TMI Blog2022 (12) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... not accepted the explanation on the ground that only upon the Department raising a query, the assessee had shifted the figures of Building and Development Fund to Income and Expenditure Account, as an after thought. The assessee was called upon to produce the details of the persons, who had contributed for Building and Development Fund. Assessee replied stating that the records were misplaced and an FIR dated 08.03.2001 was lodged. The Assessing Officer has also noticed that though the assessee had claimed that an FIR was lodged on 08.03.2001, revised Balance Sheet, Income and Expenditure Account were drawn subsequently and filed along with an Audit Certificate, which was not possible without the Books of Accounts. In such circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. It claimed exemption under Section 10(22) and Section 11 of the Income Tax Act, 1961 ('the Act' for short) for the A.Ys. 1995-96 to 1998-99. The Assessing Officer did not allow exemption under Section 10(22) of the Act on the ground that that the assessee-Trust was not solely for the educational purposes, but the trust was making profits. 3. It is the further case of the assessee that though the Trust Deed contained several objects, only the object to impart education was carried out. Assessee applied for amendment of the deed and obtained order dated March 24, 2012 from the City Civil Court, Bengaluru for deletion of the objects not related to education. 4. With effect from April 1, 1999, by the Finance (No.2) Act, 1998, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as capital receipts and subsequently, as an after thought, shifted the same to Income and Expenditure Account in the name of 'Fee collections'. Secondly that, when Trust was asked to produce the details of the addresses of persons contributing to the Building Development Fund, the Trust has replied that the documents relating to A.Y. 1995-96 to 1997-98 were lost and an FIR dated 08.03.2001 was filed with the Police. 7. Shri. Parthasarathy argued that the Assessing Officer has denied the benefit on mere surmises. The Assessing Officer had demanded for the details of the persons who had contributed. Since the documents were not available, the same could not be produced before the Assessing Officer. 8. Shri. Parthsarathy submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and perused the records. 12. The Assessing Officer has denied the benefit under Section 10(22) of the Act for following reasons. Firstly, that the objects of the Trust include commercial activity. Secondly, that Trust Deed provided for payment of Honorarium to the Trustees prohibited under Section 13(2) of the Act. Thirdly, that Trust collects abnormally high fees. Fourthly, for acquiring luxury vehicles. Fifthly, using the Trust funds for activities other than education. Sixthly, unexplained cash credit. 13. It is recorded by the Assessing Officer that assessee had filed two sets of documents (Balance Sheet, Income and Expenditure Account and Receipt and Payments Account), one with the return of Income and other with the Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for A.Y. 1995-96 as unexplained Cash credit under Section 68 of the IT Act. 16. Thus, the Stand taken by the assessee that contributions were received only from the students has been rightly rejected by the Assessing Officer. Further, the cash balance of Rs.1.30 Crores at the peak with petty cash being drawn on daily basis fortifies the view taken by the Assessing Officer that money was being utilized for some other purpose. 17. In the circumstances, no exception can be taken to the view taken by the Assessing Officer and the ITAT. 18. In the result, the following: ORDER (a) Appeal is dismissed. (b) The question of law is answered in favour of the Revenue and against the assessee. No costs. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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