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Income Tax Appellate Tribunal, DELHI “C” BENCH: NEW DELHI
Before: SHRI G.S.PANNU & SHRI KUL BHARAT
PER KUL BHARAT, JM :
The present appeal filed by the assessee for the assessment year 2013-14 is directed against the order of Ld. CIT(A), Ghaziabad dated 22.03.2018. The assessee has raised following grounds of appeal:- 1. “That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not allowing an amount of Rs.l,06,22,916/- with regard to repayment of secured loan as application of income and that too without considering the submissions of assessee and by recording incorrect facts and findings and in violation of principles of natural justice.
2. That in any case and in any view of the matter, action of Ld. CIT(A) in not allowing an amount of Rs.l,06,22,916/- with regard to repayment of secured loan as application of income, is bad in law and against the facts and circumstances of the case.
Year : 2013-14] 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.11,64,686/- on account of cash deposits by treating the same as anonymous donation u/s 115BBC and taxing at MMR and that too by recording incorrect facts and findings and in violation of principles of natural justice.
4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs.11,64,686/- on account of cash deposits, is bad in law and against the facts and circumstances of the case.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A, 234B and 234C of Income Tax Act, 1961.
That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”
Facts giving rise to the present appeal are that the assessee society filed its return of income on 23.09.2013 declaring income at NIL. Thereafter, the case of the assessee was selected for scrutiny and assessment u/s 143(3) of the Income Tax Act, 1961 (“the Act”) was framed vide order dated 19.02.2016. The Assessing Officer while framing the assessment recorded the fact that the assessee was registered u/s Societies Act with the Registrar of Society U.P. vide certificate No.063/1969-70 dated 24.04.1969 and was also granted registration u/s 12A of the Act, by Ld.CIT, Meerut vide order dated 16.04.2008. The society is engaged in running of educational institutions. As per income and expenditure account, the total receipt during the year was declared at Rs.7,98,23,252/- against which the application of income was claimed at Rs.7,37,17,758/-. It was further observed
Year : 2013-14] by the Assessing Officer that the assessee claimed capital expenditure of Rs.14,20,110/- and depreciation of Rs.1,13,96,863/-. As per the Assessing Officer, the assessee had wrongly claimed depreciation of Rs.1,13,96,863/- on account of application of income for charitable purposes which, as per the Assessing Officer, was not allowable as the capital expenditure on acquiring fixed assets had already been allowed in respective years. The Assessing Officer during the course of assessment proceedings, asked the assessee to file the source of cash deposits of Rs.11,64,686/- reflected in AIR information. It was noticed by the Assessing Officer that the assessee had not produced any other documents in support of cash deposits of Rs.11,64,686/- except the receipt book. Therefore, the Assessing Officer treated the cash deposits as anonymous donation and tax at Maximum Marginal Rate u/s 115BBC of the Act. Thus, the Assessing Officer computed the taxable income of the assessee of Rs.42,83,462/- against the NIL income declared by the assessee.
Aggrieved against this, the assessee preferred appeal before Ld.CIT(A) who after considering the submissions, partly allowed the appeal of the assessee. Thereby, Ld.CIT(A) allowed the claim of depreciation and rest of the additions were sustained.
Aggrieved against this, the assessee is in appeal before this Tribunal.
Ground Nos. of appeal 1 & 2 are against not allowing an amount of Rs.1,06,22,916/- with regard to repayment of secured loan as application of income. Ld. Counsel for the assessee submitted that this issue has not been adjudicated by Ld.CIT(A).
Year : 2013-14] 6. Per contra, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below.
We have heard the rival contentions and perused the material available on record. Ld.CIT(A) has decided the issue in para 5.2 of the order, observing as under:-
5.2. “Ground No.2: The appellant has challenged disallowance of repayment of secured loan by the Assessing Officer of Rs.1,06,22,916/-. During the course of appellate proceedings no specific submission has been given and it is noted that this ground of appeal does not emerge from the order challenged before undersigned hence same is not adjudicated.”
8. From the above, it is clear that as per Ld.CIT(A), this issue did not arise from the impugned assessment order. However, in the re-joinder, Ld. Counsel for the assessee took us through the revised computation of income where the assessee had claimed a sum of Rs.1,06,22,916/- as repayment of secured loan. However, the Assessing Officer while computing the income had left this claim. From the computation, it is evident that the Assessing Officer had not considered the same. Therefore, the impugned order is set aside on this issue and the issue is restored back to the file of Assessing Officer for decision afresh in accordance with law and after giving adequate opportunity to the assessee of being heard.
9. Ground Nos. 3 & 4 of the assessee’s appeal are against the confirming the action of Ld. Assessing Officer in respect of addition of Rs.11,64,686/- made on account of cash deposits by treating the same as anonymous donation u/s 115BBC of the Act and taxing at Maximum Marginal Rate.
Year : 2013-14] 10. Ld. Counsel for the assessee submitted that the authorities below were not justified in rejecting the claim of the assessee as the assessee had provided all the information before the authorities below. Ld. Counsel for the assessee submitted that the assessee during the course of the assessment proceedings had furnished requisite supporting evidences. An affidavit of the Secretary of the assessee society in respect of the source of cash deposit in saving account of the assessee society was filed. He took us through the Paper Book to buttress his arguments that relevant evidences were produced before the authorities below. He pointed out at page 53 that the assessee had filed cash book, receipt book and vouchers. He also pointed out at page 54, the secretary had stated that the amount of cash was deposited in respect of fee receipts from students, miscellaneous other receipts out of the sale of old newspapers were deposited in cash.
On the contrary, Ld. Sr. DR opposed these submissions.
We have heard the rival contentions and perused the material available on record. The Revenue has not disputed the fact that during the assessment proceedings, the assessee society had furnished the details of cash deposited in its bank account. The Revenue has also not disputed that the Secretary of the society in his affidavit, stated that the cash deposit related to fee receipts from the students and the miscellaneous receipt out of sale of old newspapers. Therefore, in our considered view, without bringing any contrary material on record, the authorities below were not justified in making the addition and confirming the same. Therefore, the Assessing Officer is hereby directed to delete this addition. Thus, Ground Nos. 3 & 4 of the assessee’s appeal are allowed.
Year : 2013-14] 13. Ground No.5 raised by the assessee is against the charging of interest u/s 234A/234B of the Act.
This ground being consequential in nature. We hold accordingly. Thus, this ground of assessee is dismissed.
Ground No.6 raised by the assessee is general in nature, needs no separate adjudication.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 29th April, 2022.