charitable Trust For Determining The Quantum Of Funds Which Have To Be Applied For The Purpose Of Trusts In Terms Of Section 11 Of The Act The Hon Ble Punjab Haryana High Court Made A Reference To The Decision Of The Hon Ble Supreme Court In The Case Of Escorts Ltd Supra And Observed That The Hon Ble Supreme Court Was Dealing With A Case Of Tw O Deductions Under Different Provisions Of The Act One U S 32 For Depreciation And The Other On Account Of Expenditure Of A Capital Nature Incurred On Scientific Research U S 35 1 Iv Of The Act The Hon Ble Court Thereafter Held That A Trust Claiming Depreciation Cannot Be Equated With A Claim For Double Deduction The Hon Ble Punjab Haryana High Court Has Also Made A Reference To The Decision Of The Honble Karnataka High Court In The Case Of Cit V Society Of Sisters Of Anne 146 Itr 28 Kar Wher Ein It Was Held That U S 11 1 Of The Act Income Has To Be Computed In Normal Commercial Manner And The Amount Of Depreciation Debited In The Books Is Deductible While Computing Such Income In View Of The Aforesaid Decision On The Issue We Are Of The V Iew That The Order Of The Cit A On The Above Issue Does Not Call For Any Interference 22 Consequently Ground No 5 Raised By The Revenue Is Dismissed 10 It A No 1224 Bang 201 5 16 It Is No Doubt True That The Hon Ble Delhi High Court In The Case Of Charanjiv Charitable Trust Supra Has Taken A Contrary View But Then When Two Views Are Possible On An Issue The View Favourable To The Assessee Has To Be Followed The Decision Of The Hon Ble Punjab Haryana High Court Is In Favour Of The Assessee And Has Followed The Decision Of The Hon Ble Karnataka High Court In The Case Of Society Of Sisters Of Anne Supra The Interpretation To The Contrary Given By The Cit A On The Decision Of The Hon Ble Karnataka High Court In The Case Of Society Of Sisters Of Anne Supra Cannot There Fore Be Accepted We May Also Add That The Legal Position Has Since Been Amended By A Prospective Amendment By The Finance No 2 Act 2014 W E F 1 4 2015 By Insertion Of Subsection 6 To Section 11 Of The Act Which Reads As Under 6 In This Section Where Any Income Is Required To Be Applied Or Accumulated Or Set Apart For Application Then For Such Purposes The Income Shall Be Determined Without Any Deduction Or Allowance By Way Of Depreciation Or Otherwise In Respect Of Any Asset Acquisition Of W Hich Has Been Claimed As An Application Of Income Under This Section In The Same Or Any Other Previous Year 17 As Already Stated The Aforesaid Amendment Is Prospective And Will Apply Only From A Y 2015 16 In View Of The Above Legal Position We Are Of The View That The Order Of The Cit A Has To Be Reversed Consequently Grounds No 4 5 Raised By The Assessee Are Allowed There Is No Dispute That The Amendment Of Section 11 6 Of The Act By The Finance Act 2014 Is Prospective W E F 1 4 2015 An D Therefore The Said Amended Provision Is Not Applicable For The Assessment Year Under Consideration Following The Earlier Decisions Of This Tribunal We Decide This Issue In Favour Of The Assessee And Against The Revenue 12 Ground No 3 Is Regardin G The Addition On Account Of Advance Fee Received Treated As Income Of The Assessee For The Year Under Consideration 12 1 The Assessee Has Claimed Advance Receipt Of Rs 2 24 27 130 In Its Balance Sheet In Respect Of Collection From The Students Of Med Ical 11 It A No 1224 Bang 201 5 College Dental College And Hospital The Assessing Officer Treated The Same As Income Of The Assessee On The Ground That This Receipt Is An Additional Fees Named As Development Fees Received From The Students In The First Year Itself Apart From The Regular Tuition Fees Fixed By The Government Which Was Received From The Students On The Year To Year Basis The Assessing Officer Has Supported Its Finding By The Statement Recorded During The Survey Under Section 133 A Of The Act On 2 7 2010 The A Sses See Challenged The Action Of The Assessing Officer Before The Cit Appeals And Contended That The Document Obtained During The Survey Did Not Pertain To The Impugned Assessment Year The Cit Appeals Did Not Impress With The Contention Of The Assessee A Nd Confirmed The Addition Made By The Assessing Officer On This Account 12 2 Before Us The Learned A R Of The Assessee Has Submitted That The Actual Amount During The Year Was Only Rs 1 27 67 530 Out Of The Total Sum Shown In The Balance Sheet Of R S 2 24 27 130 And The Balance Represents The Opening Balance Which Cannot Be Considered As Income Of The Assessee He Has Submitted That This Fact Was Pointed Out To The Authorities Below But They Have Completely Ignored The Same The 12 It A No 1224 Bang 201 5 Assessing Office R Has Given Mor E Stress To The Fact That The Assessee Has Used The Advances For Its Capital And Revenue Expenditure And Therefore It Was Treated As Income He Has Further Submitted That The Cit Appeals Has Observed That The Assessee Has Not Deposited Th E Advance Fees In A Separate Account However There Is No Require Ment For Deposit Advance Fees In A Separate Bank Account He Has Further Contended That The Assessee Produced Sufficient Evidence In Support O F The Fact That The Amount Was Only Advance Fees With Full Details From The Persons Whom The Advance Was Received And The Led G Er Copy Of Advance Fees Were Also Produced To Establish The Transfer Of The Part Of Such Advance As Income Of The Year Thus The Learned Authorised Representative Has Referred To Page 11 Of The Paper Book And Submitted That The Assessee Produced Led G Er Account To Show That The Deta I Ls Including The Opening Balance And The Tuition Fees Received In Advance As Well As The Closing Balance Thus When The Fees Does Not Pertain To The Assessment Year Under Consideration The Same Cannot Be Considered As Income Of The Assessee For The Year Under Consideration 13 It A No 1224 Bang 201 5 12 3 On The Other Hand The Ld D R Has Relied Upon The Orders Of The Authorities Below And Submitted That When The Assesse E Has Not Maintained A Separate Bank Account For The Advance Fees And It Was Also Admitted During The Survey That The Assessee Has Received This Amount As Development Fees From The Students Of The First Year Apart From The Tuition Fees Fixed By The Govern Ment Then The A O Is Justified To Add This Amount In The Income Of The Assessee 12 4 We Have Considered The Rival Submissions As Well As The Relevant Material On Record The Assessing Officer Has Made The Addition Of This Amount As Income Of The Yea R On The Ground That The Assessee Has Used This Amount For Revenue As Well As Capital Expenditure During The Year Further The Assessing Officer Has Placed Reliance On The Statement Recorded Under Section 133 A Of The Act It Is Pertinent To Note That Nei Ther The Assessing Officer Nor The Cit Appeals Has Disputed This Fact That This Amount Has Been Duly Recorded In The Books Of Accounts As Advance Tuition Fees The Assessee Filed The Led G Er Account Wherein The Details Of The Opening Balance The Advance Tuition Fees Received During The Year As Well As Closing Balance Has Been Shown The Correctness Of 14 It A No 1224 Bang 201 5 The Accounts Has Not Been Examined Or Disputed By The Assessing Officer Or The Cit Appeals It Is Pertinent To Note That If An Advance Fees Is Received By The Assessee For A Particular Academic Year Spread Over More Than One Financial Year Then The Part Of The Fees Received By The Assessee Which Relates To The Academic Year Falling In Next Financial Year Cannot Be Treated As Income Of The Assessee For Th E Year Under Consideration It Is Well Settled Law That The Statement Recorded Under Section 133 A Cannot Be Sole Basis For Making An Addition Or Disallowance Without Corroborating Evidence In This Case The Authorities Below Have Not Shown In Their Fin Dings That Any Corroborating Evidence Was Found To Support This S T Atement Recorded Under Section 133 A Of The Act In View Of The Above Facts And Circumstances We Find That The Addition Made By The Assessing Officer Based On The Statement Recorded Under Section 133 A And Further By Giving A Reason That The Assessee Has Used The Advance Fees Received For Revenue As Well As Capital Expenditure Is Not Justified And Ac C Ordingly We Set Aside The Orders Of Authorities Below Qua This Issue And Remit The Same To The Record Of The Assessing Officer To Re 15 It A No 1224 Bang 201 5 Examine The Issue From The Record Produced By The Assessee And Then Decide The Same As Per Law 15 Ground Nos 4 To 6 Is Regarding The Addition On Account Of Retention Money 15 1 The Assessing Officer Noted That At The Time Of Passing The Contract Bill The Assessee Retained Certain Portion Of The Bill Amount Captioned As Retention Money And Such Amount Would Be Paid To The Contractor After Completion Of The Project Under Cons Truction Till Then The Said Amount Would Be Reflected In The Balance Sheet As Liability The Assessing Officer Made Addition Of The Said Amou N T On The Ground That The Amount Was Mixed With The Other Funds Of The Assessee And Used For The Purpose Of Meeting Both Revenue And C Apital Expenditure It Was Noted That The Retention Money Was Used For The Purpose Of Purchasing Other Assets Accordi N Gly The Assessing Officer Held That The Retention Money Held By The Assessee Of Rs 1 10 25 800 Would Form Part Of Income For The Purp Ose Of Application Under Section 11 1 A Of The Act The Assessee Challenged The Action Of The Assessing Officer But Could Not 16 It A No 1224 Bang 201 5 Succeed As The Cit Appeals Has Concurred With The View Of The Assessing Officer 15 2 Before Us The Learned Authoris Ed Representative Of The Assessee Has Submitted That The Retention Money Cannot Be Treated As Income As Held In Various Decisions Of The Honble High Courts He Has Further Contended That The Retention Money Retained By The Assessee Was Paid Subsequently To The Contractors In The Subsequent Year Whenever The Contract Is Completed And It Is A Clear Liability Of The Assessee To Repay The Amount Such Amount Due To Others Cannot Be Treated As Income Of The Assessee Alternatively The Ld Ar Has Submitted T Hat The Amount Of Rs 1 10 25 800 Standing In The Retention Money Account And The Asse Ssed As Income Mainly Represent The Amount Lying As Opening Balance Of Rs 79 83 398 In The Said Account And Only A Sum Of Rs 30 42 402 Relates To The Current Assessment Y Ear Thus The Assessing Officer Was Not Justified In Adding The Entire Amount Of Rs 1 10 25 800 Even If The Addition Is Warranted 15 3 On The Other Hand The Learned Departmental Representative Has Submitted That The Assessing Officer As Well As Th E Cit Appeals Has 17 It A No 1224 Bang 201 5 Given The Finding That The Assessee Has Claimed The Use Of Said Amount As Application Of Money Under Section 11 1 A And Therefore The Assessing Officer Correspondingly Treated The Said Amount As Income Of The Assessee He Has Relied Upon The Orders Of The Authorities Below 15 4 We Have Considered The Rival Submissions As Well As The Relevant Material On Record As Regards The Question Of Treating The Retention Money As Income Of The Assessee Is Concerned On Principle We Are Of T He View That When The Retention Money Is Retained By The Assessee For Refund In Future On Completion Of Project Then It Is Only A Liability In The Hand Of The Assessee And Therefore The Same Cannot Be Treated As Income However At The Same Time The Asses See Cannot Be Allowed To Take The Benefit Of The Said Amount Being Used For Ex Penses And Investment Being Application Of Income Therefore If The Assessee Is Having Sufficient Fund To Cover This Amount Then The Claim Of The Assessee Under Section 11 1 A On Account Of Application Of Income Would Not Be Effected Otherwise To The Extent Of The Amount Used From The Retention Money The Claim Would Be Reduced Accordingly We Direct The Assessing Officer To Verify All The Relevant Facts On This Issue And Then 18 It A No 1224 Bang 201 5 Decide The Same Only On Question Of Allowing The Deduction Of Application Of Income And Not Treating The Retention Money As Income 16 1 Ground Nos 7 8 Are Regarding Addition Of Rs 50 66 973 As Income From Pharmacy The Assessee Runs Pharmacy For Th E Purpose Of Medical College And Hospital Attached To The Medical College The Assessee Does Not Maintain Separate Books Of Accounts For Pharmacy And The Transactions Pertaining To It Are Recorded In The Books Of Accounts Maintained In The Name Of College And Hospital The Assessing Officer Accordingly Treated The Said Income As Business Income Of The Assessee From Pharmacy The Assessee Challenged The Action Of The Assessing Officer Is Before The Cit Appeals And Contended That Since The Assessee Is Al So Running The Pharmacy In The Hospital Premises Itself It Cannot Be Treated As Business Activity But It Is Incidental To Running A Hospital And Would Constitute An Integral Part Of The Hospital Run By The Assessee Thus The Assessee Contended That It Is An Incidental To The Objectives Of The Trust It Was Also Contended That Sales Of The Pharmacy Is Duly Considered For The Purpose Of Application Of Income The Cit Appeals Did Not Agree With The Contention Of The Assessee And 19 It A No 1224 Bang 201 5 Observed Th A T The Assesse E Has Not Furnished Any Evidence Regarding The Break Up Of The Medicines Purchased From The Pharmacy By Different Categories Of The Patients And Outside Public Accordingly The Cit Appeals Has Confirmed The Action Of The Assessing Officer 16 2 B Efore Us The Learned Authorised Representative Of The Assessee Has Submitted That The Assessee Is Running A Pharmacy From The Hospital Attached To The Medical College Which Has Not Been Disputed By The Assessing Officer However The Addition Is Made By The Assessing Officer Because Of The Reason That No Separate Books Of Accounts Were Maintained By The Assessee The Learned Authorised Representative Has Submitted That It Is Having A Separate Trading Account For The Pharmacy Wherein All The Charges And Sale S Are Duly Accounted For And Separate Stock Register Was Also Maintained Once The Pharmacy Attached To The Medical College Hospital Is Not A Business Undertaking The Provisions Of Section 11 4 And 11 4 A Are Not Applicable He Has Referred The Trading Account Maintained In Respect Of The Pharmacy At Page 16 Of The Paper Book And Submitted That Though Separate Books Are Not Maintained However Separate Accounts Are Maintained In Respect Of The Pharmacy 20 It A No 1224 Bang 201 5 The Learned Authorised Representative Has Furthe R Submitted That The Assessing Officer Has Wrongly Added Rs 15 35 009 With The Closing Stock Of Rs 35 31 964 Instead Of Deducting The Same For Computing The Gross Profit From The Pharmacy He Has Submitted That The Correct Gross Profit From The Pharmacy Wo Uld Be Rs 19 96 955 As It Is Clear From The Trading Account At Page 16 Of The Paper Book He Has Relied Upon The Decision Of Chennai Bench Of The Tribunal In The Case Of Franciscan Sisters Of St Joseph Society Vs Jcit Dt 6 1 2014 In Ita No 1897 Ch 2013 16 3 On The Other Hand The Learned Departmental Representative Has Submitted That The Activity Of The Pharmacy Is Business In The Nature And The Assessing Officer And Cit Appeals Have Rightly Treated The Same As Business Income Of The Assessee 16 4 We Have Considered The Rival Submissions And The Relevant Material On Record The Cit Appeals Has Rejected The Claim Of The Assessee On The Ground That The Assessee Has Not Furnished The Details Regarding The Sales Made To The Indoor And Outd Oor Patients Of The Hospital Of The Assessee As Well As Outside Public In Such A Case The Entire Amount Cannot Be Treated As The Income Earned By The Assessee 21 It A No 1224 Bang 201 5 From The Sale Of Medicines To The Outside Public When The Pharmacy Is Within The Premises Of T He Hospital And Attached To The Hospital It Is Pertinent To Note That A Dispensary Pharmacy Is Inevitable And Indispensable Facility For The Hospital The Necessity Of The Pharmacy Cannot Be Ruled Out As There Are Regular Emergency Situation Requiring Im Mediate Medicines And Other Supply Of Pharmacy For Emergency Treatment As Well As Operation Surgery Purposes The Chennai Benches Of The Tribunal In Case Of Franciscan Sisters Of St Joseph Society Supra Has Held In Paras 7 To 15 As Under 7 In Th E Light Of Above Observation The Assessing Officer Treated The Above Receipts Accounted By The Assessee As Relating To Business Activities And Accordingly Denied Exemption Under Section 11 Of The Income Tax Act 1961 In Respect Of Receipts Arising Out Of Other Activities Such As Running Of Hospital Schools Etc The Assessing Authority Has Granted The Benefit Of Section 11 To The Assessee Society A Portion Of The Income Of The Assessee Society Has Been Brought To Tax On The Ground That Certain Activi Ties Involve Carrying On Of Activities In The Nature Of Business 8 When The Matter Was Taken In First Appeal Before Cit Appeals He Confirmed The Order Of The Assessing Authority And Dismissed The Appeal Filed By The Assessee The Assessee Is Aggrieved And Therefore The Second Appeal Before The Tribunal 9 The Relevant Grounds Raised In The Present Appeal Read As Below 1 1 The Commissioner Of Income Tax Appeals Erred In Confirming The Order Of Assessment Denying Exemption U S 11 Of The Income Tax Act 1 2 The Commissioner Of Income Tax Appeals Erred In Observing That The Assessee Does Not Deny The Carrying On Activities Of Typewriting Institute Women S Hostel Crche And Pharmacy On A Profitable Basis 22 It A No 1224 Bang 201 5 1 3 The Finding Of The Commissio Ner Of Income Tax Appeals That The Appellant Did Not Deny Selling Of Medicines To Outsiders Even Assuming So Sale Of Medicines Is Only An Object Of Providing Medical Relief To The Poor Virtually At Cost And Would Not Make It An Object Of Profit 1 4 The Commissioner Of Income Tax Appeals Went Wrong In Holding That The Appellant Runs Dispensaries In Two Places In A Commercial Manner Which Finding Is Perverse And In Any Event Providing Medical Relief Is Covered In The First Two Limbs Of Sec 2 15 2 1 The Commissioner Of Income Tax Appeals Went Confirming The Disallowance Of Depreciation And That It Amounts To Double Deduction 2 2 The Commissioner Of Income Tax Appeals Failed To Follow The Various Authorities Cited Before Him And Went Wr Ong In Relying On A Decision Which Is Not Applicable To The Facts Of The Case 10 We Heard Shri G Baskar The Advocate Appearing For The Assessee Society And Shri Shaji P Jacob The Additional Commissioner Of Income Tax Appearing For The Revenue 1 1 The Crucial Question To Be Answered In The Present Appeal Is Whether Certain Activities Pointed Out By The Assessing Authority Are In Fact Carried Out In The Nature Of Business Commercial Activities 12 The First Item So Considered By The Assessing Au Thority Is The Receipts From Pharmacy Section It Is To Be Seen That Assessee Is Running A Full Fledged General Hospital At St Thomas Mount The Assessing Authority Has No Doubt Accepted The Charitable Nature Of Activities Carried On By The Assessee Soc Iety In Respect Of That Hospital The Assessee Is Also Running A Dispensary Number Of Patients Are Visiting The Hospital And Dispensary On A Daily Basis Patients Are Admitted As In Patients And They Are Also Treated As Out Patients For All The In Patie Nts Undergoing Treatment In The Hospital Medicines Are Delivered From The Pharmacy Run By The Assessee Society In Respect Of Out Patients Also Most Of The Patients Purchase Medicine From The Pharmacy Run By The Assessee A Few Of The Out Patients Might Purchase Medicines From Outside Likewise Few From The Public Living Nearby To The Hospital May Purchase Medicines From The Pharmacy Run By The Assessee Society The Purchase Of Medicines By The Public Is Absolutely Negligible That Negligible Amount Of S Ales If Any Cannot Decide The Nature Of Activities Carried On By The Assessee In Running The Pharmacy In Its Hospital Premises The Pharmacy Is Not Situated In Any Commercial Area Or Outside The Hospital Compound With The Intention To Invite The Public A T Large To Purchase Medicines From The Pharmacy Run By The Assessee Society The Assessee Society Is Running The Pharmacy Within The Premises Of The Hospital And As Part Of The Hospital Itself It Is Clear That The Pharmacy Is Run By The Assessee Society Only For The Purpose Of Running The Hospital The Hospital Cannot Be Run Without A Pharmacy Attached To It If An Assessee Wants To Run A 23 It A No 1224 Bang 201 5 Hospital Running Of The Pharmacy Is Also A Must Therefore Running Of The Pharmacy By The Assessee Society Is Not An Activity Carried On By The Assessee Incidental To The Running Of The Hospital But On The Other Hand It Is An Integral Part Of The Hospital Run By The Assessee 13 In These Circumstances The Assessing Authority Has Erred Both On Facts And In Law In H Olding That The Pharmacy Run By The Assessee Society Is A Separate Unit Running As A Business The Assessing Officer Has Observed That The Assessee Society Has Maintained Separate Accounts For The Pharmacy Section Maintaining Accounts Separately For Phar Macy Section Does Not Decide The Nature Of The Activities Carried On By The Assessee Through Running Of The Pharmacy Separate Accounts Are Maintained By The Assessee For The Purpose Of Proper Accounting And Internal Control Even In The Case Of Charitable Hospital It Is Not Possible To Provide Medicines To Every Patient Free Of Cost It Is Only In Very Deserving Cases A Charitable Institution Could Provide Medicines Free Of Cost Therefore Running Of A Pharmacy Set Up As Part Of The Hospital Involves Purchase And Sale Of Medicines Therefore Not Much Discussion Is Necessary To Come To A Conclusion That In The Case Of A Full Fledged Hospital Pharmacy Is An Essential Part Thereof And As Such The Pharmacy Is Run As Part Of The Hospital Establishment 14 In The Facts And Circumstances We Find That The Collection Received By The Assessee From Its Pharmacy Section Cannot Be Excluded From Computing The Income Eligible For Exemption Under Section 11 Of The Income Tax Act 1961 The Pharmacy Collection Al So Forms Part Of The Collections Accounted By The Assessee From Its Charitable Activities Therefore Assessing Officer Is Directed To Give Exemption Under Section 11 In Respect Of The Pharmacy Collection As Well 15 Once The Pharmacy Collection Is Treat Ed As Part Of Its Charitable Activities The Total Of The Remaining Items Work Out To Less Than Rs 10 Lakhs The Law Has Provided As On Date An Exclusion Of Rs 10 Lakhs From The Rigours Of Denying Exemption Under Section 11 In Respect Of Activities Invo Lving Carrying On Business Or Similar Activities The Total Of Collection From Typewriting Institute Working Women S Hostel And Crche Work Out To Less Than Rs 10 Lakhs And Therefore By Virtue Of The Exclusion Clause Those Amounts Also Cannot Be Consid Ered For Disallowing Exemption Under Section 11 In View Of The Above Discussion As Well As The Decision Of The Chennai Benches Of The Tribunal Supra We Decide This Issue In Favour Of The Assessee 24 It A No 1224 Bang 201 5 17 1 Ground Nos 9 10 Are Regarding Allowing The 15 Accumulation On Net Income Of The Assessee Instead Of Gross Receipts As Claimed By The Assessee 17 2 We Have Heard The Ld A R As Well As The Ld D R And Considered The Relevant Material On Record The Ld A R Of The Assessee Has Submitted Tha T This Issue Is Covered By The Decision Of The Tribunal In The Case Of Capuchin Friar Services Of Society Vs Dcit Dt 9 10 2015 In Ita No 367 Bang 2015 17 3 On The Other Hand The Learned Departmental Representative Has Relied Upon The Orders Of The Authorities Below 17 4 We Find That The Tribunal In The Case Of Capuchin Friar Services Of Society Supra Has Dealt With An Identical Issue In Paras 10 11 As Under 10 We Find That The Issue Is Covered By The Co Ordinate Bench Decision In Th E Case Of Jyothy Charitable Trust In Ita No 662 Bang 2015 The Relevant Extract Is Reproduced Below 15 The Third Issue That Arises For Consideration In This Appeal Is As To Whether 15 Accumulation For Application In Future Has To Be Calculated On Gro Ss Receipts Or Net Receipts After Deduction Of Revenue Expenditure The Assessee Claimed Accumulation Of Income For Application For Charitable Purpose At 15 Of The Gross Receipts The Ao Was Of The View That Accumulation Will Be Allowed Only To The Extent Of 15 Of The Income After Revenue Expenditure In Other Words Income To Be Set Apart U S 1 1 1 A Of The Act Has To Be 25 It A No 1224 Bang 201 5 Computed At 15 Of The Net Income I E Gross Receipts Minus Revenue Expenditure And Not On The Gross Receipts As Claimed By The Asses See Since In The Case Of The Assessee The Gross Receipts After Revenue Expenditure Was Nil The Ao Denied The Benefit Of Accumulation To The Assessee 16 On Appeal By The Assessee The Cit A Confirmed The Order Of The Ao Hence Ground No 4 Raised By T He Assessee Before The Tribunal 17 The Issue To Be Decided Is Therefore As To Whether For The Purpose Of Computing Accumulation Of Income Of 15 Under Section 11 1 A Of The Act One Has To Take The Gross Receipts Or Gross Receipts After Expenditure Fo R Charitable Purpose I E The Net Receipts This Is Issue Is No Longer Res Integra And Has Been Decided By The Special Bench Mumbai In The Case Of Bai Sonabai Hirji Agiary Trust Vs Ito 93 Ltd 0070 Sb The Facts In The Aforesaid Case Were That The Asses See Was A Public Charitable Trust Enjoying Exemption Under S 11 Of The It Act As Per The Requirement Of S 11 1 Of The It Act As It Prevailed At That Point Of Time The Assessee Had To Apply 75 Per Cent Of Its Income For The Objects And Purposes Of The Trust And The Assessee Was Permitted To Accumulate Or Set Apart Up To 25 Per Cent Of Its Income Which Was Subject To Fulfillment Of Other Conditions While Calculating The Aforesaid 25 Per Cent The Important Question Which Arose Was As To Whether For Th Is Purpose The Gross Income Earned By The Assessee Is Relevant Or The Income As Computed In Accordance With The Provisions Of It Act In Other Words Whether Outgoings From Out Of Gross Income Which Are In The Nature Of Application Of Income Should Be Fi Rst Deducted From The Gross Income And 25 Per Cent Of Only The Remaining Amount Should Be Allowed To Be Accumulated Or Set Apart The Special Bench Of The Itat On The Issue Held As Follows 9 Coming To The Merits Of The Issue We Are Of The View That Th E Same Is Clearly Covered By The Decision Of The Honble Supreme Court In The Case Of Cit Vs Programme For Community Organization Supra In The Decision Their Lordships After Taking Note Of Provisions Of Sec 11 L A Have Held As Under Having Re Gard To The Plain Language Of The Above Provision It Is Clear That A Charitable Or Religious Trust Is Entitled To Accumulate Twenty Five Per Cent Of Its Income Derived From Property Held Under Trust For The Present Purposes The Donations The Assessee Re Ceived In The Sum Of Rs 2 57 376 Would Constitute Its Property And It Is Entitled To Accumulate Twenty Five Per Cent Thereout It Is Unclear On What Basis The Revenue Contended That It Was Entitled To Accumulate Only Twenty Five Per Cent Of Rs 87 010 F Or The Aforesaid Reasons The Civil Appeal Is Dismissed It Is Clear From The Above That Deduction Of Twenty Five Per Cent Was Held To Be Allowable Not On Total Income As Computed Under The It Act Any Amount Or Expenditure Which Was Application Of Incom E Is Not To Be Considered For Determining Twenty Five Per Cent To Be Accumulated Their Lordships As Noted Earlier Affirmed The Decision Of Kerala High Court In 1997 141 Ctr Ker 502 1997 228 Itr 620 Ker Supra Wherein It Is Held As Under At The Outset The Statutory Language Of S U I A Of The It Act 1961 Relates To The Income Derived By The Trust From Property The Trust Is Required To Be Wholly For Charitable Or Religious Purposes And The Income Is Expected To 26 It A No 1224 Bang 201 5 Have Relation To The Ex Tent To Which Such Income Is Applied To Such Purposes In India It Is Thereafter The Statutory Provision Proceeds Further That Such Income Is Not To Be Understood To Be In Excess Of 25 Per Cent Of The Income From Such Properties In Other Words The Very L Anguage Of The Statutory Provision Under Consideration Sets Apart 25 Per Cent Of The Income From The Source Of Property With Reference To The Extent To Which Such Income Is Applied For Such Purposes Charitable Or Religious In Other Words For The Purpose Of S Ii I A Of The Act The Income In Terms Of Relevance Would Be The Income Of The Trust From And Out Of Which 25 Per Cent Is Set Apart In Accordance With The Spirit Of The Statutory Provision This Means That When It Is Established That Trust Is En Titled To Full Benefit Of Exemption Under S 11 1 The Said Trust Is To Get The Benefit Of Twenty Five Per Cent And This Twenty Five Per Cent Has To Be Understood As Income Of The Trust Under The Relevant Head Of S 11 1 In Other Words Income That Is N Ot To Be Included For The Purpose Of Computing The Total Income Would Be The Amount Expended For Purposes Of Trust In India Their Lordships In The Above Case Have Emphasized On The Clear And Unambiguous Language Of S 11 1 A And Decided The Matter On Th E Basis Of The Same It Has Been Held That As Per The Statutory Language Of The Above Section The Income Which Is To Be Taken For Purpose Of Accumulation Is The Income Derived By The Trust From Property If Both The Decisions Are Carefully Read It Becom Es Evident That Any Expenditure Which Is In The Shape Of Application Of Income Is Not To Be Taken Into Account Having Found That Trust Is Entitled To Exemption Under S 11 1 We Are To Go To The Stage Of Income Before Application Thereof And Take Into Ac Count 25 Per Cent Of Such Income Their Lordships Have Pointed That The Same Has To Be Taken On Commercial Basis And Not Total Income As Computed Under The It Act Their Lordships In The Decided Case Rejected The Contention Of The Revenue That The Sum Of Rs 1 70 369 Which Was Spent And Applied By The Assessee For Charitable Purposes Was Required To Be Excluded For Purpose Of Taking Amount To Be Accumulated Having Regard To The Clear Pronouncement Of Their Lordships Of The Supreme Court It Is Difficult To Accept That Outgoings Which Are In The Nature Of Application Of Income Are To Be Excluded The Income Available To The Assessee Before It Was Applied Is Directed To Be Taken And The Same In The Present Case Is Rs 3 42 174 Twenty Five Per Cent Of The Above Income Is To Be Allowed As A Deduction Similar View Has Also Been Taken By The Honble Madhya Pradesh High Court In Parsi Zorastrian Anjuman Trust Vs Cit Supra No Reason Whatsoever Has Been Given By The Revenue Authorities For Deducting Rs 2 17 126 In This Case For Purposes Of S I 1 1 A The Decision Cited On Behalf Of The Revenue Did Not Take Into Account The Decision Of The Supreme Ita No 367 Bang 2015 Page 10 Of 11 Court Referred To Above The Circular Of Cbdt Has Also Been Considered By T He Honble Kerala High Court In Its Decision Referred To Above Accordingly The Question Referred To Is Answered In The Affirmative And In Favour Of The Assessee 18 The Aforesaid Decision Clearly Supports The Plea Of The Assessee Following The Same We Hold That The Accumulation U S 11 1 A Of The Act Should Be Allowed As Claimed By The Assessee Ground No 4 Raised By The Assessee Is Accordingly Allowed 27 It A No 1224 Bang 201 5 11 Following The Decision Of The Co Ordinate Bench Of The Tribunal We Set Aside The Order Of The Cit A Following The Decision Of The Co Ordinate Bench Of This Tribunal We Decide This Issue In Favour Of The Assessee And Direct The Assessing Officer To Consider The Allowable Accumulation Of Income At 15 Of The Gross Receipts 18 1 Ground No 11 Is Regarding Setting Off Excess Application Of Income Of Assessment Year 2 010 11 Against The Income Of The Assessment Year 2011 12 18 2 At The Time Of Hearing The Learned Authorised Representative Stated That The Assessee Does Not Press This G Round And The Same May Be Dismissed 18 3 On The Other Hand The Learned Departmental Representative Has Not Objected To Dismissal Of The Ground 18 4 Accordingly We Dismiss The Ground No 11 As Not Pressed 19 1 Ground Nos 12 13 Are Regarding D Isallowance Of Deduction Of Rs 7 58 82 285 Being The Liability For Capital Expenditure The Assessing Officer Has Made Disallowance Of Claim Of Capital Expenditure To The Tune 28 It A No 1224 Bang 201 5 Of Rs 7 58 82 285 Which Shown As Increase In The Liability For The Capital Expe Nditure On The Ground That This Was Not An Actual Expenditure Incurred By The Assessee The Assessee Submitted That The Debt Balance Of The Various Party Accounts Included In The Sundry Creditors Account To The Tune Of Rs 1 07 58 875 Representing The Adv Ance Payment Made To The Parties To Be Reduced From The Loan Funds The Authorities Below Did Not Accept The Claim Of The Assessee On The Ground That No Evidence Was Submitted By Way Of Details Of Those Parties To Whom Advances Have Been Given By The Asse Ssee Further The Purpose Of Advances And Nature Of Transaction Was Also Not Supported By The Evidence Accordingly They Doubted The Genuineness Of The Claim 19 2 Before Us The Learned Authorised Representative Has Submitted That Even If The Amount Has Been Ear Marked And Allocated For The Purpose Of Institution It Will Be Deemed To Have Been Applied For Its Purpose As Held By The Honble Allahabad High Court In The Case Of Cit Vs Radhaswami Satsung 25 Itr 472 He Has Further Contended That The A Ctual Payment Is Irrelevant For The Purpose Of Finding Out Whether There Ha S Been An Application Of Fund And If The Liability For Expenditure Has 29 It A No 1224 Bang 201 5 Been Incurred It Would Be Sufficient As Held By The Honble Andhra Pradesh High Court In The Case Of Cit Vs Trustees Of Heh The Nizam S Charitable Trust 131 Itr 497 The Learned Authorised Representative Has Further Contended That The Assessee Has Offered The Income On Mercantile Basis And Part Of Receipts Are Not S Till Received By The Assessee Trust During Th E Year Then The Deduction Aginst Such Income Which Was Not Received During The Year Should Have Been Allowed In Respect Of Computing The Quantum Of Application Of Income On Account Of Expenses On Due Basis 19 3 On The Other Hand The Learned Depar Tmental Representative Has Relied Upon The Orders Of The Authorities Below And Submitted That The Assessee Has Failed To Prove The Purpose Of Amount To Be Incurred By The Assessee And Further The Details Of The Parties To Whom It Was To Be Paid Against The Said Expenses Were Not Furnished Therefore In The Absence Of Necessary Details The Claim Of The Assessee Cannot Be Accepted 30 It A No 1224 Bang 201 5 19 4 We Have Considered The Rival Submissions And The Relevant Material On Record The Dispute Is Regarding The Claim Of Capital Expenditure Which Was Shown As A Liability And Not Actually Paid During The Year Under Consideration The Assessee Also Claimed That The Advances Have Been Made To The Parties In Respect O F The Prospective Expenditure H Owever The Authorities B Elow Have Given The Finding That The Nature Of Transaction And The Details Of The Parties To Whom The Advances Have Been Claimed To Have Been Given Has Not Been Furnished By The Assessee So Far As The Actual Payment Is Concerned The Issue Is Settled By The Judgment Of Honble Allahabad High Court As Well As Honble Andhra Pradesh High Court As Referred Above However In The Case Of The Assessee The Assessing Officer As Well As The Cit Appeals Has Doubted The Expenditure La Id Out By The Assessee Whet Her By The Payment Or Of Credit Therefore We Are Of The Considered Opinion That This Issue Require A Proper Verification On Production Of The Relevant Evidence And Details By The Assessee Accordingly This Issue Is Set Aside To The Record Of The Assess Ing Officer For Proper Verification And 31 It A No 1224 Bang 201 5 Examination Of The Record To Be Produced By The Assessee And Then Decide The Same As Per Law 20 In The Result The Appeal Of The Assessee Is Partly Allowed Order Pronounced In The Open Court On The 13 Th Day Of Ju Ly 2 01 6 Sd Inturi Rama Rao Accountant Member Sd Vijay Pal Rao Judicial Member Reddy Gp Copy To 1 Appellant 2 Res Pondent 3 C I T 4 Cit A 5 Dr Itat Bangalore 6 Guard File By Order Asst Registrar Itat Bangalore