TMI Blog2020 (6) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition of the same u/s 2(15) of the Act and eligible for exemption u/s 11/12 of the Act. Ground No.1 raised by the Revenue is, therefore dismissed. Corpus donation - There were separate receipt books for collecting the corpus donations which was marked with the stamp Bhumi Kharidane Hetu Dhan Seva and all donations collected under these receipts had been categorized as corpus donations by the assessee, which amount was kept in a separate bank account, separate from the general donation and also that FDRs had been made from the same which were subsequently used in subsequent years for purchase of land through issuance of cheques and drafts. The Ld.CIT(A) has also noted the fact that the assessee had maintained separate record of general donation and corpus donation and that its accounts were duly audited. CIT(A), we find, has further noted that the observation of the AO that there were no specific directions by the donor for treating the donation as corpus donation, was based on mis-appreciation of facts since the receipts referred to by the AO for basing his observation were relating to general donations and not corpus and donations. DR has been unable to controv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in allowing the appeal of the assessee by allowing exemption o the assessee u/s 11/12 of the Income Tax Act despite the fact that the activities of the assessee were not covered u/s 2(15) of the Act. ii. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in allowing the appeal of the assessee ignoring the fact that the donations amounting to ₹ 13,₹ 8,82,040/- were not corpus donations as the same were received without any specific direction. iii. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in allowing the claim of capital expenditure incurred during the year to the assessee ignoring that the exemption u/s 11/12 of the Act was rightly denied to the assessee. iv. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the amount of ₹ 12,35,40,420/- assessed by the AO allowing exemption to the assessee u/s 11/12 of the Act which was rightly denied by the AO. v. That the appellant craves to leave, add or amend any grounds of appeal on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfill the conditions prescribed u/s 11/12 of the Act to avail the same. He accordingly, treated the entire corpus donation as the income of the assessee and further denied the claim of utilization for purchase of land to the assessee. Accordingly the AO assessed an amount of ₹ 12,35,40,420/- as income of the assessee liable to taxation. 4. Before the Ld.CIT(A) detailed arguments were made by the assessee, reproduced at para 4.3 of the order, after considering which the Ld.CIT(A) allowed the assessee s appeal in entirety, including its claim of exemption u/s 11/12 of the Act, the treatment of its donations claimed as corpus donations and the claim of utilization of donations for purchase of land. 5. Aggrieved by the same, the Revenue has come up in appeal before us. 6. In ground No.1 the Revenue has challenged the allowance of claim of exemption u/s 11/12 of the Act by the Ld.CIT(A), despite allegedly the findings of the AO that the activities of the assessee were not charitable. The findings of the Ld.CIT(A) allowing the above claim of the assessee are at para 4.4 of the order, which are reproduced hereunder: 4.4 I have perused the rival contentions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ety is eligible for exemption u/s 11 of the IT Act. 7. We do not find any infirmity in the order of the Ld.CIT(A). We find that the Ld.CIT(A) on appraising all the evidences placed before him has arrived at the finding that the assessee is eligible for exemption u/s 11/12 of the Act.The Ld.CIT(A) has noted that the assessee had been granted registration as charitable society u/s 12A of the Act on the basis of the same aims and objects which the AO has now found to be not in the nature of charitable as defined u/s 2(15) of the Act. He has also noted the fact that this registration has not been revoked till date. The Ld.CIT(A) has also found that the assessee has all along been allowed exemption u/s 11/12 in scrutiny assessment in the past and subsequent years also. He further also has noted that there is no change with respect to the nature of the activities in the impugned year as compared to the earlier and subsequent years. Even otherwise on merits, the Ld.CIT(A) has noted the fact that the assessee had been incurring expenditure of ₹ 20,02,167/- on running of school which being for the purpose of education qualified as charitable activities u/s 2(15) of the Act and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show the bifurcation. I also find that it is not disputed that the donations for land were deposited in separate bank accounts designed for the purpose and later FDRs were made to maintain this corpus fund that was utilized for purpose of land and assets in subsequent years through cheques and drafts. I find that the appellant has maintained separate books for the general and corpus donation. The receipt books used for corpus donation were marked with stamp of Bhoomi kharidaney hetu Dhan Sewa and receipts where no purpose has been specified and only mention that amount is received towards Sewa, were credited under Satsang Sewa or general donation. This receipts issued show the purpose for which donation is received. 4.7 Further, as explained by appellant in its submissions reproduced above, out of a list of 10 donors mentioned in assessment order whose confirmations were sought by A.O, the A.O. selectively chose to reproduce confirmations regarding general donation received from two persons while ignoring the confirmations received from the others who have confirmed that the donation was made for the purpose of purchase of land. I also find that receipts of monthly corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the Ld.CIT(A has perused the records of the assessee produced before him and on perusing the same had given a categorical finding of fact that the corpus donations received were received with the specific direction as such. The Ld.CIT(A, we find, has noted that there were separate receipt books for collecting the corpus donations which was marked with the stamp Bhumi Kharidane Hetu Dhan Seva and all donations collected under these receipts had been categorized as corpus donations by the assessee, which amount was kept in a separate bank account, separate from the general donation and also that FDRs had been made from the same which were subsequently used in subsequent years for purchase of land through issuance of cheques and drafts. The Ld.CIT(A) has also noted the fact that the assessee had maintained separate record of general donation and corpus donation and that its accounts were duly audited. The Ld.CIT(A), we find, has further noted that the observation of the AO that there were no specific directions by the donor for treating the donation as corpus donation, was based on mis-appreciation of facts since the receipts referred to by the AO for basing his observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 11 to 13 of the IT Act. Thus these grounds of appeal are allowed. The AO is directed to give relief to appellant accordingly. 13. On going through the same, we find that the Ld.CIT(A) has noted from the documents and evidences and books of accounts of the assessee produced before him that the utilization by the assessee for purchase of land was out of general donation received and not out of corpus donation and that the AO had mis-appreciated the facts in this regard while not allowing the claim of the assessee. The said factual findings of the Ld.CIT(A) have not been controverted before us, nor has the Ld.DR made any arguments before us as to why the disallowance be upheld. The AO, we have noted had made the disallowance noting that the same had been made out of corpus donation which did not qualify as such, but since the Ld.CIT(A) has given a finding of fact that the investment in land had been made out of general donations, which fact has remained uncontroverted before us, We see no reason to interfere in the order of the Ld.CIT(A) allowing the claim of the assessee of utilization of amount incurred for purchase of land for the purposes of claiming exemption u/s 11/12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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