TMI Blog2013 (8) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the relevant period. Donor was a non-resident - To strengthen the claim of the assessee regarding the genuineness of the corpus donation further documents like bank statement of the donor and ITR of donor 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 donations were received by cheques from none other than the settler of the trust - assessee was able to discharge the onus by proving the identity of the donor and also the genuineness of the transaction. No adverse inference can be drawn regarding the capacity of the donor - Decided in favour of assessee. Exemption u/s 11 & 12 - Charitable activity or not - Held that:- assessee trust was doing charitable activities during the relevant period also. The Assessing Officer himself conducted thorough examination of the activities for the Assessment Year 2005-06 and 2007-08. There is no change 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 - The assessee is a trust enjoying the benefit of registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee 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 account of corpus donation treating the same as otherwise taxable u/s 68 of the Income-tax Act, 1961; (ii) in not admitting additional evidence submitted at the time of hearing thereby denying the appellant the due, proper and adequate opportunity of proving its claim. Both the above actions being misconceived, erroneous 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 towards corpus fund from Shri Yash Pal Chabra. Shri Chabra was a non-resident Indian and also the settler and a trustee of assessee. Ld. AR submitted that the Assessing Officer drew his own conclusion without appreciating the documents filed before him and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of receipts, cheque number along with the bank statement, ITR and Permanent Account Number of the donor and confirmation from the donor were also filed. These donations were received by cheque. Thus, the assessee has discharged the initial onus on it. The 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 submitted list of donor with address. The donor was NRI. The copy of income tax returns acknowledgement was filed in India was also filed. Assessing Officer wrongly analyzed this acknowledgement for drawing conclusion about the capacity of donor. Donor could not be produced before Assessing Officer as he was out of India during relevant time. The amount was paid by cheque. Not claiming 80G by donor in return of income on donation amount, could not be viewed otherwise. Admittedly, 75% of the donations are applied for charitable purposes and Ld. AR submitted that in such a situation, the addition was unjustified. The CIT (A) himself had held that assessee as charitable trust. The corpus donation was specifically exempted u/s 11(1)(d) of the Act. Therefore, such additions are not justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber (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 outside India during the relevant period. Donor was a non-resident. In our considered view, non- production of donor for reasons stated could not be made a basis for adverse inference. Identity of the donor was beyond doubt as he himself was a settler and trustee of the assessee trust. To strengthen the claim of the assessee regarding the genuineness of the corpus donation further documents like bank statement of the donor and ITR of Shri Yash Pal Chabra 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 donations were received by cheques from none other than the settler of the trust. 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 the transaction. No adverse inference can be drawn regarding the capacity of the donor. Keeping these facts in view, we hold that the CIT (A) was not justified in sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT (A) had granted the relief by holding as under :- "4. Ground No.3 4 are against the action of AO wherein, he denied benefit of exemption u/s.11 12 holding that activities of the trust are in accordance with the provision of section 2(15). In this regard, in the appellant's own case for A.Y.2005-06 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 activities. On the basis of remand report dated 28.7.2011, assessee has been held as involved in charitable activity in A.Y.2005-06 2007-08. As activities of the appellant remains same, benefit of 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 conclusion that the assessee trust was doing charitable activities during the relevant period also. The Assessing Officer himself conducted thorough examination of the activities for the Assessment Year 2005-06 and 2007-08. There is no change in the facts for this year and the Assessing Officer has not brought out any specific instance which goes contrary to the finding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 with the request to give the rent to the assessee trust w.e.f. 01.06.2007. However, assessee could not make full and final payments as agreed upon to Shri Yash Pal Chabra, therefore, property was transferred 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 effected by Shri Yash Pal Chabra. The assessee also returned the security deposited 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 credited Shri Yash Pal Chabra on account of rent received from M/s. Fab India since this rent was never belonged to the assessee and it was received on behalf 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. Therefore, 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 security deposit was returned back to Shri Yash Pal Chabra as assessee could not adhere to the terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, it is found that appellant was not able to controvert the findings of the AO given in the assessment order. So in my considered opinion, additions made by AO remains conclusive. Therefore, addition made on account 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/-) addition on account of security deposit of Rs.15,60000/- are confirmed. Ground No.5, 6, 7 8 are dismissed." The assessee is a trust enjoying the benefit of registration 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 activities during the year under consideration. During the year, the assessee trust entered into a property transaction. The facts regarding the transaction can be summarized as under :- The property at First Floor, Centrino Plaza, Plot No.8, Pocket 4, Section I, MLU, Dwarka, New Delhi-110075 was purchased by Shri Yash Pal Chabra from M/s. SSPB Construction Pvt. Ltd. vide agreement 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 Chabra transferred t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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