TMI Blog2020 (2) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, it could not be termed as that A.O. did not verify the fact of receipt of amount from the students and thereafter deposit in Bank Account. Why the cost of acquisition of the assets should not be disallowed and not considered as income of the assessee Trust? - Second issue is with regard to amount of two entries ₹ 1.5 crores, which assessee has explained that ₹ 1.56 crores was the amount received on sale of land through cheque, therefore, it could not be an undisclosed income of the assessee. Further, interest have been received which is also appearing in Form-26AS and disclosed to the Revenue Department as well. Therefore, figure of ₹ 2.18 crores noticed by the CIT(E) in the show cause notice under section 263 is incorrect. A.O. has considered the sale proceeds and expenditure incurred by the assessee including building fund etc., in the original assessment proceedings. CIT(E) also considered the issue of cost of acquisition, but, the A.O. in the subsequent Order in pursuance of Order under section 263 did not make any addition against the assessee on account of interest as well as cost of acquisition because the same was also considered and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure and surplus which was to the extent of 15%. The net taxable income was assessed at NIL vide Order Dated 10th October, 2016 under section 143(3) of the Income Tax Act, 1961. 3. The Ld. CIT(E) on examination of the assessment record found the assessment order to be erroneous insofar as prejudicial to the interests of revenue for the purpose of Section 263 of the Income Tax Act, 1961. Show Cause Notice was issued to the assessee under section 263 of the Income Tax Act, 1961, which is re-produced in the impugned order in which the Ld. CIT(E) noted that copy of the ITS details of the assessee are not available on record and have not been verified. Further cash deposit of ₹ 6,05,33,047/- on 31st March, 2014 in Jodhpur Branch of Axis Bank Limited, which have not been verified and details are not on record. Further as per the AIR information two entries of ₹ 1.55 crores have also not been verified by the A.O. The assessee has received interest income of ₹ 2.18 crores which have not been verified by the A.O. In the show cause notice, assessee was also directed to explain why the cost of acquisition of the assets to the tune of ₹ 1,25,03,287/- should no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as received interest income of ₹ 64,28,241/- on fixed deposit with the Bank, details of which are filed and is appearing in 26AS also. Assessee, therefore, explained that the A.O. passed the assessment order after discussing each and every matter, therefore, it is not a case of invoking Section 263 against the assessee. 4. The Ld. CIT(E), however, did not accept the contention of assessee and noted that A.O. has not verified all these items, therefore, Explanation-2 to Section 263 of the I.T. Act, 1961, is attracted. The assessment order was found erroneous and prejudicial to the interests of the revenue. Therefore, the assessment order was cancelled and A.O. was directed to pass the assessment order refresh, in the light of observations made in the impugned order. 5. We have heard the Learned Representative of both the parties and perused the material available on record. 6. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that the cash deposit of ₹ 6.05 crores as fees is part of total receipts of ₹ 16.66 crores, therefore, it is not an unexplained income of assessee, the details of which are fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further submitted that it is well settled Law where revisional authority opined that further enquiry was required, such enquiry should have been conducted by revisional authority himself to record findings that assessment order passed by the A.O. was erroneous and prejudicial to the interests of revenue. In support of the contention, he has relied upon Judgments of the Hon ble Delhi High Court in the case of DIT vs., Jyoti Foundation 357 ITR 388 (Del.) and Pr. CIT vs. Delhi Airport Metro Express Private Limited 398 ITR 8 (Del.) 7. On the other hand, Ld. D.R. relied upon the impugned order and submitted that assessee failed to explain source of the cash deposit in the Bank Account and filed comments of the A.O, in which it is highlighted that no enquiry have been made on these issues. The Ld. D.R. filed queries raised by the A.O. and copy of the Order Sheet on record. The Ld. D.R. relied upon Judgment of the Hon ble Supreme Court in the case of Daniel Merchants Pvt., Ltd., vs., ITO Dated 29.11.2017, Judgment of Calcutta High Court in the case of Rajmandir Estates Pvt., Ltd., vs., PCIT 287 CTR 512 (Cal.) which is confirmed by the Hon ble Supreme Court reported in 245 Taxman 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails regarding the donors and that it was just a way of introducing unaccounted money into the books of the assessee trust and thus treated the amount as cash credit under section 68 of the Act. The Tribunal held that since more than 75 per cent, of the donations received by the assessee was spent for charitable purposes, the addition was not justified. On appeal to the High Court : Held, dismissing the appeal, that to obtain benefit of the exemption under section 11 of the Act, the assessee was required to show that the donation was 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 had not been filed or that the donors had not been produced did not necessarily lead to the inference that the assessee had tried to introduce unaccounted money by way of donation receipts. This was shown in the facts of the case, where admittedly 75% of the donations were applied for charitable purposes. Section 68 of the Act had no application to the facts of the case because the assessee had in fact disclosed the donations of ₹ 18,24,200 as its income and it could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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