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2016 (6) TMI 48 - ITAT CHENNAI

2016 (6) TMI 48 - ITAT CHENNAI - [2016] 47 ITR (Trib) 787 - Exemption u/s 11 - whether the amount was expended wholly for charitable activities and in accordance with the purpose for which it was given by the donor - Held that:- The basic purpose of foreign contributions for activities on health and education. The agreement was entered in Canada on April 1, 2006, referred at page 28 of the paper book and there is no fresh evidence filed as its forming part of the assessment record and in the nat .....

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parent facts, evidence, activities and the FCRA provisions and clarificatory explanation of the learned authorised representative and duly signed documentary proof, we are not inclined to interfere with the order of the Commissioner of Income-tax (Appeals) who has dealt exhaustively vis-a-vis explanations and clarification and we confirm the same. - Decided against revenue - I. T. A. No. 107/Mds/2015 - Dated:- 27-4-2016 - Chandra Poojari (Accountant Member) And G. Pavan Kumar (Judicial Member) F .....

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earned Commissioner of Income-tax (Appeals) erred in deleting the addition of ₹ 1,54,66,312 holding that the amount was expended wholly for charitable activities and in accordance with the purpose for which it was given by the donor ; 2.2 The learned Commissioner of Income-tax (Appeals) failed to observe that as per the agency agreement entered into between the asses see and the donor, M/s. Sri Narayani Charitable Foundation, Calgary, Canada (annexure A ), the donation requires to be spend .....

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sioner of Income-tax (Appeals) failed to take note that the amended and restated agency agreement does not bear any date and it does not make any mention of school/hospital running. 3.3 The learned Commissioner of Income-tax (Appeals) ought to have appreciated the fact that the said agreement only speaks about improve ment on Sripuram Spiritual Park. 4.1 The learned Commissioner of Income-tax (Appeals) erred in allowing new evidence produced by the assessee in the form of a letter from the presi .....

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urn of income on October 10, 2006, declaring nil income. The trust was constituted on November 6, 1995, and registered under section 12AA of the Act with the Director of Income-tax (Exemptions), Chennai, vide order in DIT(E) No. 2(310)98-99, dated December 21, 1999. Subsequently, the case was selected for scrutiny and assessment was completed under section 143(3) of the Act. Further, the Assessing Officer issued a notice under section 148 of the Act based on the information of Form FC-3 on forei .....

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Narayani Charitable Foundation (SNCF), Canada. The agreements consists of two parts, agreement one relates to construction of Sripuram Temple and other being charitable activities engaged by the assessee as referred at page 2 of the order as under : Schedule A Scope of agency contract 1. Feed the people (Narayani Seva) programme (See exhibit A for further description of programme) 2. Prayer ceremony (pua) programme (See exhibit A for further description of programme) 3. Temple revival (Jyothi Sw .....

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A for further description of programme) 9. Any other programmes which provide the necessities for personal and spiritual growth . The assessee was further issued a show-cause notice for application of foreign contribution towards creation of hospitals/school assets, and they are not covered under the specific direction of the donor, SNCF, Canada. As per the programmes mentioned in agreement 2, the welfare measures activities are carried on by the assessee-trust. The learned Assessing Officer bas .....

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rmation of the FCRA account. The learned Commissioner of Income-tax (Appeals) considered the submissions and dealt with details and facts and accepted the reasons on spending the contribution on activities of the trust referred exhaustively at page 3 to 12 and observed at page 12 of the order where the assessee-trust has submitted a letter from the president of the donor agency (SNCF) dated April 15, 2014, confirming the scope of the agency agreement covering the expenditure towards the construc .....

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he Canadian resource agency website and, hence, of the view that it should be added as unaccounted income. Apart from the extract of the website which is not an admissible evidence either as a primary evidence or secondary evidence, no other evidence is available on the file of the Assessing Officer to come to the conclusion regarding the receipt of ₹ 5,56,47,742 by the assessee. On the other hand, it is not disputed that all the funds were received only through proper banking channels and .....

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e donor. The amount has to be spent on nine specific tasks as per schedule A to the agreement and does not bear any date of agreement. The learned Commissioner of Income-tax (Appeals) admitted new evidence produced by the assessee in nature of letter from the president of Sri Narayani Charitable Foundation, Canada and prayed for set aside the order of the Commissioner of Income-tax (Appeals). 6. On the other hand, the learned authorised representative relied on the order of the Commissioner of I .....

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for the activities mandated by the Canadian donor and further the agency agreement does not bear signature. The learned authorised representative drew our attention to page 15 of paper book evidencing the amended agency agreement which contains the terms of engagement and activities requirements to be followed as per schedules A and B and this specific agreement was entered on April 1, 2006. The contention of the learned Departmental representative that the agreement was not signed is incorrect .....

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conducted as per the conditions agreed with the Canadian donor. The learned authorised representative drew attention to the letter dated April 15, 2014, received from the Candian donor intimating directly to the Deputy Director (Exemptions), Chennai, with clarifications on the expenditure and scope of agency agreements at page 56 of paper book as under : The general agency agreement executed on February 1, 2002, contains in schedule A-Scope of agency contract, clause 4 : Health programme. This .....

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