TMI Blog2013 (11) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... contradictory order – Reliance has been placed on the Apex court judgment in the case of Kapurchand Shrimal Vs. CIT, [1981 (8) TMI 2 - SUPREME Court], wherein it was held that it is the duty of the Appellate Authority to correct the lacunae in the order of the authorities below and if needed remand the matter - Remitted the issue raised in the Cross Appeals to the file of the Ld. CIT(A) to consider the issue afresh. - ITA No. 2167 &2496/DEL/2011 - - - Dated:- 8-11-2013 - Shri Shamim Yahya And Shri C. M. Garg,JJ. For the Petitioner : Sh. C. S. Aggrawal, Sr. Advocate with Sh. Gautam Jain, CA For the Respondent : Mrs. Renuka Jain Gupta, Sr. D.R. ORDER Per Shamim Yahya: AMN These cross appeals by the Revenue and Assessee emanate out of the order of the Ld. CIT(A) dated 28.2.2011 and pertain to assessment year 2005-06. 2. The grounds raised in the Revenue's appeal read as under:- "1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 1,82,14,817/- when the same was shown by the assessee itself in its Income and Expenditure A/c and the assessee has been denied benefits u/s. 11 12 of the Act which has been up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustification for the Ld. Officer to deny the claim of exemption under section 11 12 of the Act. 1.6 That the Ld. CIT(A) has further failed to appreciate that once registration u/s. 12A has been granted by the Ld. CIT(A) and thereafter, it is beyond the province of the Ld. Officer to reject the claim of exemption under section 11 of the Act by looking into objects of the trust. 1.7 That the Ld. CIT(A) has also overlooked the fact that in the immediately preceding assessment year the ld. AO after due examination had accepted the claim of the assessee in as much as he has not held that, films were produced for commercial purposes and therefore denial of exemption is wholly unjustified. 2. That the Ld. CIT(A) has also erred both in law and on facts in holding that order of assessment was framed by granting valid and proper opportunity to the appellant. The findings so recorded is vitiated as it overlooks the factual matrix and, evidence on record and thus misplaced. 4. In this case pursuant to the show cause notice, the return of income was filed by the assessee on 10.5.2006 declaring total income at NIL, after claiming exemption of Rs. 1,66,00,108/- u/s. 11 of the I.T. Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of content and product of high quality video programme and dissemination through the lectures/ workshops and presentation through out India; that it was further deposed that they are at present in negotiation with various broad casters for broadcasting these video programmes; that Shri Ranade further deposed that in assessment year 2003-04, they had mostly done research work and set up the basic facilities but no production were completed and that in assessment year 2004-05 and 2005-06 most of the productions were done and that a complete list of programmes has been furnished vide letter dated 5.10.2007 in A.Y. 2004-05 and that it is not possible to segregate the year wise production as no such record is kept and that the list is the combined production for both the years and upto date i.e. May, 2005.; that Shri Ranade further stated that thereafter no production was carried out; that Regarding receipt from these sources it was deposed that there was no income / receipt out of these production / programmes till December, 2006 and from January, 2007 some income by way of Royalty is coming from sale of DVDs of 2 of the programmes. On being asked as to what was the reason to stop the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for commercial purposes; that these films produced in Asstt. Year 2004-05 and 2005-06 could not be released for charitable purposes even after several years of production is sufficient circumstantial evidence to suggest that there is no application of assessee income derived from property held under Trust for the charitable purpose. Hence, the Ld. AO held that the benefit of section 11 and 12 of the Act are not allowed. 4.6 Ld. AO further noted that the income and expenditure account showed receipt of donation of Rs. 1,82,14,817/-. The assessee was asked inter-alia to furnish the list of donors giving names, addresses of the donors, amount received, mode of payment received, giving details of cheque/Demand Draft and the date of receipt of the donation. Assessee supplied some information in this regard, but Ld. AO was not satisfied. He observed that donation received by cheque amounted to Rs. 47,06,368/- and for the remaining donation representing cash donation, there was no name and address of the donor. Therefore, Ld. AO observed that the identity and creditworthiness of the donors were thus not proved. Ld. AO's queried for information in this regard which were not complied wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llaneous Income as declared Rs. 2,01,336/- - Unexplained cash credit as per para (E) above Rs. 6,00,000/- Rs. 1,90,17,352/- Less : (Expenses attributable to earning of income as above) - Audit fee - 6681/- - Bank charges -3137/- - Membership fee - 500/- - Out of the claim of other - 5,00,000/ - Expenses in the absence of evidence as discussed in para (D) above, it is estimated That a sum of Rs. 5 lacs only are incurred wholly and exclusively for earning the above income - Rs. 5,10,318/- Assessable income Rs. 1,85,07,034/- Rounded off Rs. 1,85,07,030/- 5. Against the above order the Assessee appealed before the Ld. CIT(A). Before the Ld. CIT(A) assessee submitted a request to admit the additional evidences under Rule 46A. These were forwarded to the Ld. AO for his Remand Report. Upon receipt of the Remand Report from the Ld. AO, rejoinder from the assessee was also obtained. 5.1 Ld. CIT(A) noted that Ground No. 1 and 2 of the appeal was regarding denial of valid and proper opportunity to the assessee company. Considering the response of the assessee company in this regard, Ld. CIT(A) dismissed the Ground No. 1 2 of the assessee and held that assessment order wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submitted that the Ld. AO was not justified in denying the exemption u/s. 11 of the I.T. Act. 5.5 Considering the above, Ld. CIT(A) observed that while disallowing the benefit of Section 11 and 12 of the Act, Ld. AO has specifically discussed in the body of the assessment order and the Ld. AO has very specifically and categorically incorporated various facts on record that the objects of producing the films was not a charitable purpose. In this regard, Ld. CIT(A) referred to the statements of four persons recorded by the Ld. AO. Ld. CIT(A) concluded that after considering the assessee's reply and finding of the Ld. AO, he was of the considered opinion, that facts brought on by the Ld. AO has not been rebutted by the assessee's counsel that various TV films that are being manufactured are commercial in nature. Therefore, the Ld. CIT(A) held that action of the AO deserves to be confirmed. Ld. CIT(A) further referred to the following judicial pronouncement namely Aman Shiv Mandir Trust vs. C.I.T. 296 ITR 415 (P H) wherein it was held as under:- "Held, dismissing the appeal, that it was not disputed that nothing was spent during the last give years on any charitable purpose. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he charitable trust to its charitable or religious purposes in India. This is, of course, subject to accumulation up to a specified maximum which, in the present case, was 25 percent. In the appeal that we are concerned with, it has been found as a matter of fact that the assessee had applied more than 75 per cent of the donations for charitable purposes as per its objects. To obtain the benefit of the exemption under section 11 of the Act, the assessee is required to show that the donations were voluntary. In the present case, the assessee had not only disclosed its donations, but had also submitted a list of donors. The fact that the complete list of donors was not filed or that the donors were not produced, does not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts. This is more particularly so in the facts of the case where admittedly more than 75 per cent of the donations were applied for charitable purposes. Section 68 of the Act has no application to the facts of the case because the assessee had in fact disclosed the donations of Rs. 18,24,200/- as its income and it cannot be disputed that all recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above order of the Ld. CIT(A), Revenue and Assessee both are in cross appeal before us. 7. We have heard both the counsel and perused the records. Revenue has raised the ground that Ld. CIT(A) erred in deleting the addition of Rs. 182,11,817/-, when the same was shown by the assessee itself in its income and expenditure a/c and the assesse has been denied benefits u/s. 11 12 of the Act which has been upheld by the Ld. CIT(T) as well. Further, it has been urged that Ld. CIT(A) erred in allowing the claim of expenditure of Rs. 184,77,745/- when the assessee has failed to furnish complete documentary evidence to substantiate the claim to fulfill its objective. 7.1 The assessee has raised the ground that Ld. CIT(A) has erred in holding that assessee is not entitled to claim exemption u/s. 11 12 of the I.T. Act. 7.2 In our considered opinion, Ld. CIT(A) has passed a contradictory order. Ld. CIT(A) has held that assessee has not been able to rebut the AO's finding that various TV films that are being manufactured are commercial in nature. Ld. CIT(A) has further held that assessee was not able to explain as to how it is involved is charitable activity. Ld. CIT(A) has affirme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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