TMI Blog2015 (12) TMI 1762X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed. Taxability of the corpus fund is concerned, we direct the Assessing Officer to decide the issue afresh as per the provisions of the law. In so far as the claim of expenditure is concerned the Assessing Officer is directed to verify whether the amount is given as advance or charged to the P&L Account, after giving a reasonable opportunity of being heard to the assessee and decide this issue as per the provisions of the law. - ITA No. 352/MUM/2014, ITA NO.1336/MUM/2014 - - - Dated:- 16-12-2015 - SHRI N.K.BILLAIYA, ACCOUNTNT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER Assessee by : Shri N.K.Agarwal Revenue by : Shri Vivek Batra ORDER PER N.K.BILLAIYA,AM: ITA No.352/Mum/2014 1336/Mum/2014 are cross appeals by the assessee and the Revenue against the very same order of the CIT(A)-37, Mumbai dated 20/12/2013 for the assessment year2003-04. As both these appeals have common grievance relating to the same set of facts in issue, therefore, they were heard together and disposed of by this common order for the sake of convenience. 2. As a registered Trust, assessee is engaged in various philanthropic activities as per Trust Deed. Pursuance to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on non-existent repairs through known aid of the Trustees by way of book entry. Finding huge sums being spent on such repairs of a building, which was not owned by the assessee, the Assessing Officer added back the entire expenditure of ₹ 30,71,330/-. Since the exemption under section 11 was denied, the corpus donation of ₹ 30,49,279/- was also added back. 3.2 Aggrieved by this, the assessee carried the matter before the CIT(A) and vehemently submitted that the assessee is very much entitled for the claim of exemption and it is an erroneous assumption that the assessee is hit by the provisions of section 13(3) of the Act. It was stated before the CIT(A) that the assessee has not violated any conditions of Section 11 r.w.s. 13 of the Act and, therefore, denial of exemption is bad in law. After considering the facts and the submissions, the CIT(A) called for a remand report and in his remand report the Assessing Officer reiterated what has been stated in the assessment order. 3.3 On the issue of siphoning of the funds, it was brought to the notice of the CIT(A) that the Assessing Officer has incorrectly stated that ₹ 33,71,019/- was paid to the Engineering Maz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 13(1)(c) r.w.s. 13(3) of the Act, therefore, there is no question of taking shelter behind the provisions of section 13(1)(d) of the Act. Drawing our attention to the various clauses of the Trust Deed, the Ld. DR pointed out that the Trust Deed does not authorize the Trust to lend money to anyone. Thus, the assessee has violated its own Trust Deed. Ld. DR strongly relied upon the findings of the Assessing Officer. 6. We have given a thoughtful consideration to the rival submissions. We have also gone through the orders of the authorities below and the relevant documentary evidences and have considered the judicial decisions relied upon. There is no denial that the assessee has given loan to two Mazdoor Sabhas. There is also no denial that the Trustees of the assessee happen to be the final beneficiaries as mentioned at Para-3. Let us see the conduct of the assessee in the light of the provisions of section 13(1)(c) r.w.s. 13(3)of the Act, which are as under:- Section 13(1)(c) (c) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof- (i) if such trust or institution has been created or established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Trustees have been benefited directly or indirectly clearly violating the conditions. 6.1 The claim of the Ld. Counsel is that it is covered by the provisions of section 13(1)(d) of the Act. The relevant portion of the said section read as under:- Section-13(1)(d):- (d) 1 in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof, if for any period during the previous year- (i) any funds of the trust or institution are invested or deposited after the 28th day of February, 1983 otherwise than in any one or more of the forms or modes specified in sub- section (5) of section 11; or (ii) any funds of the trust or institution invested or deposited before the 1st day of March, 1983 otherwise than in any one or more of the forms or modes specified in sub- section (5) of section 11 continue to remain so invested or deposited after the 30th day of November, 1983 ; or These clauses referred to the amount invested or deposited otherwise, than the modes specified in section 11(5) of the Act. We fail to understand how a loan amount given to two Mazdoor Sabhas fit into the category of making investment or ..... 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