TMI Blog2020 (1) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... r on conjectures and surmises and hence in the interest of justice we are inclined to partly set aside orders passed by the authorities below and to remand back the issue qua addition to the file of the AO for decision afresh while taking into consideration the amount received by the assessee and its utilization as to whether the same and upto what extent has been utilized by the assessee for the construction of temple and/for achieving the aims and objects of the society. Whether the assessee has earned any income in its hand. Further as to whether the society has changed its aims and objects at any point of time at the time of filing the return for the relevant AY 2014-15 and before declining and grant of registration u/s 12AA of the Act. If the AO will find that the amount of donation has been spent for the construction of temple, then the Assessee shall be entitled to claim the amount to that extent as capital receipts in nature. Consequently the issue qua addition is remanded to the file of the assessing Officer for decision afresh on the basis of observations and analyzations made above and in the light of decision of tribunal in the case of Income Tax Officer, Dharamshala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so showed that the society is in process of purchasing land for Shree Baba Gajja Ji Jain Community Centre , however it is evident that during the assessment year 2014-15, the assessee society is not registered u/s 12AA of the Act, therefore not entitled for exemption u/s 12AA r.w.s. 11 of the Act. Ultimately, the Assessing Officer made the addition of ₹ 1,24,64,864/- in the income of the assessee. Further the Assessing Officer also made an addition of ₹ 319586/- as surplus income (net profit) of the assessee. The Assessee challenged the said additions before the Ld. CIT(A) who vide impugned order upheld the same on the ground that the assessee society is neither registered u/s 12AA nor u/s 10(23C) of the Act and therefore rightly assessed as AOP by the AO. 3. The assessee being aggrieved, challenged the impugned order passed by the Ld. CIT(A) on both the addition, however at time of argument emphasized on the addition qua donation only, hence we are restricting our decision to the issue qua addition of ₹ 1,24,64,864/- only. 4. Having heard the parties at length and perused the material available on record. The assessee while relying on the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le and used the same donation specifically for the purpose of construction only. Thus no income accrues or arises to the assessee and no material has been brought on record that the assessee started doing any activity which yielded any income to the assessee. The word association means to join in common purposes, or to join in an action . Therefore, association of persons , as used in Income Tax Act, means an association in which two or more persons join in a common purpose or common action and as the words occurs in Income Tax Act, which imposes a tax on income, the association must be one the object of which is to produce income, profits or gains. We rely upon the decision of the Hon'ble Supreme Court in the case of CIT Vs. Indira Balkrishna [39 ITR 546 (SC)]. The learned CIT (Appeals) considering the material on record gave a specific finding of fact that the assessee society was meant for charitable and religious purposes and was totally devoted to the Buddhist temple/monastery in the year under consideration. The assessee was thus at the stage of construction of the temple and has not carried out any other profession or occupation for earning the income. Therefore, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in the nature of income . The coordinate bench while relying upon the order passed by the ITAT Bench At Agra in the case of ITO v. M/s Gaudiya Granth Anuved Trust, Mathura (in ITA No. 386/Agra/2012) order dated 2nd August, 2013 further held because in that case as well, the society was not registered u/s 12AA of the Act, and therefore the issue covered in favour of the assessee by the above order of the ITAT Agra Bench . 8. Coming to the instant case, admittedly during the assessment year under consideration, the appellant society was not registered u/s 12AA of the Act, however it is a fact that the appellant society has shown the amount of ₹ 1,24,64,864/- as on 31st March, 2014 as opening balance in the corpus fund account/capital account. Further appellant society has shown the amount of ₹ 1,04,63,627/- {99,33,000/- on account of land account and ₹ 5,30,627/- on account of building ( work in progress )}. It is undisputed fact that since 26.09.2013 the date of formation of society and till date, the appellant society is having and pursuing the same aims and objects as are mentioned below: To carry on religious and charitable projects such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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