9911796707
TMI Blog2017 (5) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... fit motive of the society and impugned order has been passed by recording incorrect facts and findings and without providing adequate opportunity of hearing. 3. That the assessee craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other. 3. The brief facts of the case are that assessee filed its return of income on 31.3.2013 declaring NIL income and the same was processed as such. The case of the assessee was selected for scrutiny and statutory notices u/s. 143(2) of the I.T. Act, 1961 was issued on 24.9.2013. In response to the same the Assessee's AR attended the proceedings. Thereafter the case was transferred to other Assessing Officer due to change of jurisdiction w.e.f. 15.11.2014. Accordingly, notices u/s. 142(1)/129 of the I.T. Act, 1961 alognwith detailed questionnaire were issued on 5.12.2014, but nobody attended the case on the fixed date. Thereafter, the case was again fixed by the AO by issuing notices u/s. 142(1) of the I.T. Act, 1961. In response thereto, the A.R. of the assessee attended the proceedings from time to time and furnished some details/ information. The Assessing Officer examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society has been filing returns of income since 2001. Copies of its returns of income for earlier years and subsequent years are enclosed in the paper book together with copies of assessment orders including assessment order passed u/s 143(3) in which exemption u/s 10(23C)(iiiad) has been allowed by the department. It is submitted that appellant's society runs educational institutions and surplus is not distributed and cannot be distributed to anybody and is used for the purpose of expansion. Funds are strictly kept and utilized as per the objectives of the society and in the modes prescribed u/s 11 (5) of the Act. Capital investments are made keeping in view the objectives of the society and therefore, merely because there is surplus, it cannot be said that society exists for the purpose of profit. In fact after utilization towards the capital expenditure, there is no surplus as is evident from the plain reading of the assessment order itself. Any surplus by disregarding the capital expenditure cannot be said to be valid and justified as held in the following judicial decision:- * Pine Grove International Charitable Trust Vs. UOI, 327 ITR 73 (P&H). Therefore, case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cognized modes prescribed u/s 11(5) under the Income Tax Act, 1961. Therefore there cannot be any objection on this score. Moreover, funds have to be kept so that when the need for capital investment arises, it can be used. If there are interest incomes, there cannot be any grievance on that score. 4. Ld. A.O. has mentioned that trustees of the trust are from one family. In reply, it submitted that appellant is a trust and there is no prohibition that the trustees cannot be from one family. Therefore all the objections of Ld. A.O. are misplaced and are not, recognized under the Income Tax Act. Observations of Ld. CIT(A) are met as under:- 1. Ld. CIT(A) has mentioned that appellant has charged an aggregate amount of Rs. 3,43,702/- as medical fund from the students and also in the earlier year against which the expenses on medical are negligible and thus according to Ld. CIT(A), appellant is interested in profit. In reply, it submitted that medical funds on 621 nos. of students is quite reasonable and if there are not expenditure on that score, how can it be said that profit is being earned when such amounts are kept in the recognized bank so that any contingency that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is clear that the receipts and Profit percentage of the Trust is increasing every year and Trust is creating assets outside the school premises run by the Trust and not for purpose of the school run by the Trust. The Trust has purchased land for Rs. 48.80 lacs in Distt. Palwal during the year under consideration and also purchased land in next year as per sale deed filed by the assessee, detail is given below:- Date of Sale deed Land Measurement Amount of Sale deed 01.02.2012 6 kanal 11 marla Rs. 28,65,700/- 01.02.2012 1 kanal 15 marla Rs. 7,65,700/- 14.06.2012 6 kanal Rs. 25,00,000/- 12.03.2014 1 kanal 18 marla Rs. 8,00,000/- 8.3. We note that the Trust is running a school in Sector - 5, Gurgaon, whereas the land has been purchased in Distt. Palwal which is on far distance from this school. The purpose of the purchase of land was asked from the assessee and he simply told that the purpose of land is to open new school, but no evidence was filed in this regard. 8.4 Besides the above land, the Trust has also purchased the following FDRs from Bank:- 1. Syndicate Bank 3 lac 23.04.2008 2. Syndicate Bank 5 lac 19.03.2011 3. Syndicate Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X
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