TMI Blog2020 (9) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... tantamount to a charitable purpose. The aforesaid concurrent findings of fact have been recorded by the CIT(Appeals) as well as Income Tax Appellate Tribunal on the basis of meticulous appreciation of evidence on record. No perversity could be pointed out in the aforesaid concurrent findings of fact. Therefore, in the fact situation of the case, the first substantial question of law in fact, does not arise for consideration as the assessee was carrying on charitable activity. Provisions for doubtful debts allowed as a expenditure even though the same is not written off and the same is continued as a provision in the assessee's books - HELD THAT:- It is well settled in law that income of the trust has to be computed in a normal commercial manner and only the real income has to be taken into account. The loss of sale of investment is not allowable in computing the income for the purposes of Section 11 of the Act. [See: 'COMMISSIONER OF INCOME TAX- III vs. RAJASTHANI AND GUJARATI CHARITABLE FOUNDATION, POONA [ 2017 (12) TMI 1067 - SUPREME COURT] ]. As submitted a remand report, however, AO did not offer any comment with regard to additional evidence adduced by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of reference, facts from I.T.A.No.415/2011 are being referred to. Facts leading to filing of these appeals briefly stated are that the assessee is a Trust and has been incorporated with an object to provide educational, medical relief to the poor and to provide services of general public utility. For the Assessment Year 2004-05, the assessee filed the return of income on 31.03.2006, by which total expenditure of ₹ 23,46,79,122/- was shown over income. The assessee claimed a sum of ₹ 17,04,250/- being a provision for bad and doubtful debts. The assessment was re-opened under Section 147 of the Act by issuance of notice under Section 148 of the Act dated 31.01.2007, which was served on the assessee on 02.02.2007. The assessee by a communication dated 28.02.2007, requested return of income filed on 31.03.2006 as response to notice under Section 148 of the Act. The Assessing Officer by an order dated 31.12.2007 inter alia held that free food, which was claimed to have been distributed to the weaker section of public in general by the assessee was not substantiated by producing any evidence. It was further held that the assessee distributed 'Prasada' to the visit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciated that purpose of making an advance to a party has to be made in the course of business and then only the assessee is entitled to write off the same as expenditure as provision for bad and doubtful debt. In the instant case, the assessee has failed to demonstrate that the amount paid to Jadu Works Private Limited was made in course of business. In support of his submissions, reliance has been placed on decision of the Supreme Court in 'VIJAYA BANK VS. COMMISSIONER OF INCOME-TAX AND ANOTHER', (2010) 323 ITR 166 (SC). 4. On the other hand, learned counsel for the assesses submitted that prior to amendment of Section 153 by Finance Act, 2005 which came into force with effect from 01.04.2006, the aforesaid provision mandated that no order of assessment shall be made under Section 143 or Section 144 at any time after expiry of two years from the end of Assessment Year, in which income was first assessable. It is further submitted that the amendment incorporated by Finance Act, 2005 with effect from 01.04.2006 is not applicable to the fat situation of the case as the Assessment Years in question are 2004-05 and 2005-06. It is further submitted that the Finance Act, 2005 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INCOME-TAX, KARNATAKA-I VS. SOCIETY OF THE SISTERS OF ST.ANNE', (1984) 146 ITR 28 (KAR), and 'K.P.VARGHESE VS. INCOME-TAX OFFICER, ERNAKULAM AND ANOTHER', (1981) 131 ITR 597 (SC). 6. We have considered the submissions made by learned counsel for the parties and have perused the record. Admittedly, the assessee is a charitable institution registered under Section 12A of the Act. The Supreme Court in 'COMMISSIONER OF INCOME TAX VS. ANDHRA CHAMBERS OF COMMERCE', (1965) 55 ITR 722 held that an object beneficial to a section of public is an object of general public utility. It has further been held that in order to serve a charitable purpose, it is not necessary that the object should be to the benefit of whole of mankind or all the persons in particular country or state and it is sufficient, if the intention is to benefit a section of the public as distinguished from a specified individual is present. The aforesaid view was reiterated with approval in AHMEDABAD RANA CASTE ASSOCIATION supra. On the touchstone of aforesaid well settled legal position, even if the order of the Assessing Officer is seen, it can be deciphered from para 7 of the order that 'prasada ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of objects of the Trust is the application of income and even if the assessee has earned income from selling the land for achieving objects of the Trust, the same would be allowable under Section 11 of the Act. The Tribunal has also held that as per prevalent accounting principles which clearly lay down that loss on sale of investment should be taken into account while determining the commercial income, the assessee is entitled to expenditure in respect of provision for doubtful debt. Accordingly, the aforesaid substantial question of law is answered against the revenue and in favour of assessee. The concurrent findings of fact on both the substantial questions of law have been recorded by the Commissioner of Income Tax (Appeals) as well as Income Tax Appellate Tribunal on the basis of meticulous appreciation of evidence on record. No perversity could be pointed out in the aforesaid concurrent findings of fact. It is well settled in law that until and unless perversity is pointed out in the concurrent findings of fact, this court in exercise of powers under Section 260A of the Act cannot interfere with the concurrent findings of fact. In view of our answer to the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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