The ACIT, 1 (1), v. M/s Mahendra Shiksha Samiti,

ITA 408/IND/2008 | 2004-2005
Pronouncement Date: 16-04-2010 | Result: Dismissed

Appeal Details

RSA Number 40822714 RSA 2008
Assessee PAN AAABM0344F
Bench Indore
Appeal Number ITA 408/IND/2008
Duration Of Justice 1 year(s) 7 month(s) 14 day(s)
Appellant The ACIT, 1 (1),
Respondent M/s Mahendra Shiksha Samiti,
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 16-04-2010
Date Of Final Hearing 08-04-2010
Next Hearing Date 08-04-2010
Assessment Year 2004-2005
Appeal Filed On 02-09-2008
Judgment Text
PAGE 1 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AAABM0344F I.T.A.NO.408/IND/2008 A.Y. : 2004-05 ACIT M/S.MAHENDRA SHIKSHA SAMITI 1(1) VS BHOPAL. BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SMT.APARNA KARAN SR.DR RESPONDENT BY : NONE DATE OF HEARING : 08.04.2010 O R D E R PER BENCH THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A)-I BHOPAL DATED 17.06.2008 FOR THE ASSESS MENT YEAR 2004-05. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER A N APPLICATION FOR ADJOURNMENT WAS SENT THROUGH FAX W HEREIN IT WAS MENTIONED THAT THE ASSESSEES COUNSEL HAD NOT PREPA RED THE CASE HENCE THE MATTER MAY BE ADJOURNED. IN THE VIEW OF THE BE NCH THIS WAS NOT A VALID REASON. HENCE THIS APPLICATION FOR ADJOURNME NT WAS REJECTED AND WE PAGE 2 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. PROCEEDED TO DECIDE THE MATTER ON MERIT AFTER HEARI NG THE LD. DEPARTMENTAL REPRESENTATIVE. 3. IN GROUND NO.1 THE REVENUE IS AGGRIEVED BY THE DE CISION OF THE LD. CIT(A) IN ALLOWING THE EXEMPTION TO THE ASSESSE E U/S 10(23C)(IIIAD) OF THE ACT. THE A.O. AFTER PERUSING THE OBJECTS OF THE ASSESSEE SOCIETY FOUND THAT IN ADDITION TO THE EDUCATIONAL ACTIVITIE S THE SOCIETY WAS ALSO HAVING ITS OBJECT TO DISSEMINATE AND SPREAD NATIONA L INTEGRATION INDIAN CULTURE AND SOVEREIGNTY ETC. IT WAS ALSO OBSERVED T HAT THERE WAS NO PROHIBITION ON UTILIZING THE FUNCTIONS OF EDUCATION AL ACTIVITIES FOR THE ABOVE PURPOSES. THE A.O. ACCORDINGLY HELD THAT SO CIETY WAS NOT EXISTING SOLELY FOR THE PURPOSE OF EDUCATION HENCE EXEMPTI ON U/S 10(23C)(IIIAD) COULD NOT BE GIVEN TO THE ASSESSEE. AGGRIEVED BY TH IS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHO F OUND THAT IN THE YEAR UNDER CONSIDERATION THERE WAS NO EVIDENCE AS REGA RD TO ASSESSEES ENGAGEMENT IN ANY ACTIVITIES OTHER THAN EDUCATIONAL ACTIVITIES AND SINCE THE RECEIPT OF THE ASSESSEE WERE ALSO LESS THAN RS. 1 CRORE. HENCE THE ASSESSEE WAS ENTITLED FOR EXEMPTION U/S 10(23C)(III AD) OF THE ACT. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. PAGE 3 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE A ND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. 6. IT IS NOTED THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE SOCIETY HAS ENGAGED ITSELF ONLY IN THE EDUCATIONAL ACTIVITIES. HENCE MERELY BECAUSE THE OBJECT CLAUSE OF THE ASSESSEE SO CIETY CONSISTS OF OTHER OBJECTS WHICH HAVE NOT BEEN PURSUED THE ASSESSEE SOCIETY CANNOT BE DENIED EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT. IN THIS VIEW OF THE MATTER WE CONFIRM THE FINDINGS OF THE LD. CIT(A). THUS TH IS GROUND OF THE REVENUE IS DISMISSED. 7. IN GROUND NO.2 REVENUE IS AGGRIEVED BY THE DECISIO N OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 5 50 000/- M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN. 8. THE FACTS IN BRIEF ARE THAT THE ASSESSEE SOCIETY TAKEN UNSECURED LOAN TO THE TUNE OF RS. 61 71 350/- FROM THE OFFICE R BEARERS THEIR FAMILY MEMBERS AND SOCIALLY CONNECTED PERSONS. THE A.O. FO UND THAT IN RESPECT OF FOUR LOANS AGGREGATING TO RS. 5.50 LAKHS THE AS SESSEE HAD NOT GIVEN COMPLETE DETAILS NOR THE DETAILS OF PAN NUMBERS WER E GIVEN. THE A.O. ALSO REQUIRED TO PRODUCE THE FOUR SUCH PERSONS WHI CH DID NOT APPEAR BEFORE THE A.O. IN THESE CIRCUMSTANCES THE A.O. TR EATED THE SAID LOAN AS NON-GENUINE AND ADDED THE SAME U/S 68 TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE BEING AGGRIEVED PREFERRED AN APPEAL BEFORE THE PAGE 4 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. LD. CIT(A) WHEREIN IT WAS CONTENDED THAT THE CONFI RMATORY LETTER AS WELL AS COMPLETE ADDRESS WAS GIVEN TO THE A.O. IN THE CO URSE OF ASSESSMENT PROCEEDINGS. HENCE THE ASSESSEE HAD DISCHARGED ITS PRIMARY ONUS. IT WAS ALSO SUBMITTED THAT IF THE A.O. WAS NOT SATISFIED THEN THE A.O. COULD HAVE SUMMONED SUCH PERSONS DIRECTLY OR COULD HAVE CONDUC TED ENQUIRIES THROUGH INSPECTOR. IT WAS ALSO CONTENDED THAT THESE TRANSACTIONS WERE THROUGH BANKING CHANNELS AND ALL THESE PERSONS HAD SUFFICIENT AGRICULTURE INCOME. THE LD. CIT(A) FOUND THAT INITIAL ONUS CAST ON THE ASSESSEE WAS DULY DISCHARGED BY ADDUCING NECESSARY EVIDENCES TO PROVE IDENTITY AND CREDITWORTHINESS OF THE LENDER AS WELL AS THE GENUI NENESS OF THE TRANSACTION. THE LD. CIT(A) RELYING ON THE DECISION OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF ARAVALI TRADING CO. VS. I TO AS REPORTED IN (2008) 8 DTR 199 WHEREIN IT WAS HELD THAT MERELY B ECAUSE THE DEPOSITORS EXPLANATION ABOUT THE SOURCES OF MONEY W AS NOT ACCEPTABLE TO THE A.O. HELD THAT IT COULD NOT BE PRESUMED THAT TH E DEPOSIT MADE BY SUCH CREDITORS WAS MONEY BELONGING TO THE ASSESSEE UNLE SS SOME DOCUMENTARY EVIDENCES OR SOME MATERIAL WAS BROUGHT ON RECORD TO SUPPORT SUCH PRESUMPTION. ACCORDINGLY IN THE FACTS AND CIRCUMST ANCES OF THE CASE THE LD. CIT(A) HELD THAT THERE WAS NO MERIT IN THE ADDI TION MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THIS THE REVENUE I S IN APPEAL BEFORE US. PAGE 5 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. 9. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. 10. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 11. IT IS NOTED THAT OUT OF THE TOTAL ADVANCES OF RS. 42 81 350/- THE A.O. HAS NOT ACCEPTED THE LOANS WORTH RS. 5.50 LAKH S ONLY. IT IS FURTHER NOTED THAT IN RESPECT OF SUCH LOAN THE ASSESSEE HA S SUBMITTED SUCH LOAN THE ASSESSEE HAS SUBMITTED CONFIRMATORY LETTER AND ADDRESSES OF SUCH DEPOSITORS. IT IS FURTHER NOTED THAT IN ONE CASE T HE LOAN HAS BEEN IN JOINT NAME WHEREAS THE ASSESSEE HAS SUBMITTED PAN NUMBER OF ONE OF SUCH DEPOSITORS AND INSPITE OF THAT THE A.O. HAS NOT AC CEPTED GENUINENESS OF SUCH TRANSACTIONS WHICH IN OUR OPINION IS NOT A CORRECT VIEW AS ONE PAN NO. ITSELF LENDS CREDENTIALS TO THE TRANSACTION. IN OTHER CASES ALSO NO MATERIAL HAS BEEN BROUGHT ON RECORD OR TO SHOW THAT IT WAS THE UNDISCLOSED INCOME OF THE ASSESSEE SOCIETY WHICH W AS BROUGHT IN THIS MANNER. WE FURTHER FIND THAT THE A.O. HAS MERELY DI SBELIEVED THE EXPLANATIONS OF THE ASSESSEE. IN VIEW OF THESE FACT S WE HOLD THAT THE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED. H ENCE WE CONFIRM THE FINDINGS OF THE LD. CIT(A). PAGE 6 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. 12. IN GROUND NO.3 THE REVENUE IS AGGRIEVED BY THE DE CISION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 30 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED DEPOSIT S. 13. THE FACTS IN BRIEF ARE THAT THE A.O. FOUND THAT T HE ASSESSEE HAD RECEIVED RS. 6 LAKHS EACH FROM SIX PERSONS WHICH W AS SHOWN AS DEPOSITS IN THE BALANCE SHEET OF THE ASSESSEE. THE A.O. REQU IRED THE ASSESSEE TO EXPLAIN THE NATURE THEREOF AND TO PRODUCE THE PERSO NS ALONGWITH THE JUSTIFICATION OF THEIR SOURCES OF SUCH DEPOSITS. TH E ASSESSEE SUBMITTED CONFIRMATORY LETTERS WHEREIN PAN NUMBERS HAD NOT B EEN MENTIONED. THE ASSESSEE COULD NOT PRODUCE THE PERSONS NOR GAVE ANY FURTHER SUBMISSIONS HENCE THE A.O. HELD THAT THE ASSESSEE FAILED TO ES TABLISH THE GENUINENESS OF SUCH DEPOSITS AND CREDITWORTHINESS OF SUCH PERSO NS IN ADDITION TO THE IDENTITY OF THE CREDITORS HENCE HE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE SOCIETY AS UNEXPLAINED CREDITS. AGGRIE VED BY THIS THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHEREIN IT WAS SUBMITTED THAT THIS MONEY WAS TAKEN AS ADVANCE FROM SUCH PERSONS AGAINST THE SALE OF EXCESS LAND OWNED BY THE ASSESS EE SOCIETY TO FUND THE CONSTRUCTION OF SCHOOL BUILDING. HOWEVER DUE TO CE RTAIN UNAVOIDABLE REASONS THE TRANSACTION COULD NOT BE COMPLETED IN THE YEAR. HENCE SUCH AMOUNT WAS SHOWN AS DEPOSITS. IT WAS ALSO CONTENDED THAT AT THE TIME OF EXECUTION OF AGREEMENT TO SALE THE ASSESSEE WAS NO T REQUIRED TO COLLECT PAGE 7 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. THE INFORMATION OF THIS NATURE FROM THE PURCHASER A ND WHEN SUCH DETAILS WERE ASKED THE ASSESSEE SUBMITTED THE COMPLETE DET AILS. THE LD. CIT(A) AFTER EXAMINING THE DOCUMENTS PRODUCED BEFORE HIM HELD THAT THE A.O. HAD DISCHARGED THE ONUS CAST UPON THE ASSESSEE U/S 68 AND IF THE A.O. WAS NOT BELIEVING THE SAME. THE A.O. WAS UNDER OBLI GATION TO BRING SOME POSITIVE MATERIAL ON RECORD TO JUSTIFY THE STAND TH AT THE PROPOSED SALE OF LAND WAS A SHAM TRANSACTION. IT WAS ALSO HELD BY TH E CIT(A) THAT ALL SUCH PERSONS WERE ENGAGED IN AGRICULTURE ACTIVITIES HAD SUFFICIENT FUNDS IN THEIR BANK ACCOUNTS WHEREFROM SUCH MONEY HAD BEEN GIVEN TO THE ASSESSEE SOCIETY. HENCE THE CREDITWORTHINESS COULD NOT BE D OUBTED. IT WAS ALSO HELD THAT ADDITION IF ANY COULD HAVE BEEN MADE IN THE HANDS OF DEPOSITORS AND NOT IN THE HANDS OF THE ASSESSEE AND FOR THIS PROPOSITION THE LD. CIT(A) DREW SUPPORT FROM THE DECISION OF TH E HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF ARAVLI TRADING COMPANY (S UPRA). AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 14. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. 15. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 16. IT IS NOTED THAT IN THE YEAR UNDER CONSIDERATION T HE ASSESSEE SOCIETY HAS ENTERED INTO AN AGREEMENT FOR SALE OF E XCESS LAND OWNED BY IT PAGE 8 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. AS PER THE DECISION OF THE MANAGEMENT TO GENERATE F UNDS TO CONSTRUCT THE SCHOOL BUILDING. HOWEVER SUCH SALE TRANSACTION HAS NOT BEEN COMPLETED DURING THE YEAR UNDER CONSIDERATION. HENCE AMOUNTS SO RECEIVED HAD NOT SHOWN BY THE ASSESSEE AS DEPOSIT. IT IS ALSO NOTED THAT SUCH DEPOSITORS ARE AGRICULTURISTS WHO ARE HAVING SUFFICIENT RESOURCES AND HAVE ALSO GIVEN CONFIRMATORY LETTERS BEFORE THE A.O. THE MAIN REASO N FOR THE A.O. IS THAT NO PAN DETAILS WERE MENTIONED WHEREAS IN THE CASE O F AGRICULTURISTS NORMALLY SUCH PERSONS ARE NOT FILING RETURNS OF INC OME. HENCE NON- FURNISHING OF PAN DETAILS CANNOT RESULT INTO AN ADV ERSE INFERENCE AGAINST THE ASSESSEE. AS REGARD PRODUCTION OF SUCH PERSONS BEFORE THE A.O. IS CONCERNED GENERALLY SUCH PERSONS DO NOT COME FORWA RD AND ONLY ON FIRST DATE THERE HAS BEEN NON-COMPLIANCE AND THEREFORE NO ADVERSE INFERENCE CAN BE DRAWN FOR THIS REASON AS WELL. WE FURTHER FI ND THAT THE TRANSACTION OF SALE OF LAND HAS NOT BEEN FOUND TO BE SHAM. THUS TAKING INTO CONSIDERATION OVER ALL FACTS AND CIRCUMSTANCES OF T HE CASE WE HOLD THAT THE ORDER OF THE LD. CIT(A) IS CORRECT IN LAW. HENC E WE CONFIRM THE SAME. THUS THIS GROUND OF THE REVENUE IS ALSO DISM ISSED. 17. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PAGE 9 OF 9 - I.T.A.NO. 408/IND/2008 M/S.MAHENDRA SHIKSHA SAMITI BHOPAL. 18. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 16 TH APRIL 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :16 TH APRIL 2010. CPU* 812154