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2020 (1) TMI 501 - ITAT KOLKATAExemption u/s 11 - Accumulation of income - Net income determination of assessee trust - AO allowing deduction of 15% on the net income after deduction of administrative expenses - assessee is enjoying registration u/s. 12A - whether 15% accumulation for application in future has to be calculated on gross receipt or net receipt after deduction of revenue expenditure - assessee claimed accumulation of income for application for charitable purpose at 15% of the gross receipts - HELD THAT:- Respectfully following the aforesaid Tribunal’s decision in Bhagwan Mahaveer Memorial Jain Educational & Cultural Trust [2019 (8) TMI 1194 - ITAT BANGALORE] hold that the accumulation u/s. 11(1)(a) of the Act should be allowed as claimed by the assessee. This ground of appeal of assessee is allowed. Disallowance u/s. 69C - Application of income for purchase of blankets as bogus - HELD THAT:- We find force in the contention of the assessee that neither the statement of shri S L Dugar was recorded in the presence of the assessee nor opportunity to cross-examine shri Dugar was provided to the assessee by the AO. The AO ought to have given a copy of the statement recorded by him and provided adequate opportunity to the assessee to cross-examine the maker of the statement if it is adverse against him. However, it is noted that Shri S. L. Dugar became a director only on 01.02.2016 of the 2 companies from which assessee purchased blankets and distributed the same, and the assessment under consideration is AY 2013-14. So, the AO when verifing the facts of this AY 2013-14, ought to have summoned the director/manager of this AY 2013-14, who would be in a better position to throw light on the facts which he was enquiring. So, I set aside the impugned order of Ld. CIT(A) and remand this issue back to the file of AO to de novo adjudicate/assess the issue and give proper opportunity to cross-examine the concerned director/manager of three companies, if the AO is relying on their statement. Genuineness of the donation for a charitable activity - HELD THAT:- The competent authority in the year 1974 has been pleased to grant the 12A registration. Among the objectives narrated above, it is noted that assessee is engaged for promoting education and for providing marriage expenses for the girls of the needy poor families and also for giving Sadabrat to the poor and giving donation to the poors and for establishing, takeover, grant, maintain, assistance, support, hospitals, charitable dispensaries, maternity homes etc. Here, we note that the assessee had given by way of donation to Lohia Matri Seva Sadan Maternity Charitable Organisation which is established for taking care of the pregnant women/ladies. Taking care of the poor ladies who are in labour and for running maternity ward for the poor women is a charitable activity and for which the assessee has lent its hands by giving donation of ₹ 7 lakhs and the evidence for giving donation has been filed along with supporting documents viz., bank statement etc. So, when the genuineness of the donation for a charitable activity could not be controverted by AO then the amount used as application of the income of the assessee is definitely an allowable expenditure. This ground of appeal of assessee is allowed.
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