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2008 (8) TMI 497 - ALLAHABAD HIGH COURTCharitable Purposes- The respondent-assessee is a trust registered under section 12A of the Act. During the period April 1, 1996, to March 31, 1996, relevant to the assessment year in question, i.e., 1996-97 it had received 111 plots of land by way of gift/donation from 46 donors. All the 46 donors had purchased the land, which they had gifted, through registered sale deeds sometimes during the period 1992-94. They had gifted the land by way of registered gift deeds and the value of the plots so gifted came to be Rs. 3,35,39,387. The assessee incurred an expenditure of Rs. 49,51,161 towards purchase of stamp papers and registration charges for execution of the gift deeds. The assessing authority added the amount towards the value of the land and expenses as unexplained investment under section 69 of the Act. The Com missioner of Income-tax (Appeals) deleted the addition which order has been affirmed by the Tribunal. Held that- dismissing the appeal, (i) that there was no question of unexplained investment in the acquisition of the plots in question which had been received by way of gift. The Tribunal had rightly upheld the deletion of the additions so made. (ii) that the amount of Rs. 14,74,350/- had been given by the assessee to a trust which was also registered under section 12A of the Act. The donation given by one trust to another trust is treated as an expenditure for religious and charitable purpose under the Act and therefore, could not be added under the head “Income from other sources”. (iii) That with regard to the sum of Rs. 5,50,000/- it had to be noted that the assessee was a very big trust and had a large following and if on some occasion it had distributed some cash to poor persons it could not be said that the expenditure was not incurred; more so when the Tribunal had recorded a finding that the expenditure was actually incurred. The amount was not assessable in the hands of the trust.
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