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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Shri Rajpal Yadav & Shri Amarjit Singh
PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This revenue’s appeal for A.Y. 2004-05, arises from order of the CIT(A)-9, Ahmedabad dated 20-05-2015, in proceedings under section 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short “the Act”.
The solitary ground of appeal of the revenue is against the decision of ld. CIT(A) in deleting the addition of Rs. 6982002/- on account of assessment donation and Rs. 11 lacs on account of foreign currency donation made by the assessing officer.
I.T.A No. 2442/Ahd/2015 A.Y. 2004-05 Page No 2
The fact in brief is that the assessee is a charitable trust registered u/s. 12AA of the act. The assessee trust has filed its return of income on 27th October, 2004 declaring its income at Rs. Nil. Thereafter, the case of the assessee trust was reopened u/s. 14A of the act of the by issuing of notice u/s. 148 of the act on 29th March, 2011. The case was reopened on the ground that assessment donation amounting to Rs. 6982002/- and FC donation worth Rs. 11,82,000/- appeared in the annual report but was absent from the books submitted before the charity commissioner. On query, the assessee has submitted that regarding assessment donation of Rs. 6982002/-, the head office collect administration charges from each Mandali belonging to the assessee trust for administration work carried out by the head office and the same amount credited under the head assessment donation in the books of head office wherein each Mandali debits such administration charges paid to head expenses. The assessee trust stated that the total assessment debited to respective Mandali statement was of Rs. 7722134/-. However, assessment donation was credited to head office statement of Rs. 6982002/- the difference of Rs. 740132 was due to FC donation received by the head office from respective Mandalies. So actual assessment donation to be charged from respective mandalies. 6982002/- was shown as income and Rs. 740132 was shown as FC donation in head office statement of account. It is further stated that total FC donation of Rs. 1100800 was shown as income in head office statement of account. The assessing officer has not accepted the explanation of the assessee and held that the said amount has escaped assessment and treated as anonymous u/s. 115BBC of the act and added to the total income of the assessee of Rs. 80,82,800/-
I.T.A No. 2442/Ahd/2015 A.Y. 2004-05 Page No 3 (assessment donation amounting to Rs. 6982002/- and FC donation of Rs. 1100800/-)
The assesee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee.
We have heard the rival contentions and perused the material on record carefully. The assessee is a charitable trust which is registered u/s. 12AA of the act. It was the regular practice of the trust to publish only audited head office annual report and to submit consolidated accounts with the Charity Commissioner and the assessing officer during the course of assessment. Regarding assessment donation of Rs. 692002/- as per detailed record it is noticed that head office collect administration charges from each Mandali for assessment work carried out by the head office and the same amount is credited under the head assessment donation in the books of head office whereas each mandali debit such administration expenses. At the end of the year an consolidation of financial statements of head office and 81 Mandalies the income shown by the head office was squared off against the expenses shown by Mandali. In the consolidation financial year statement separate break up assessment donation shown as income at head office and assessment expenses shown by mandalas as expenses were not shown. It is demonstrated from the material on record that assessment donation debited to respective Mandalies at Rs. 7722134/- as assessment expenses in their books whereas head office has credited the same into two parts (i) Rs. 6982002/- has been credited to assessment donation account (ii) Rs. 740432/- has been credited to foreign contribution donation account
I.T.A No. 2442/Ahd/2015 A.Y. 2004-05 Page No 4 because the same amount has been received from Mandali in foreign currency. It is also noticed that foreign contribution bank account has been maintained only at the head office, therefore, cheque of donation received by Mandali in foreign currency were given to the head office for depositing in the F.C. bank account. In view of the aforesaid facts, we are of the view that assessing officer has not considered these facts and added the aforesaid amount on assumption basis which is not correct. Regarding other part of addition of Rs. 11,00,800/- in respect of foreign contribution donation, it is found that the break-up of this amount is as under:- (a) F.C. Donation received for respective Mandalies was adjusted by respective 740132/- mandnlies against Assessment to be paid to Head Office (b) Block Grant Received winch is shown as Income under 250000 "Donations" head - as per Annexure-13 of consolidated statement (c) F.C. Donation received for Christmas gift is to be distributed to pastors of 110668/- churches. The same is deducted from Christmas Gift expenses in consolidated statement of account and net expenditure is shown under head Expenditure towards the object of the Trust Total F.C. Donation shown in Head Office Account 1100800/-
In this connection, on the material on record, it is noticed that as per form FC-3 the assessee has filed with Ministry of Home Affairs, New Delhi contained detail of donation, detail of name and address of doner and purpose for which the donation was given in foreign currency. We have also gone through the finding of ld. CIT(A) which is reproduced as under:- “5.3 I have carefully considered the submissions made by the A.R. of the appellant and comments of Id.A.O. in the matter and remand report dt 23/04/2015. Appellant furnished audited statement of account of H.O. and copy of consolidated statement of account of 81 mandalies (branches) except H.O. account. Appellant submitted each Mandali has to be contributed certain amount to H.O. for administration work carried out by H.O. Assessment donation is income and Assessment expenses is nothing but internal transfer of some amount from Mandalies (branches) to H.O. It is not an actual income of the appellant trust as a whole. The assessment amount is some part of income/receipts of Mandalies out of consolidated total donation income of Rs.2,95,68,847/- as per consolidated statement of account which has already been declared as income under the head
I.T.A No. 2442/Ahd/2015 A.Y. 2004-05 Page No 5 Income from Other Sources. Appellant contended that Assessment donation amount is not chargeable to tax when main source of income is already in the computation of income. Appellant had shown assessment donation of Rs.77,22,134/- shown in H.O. statement as under: 1) Assessment Donation Rs.69,82,002/- 2) F.C. donation received in H.O. from respective Mandalies which is adjusted against Assessment to be given Mandalies to H.O. Rs. 7,40,1327- TOTAL: Rs.77,22,134/-
Appellant submitted details of F.C. Donation of Rs.11,00,800/- as under: 1) F.C. donation received in H.O. for respective Mandalies which was received by Mandalies In foreign currency (supported by Form FC-3 Filed with Ministry of Home Affairs, New Delhi Rs.7,40,132/- 2) Block grant received from Church of Rs.2,50,000/- North India, Synod, New Delhi 3) Pastor"s Christmas Gift Donation received Rs. 1,10,668/- Church of North India, Synod, New Delhi Total Rs. 11,00,800/- The appellant submitted that it filed Form FC-3 with Ministry of Home Affairs, New Delhi which contains amount of donation, details of name and address of donor and purpose for which the donation was given in foreign currency. The appellant also submitted Head Office statement of account, ledger account of assessment donation, 81 Mandalies (branches) Consolidated Statement of Account and Consolidated Statement of Income and Expenditure account as a whole for F.Y. 2003-04 duly audited. After considering the entirety of facts and perusal of various details/supporting evidences furnished by the appellant, I am inclined to agree with the appellant. The addition made by the A.O. in the assessment order against Assessment donation of Rs.69,82,002/- and F.C. donation of Rs.11,00,800/-aggregating to Rs.80,82,802/- is deleted. This ground of appeal raised by the appellant is allowed.”
In the light of the above facts and circumstances, we do not find any infirmity in the aforesaid finding of ld. CIT(A), therefore, this appeal of the revenue is dismissed. Order pronounced in the open court on 21-02-2019 (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 21/02/2019
I.T.A No. 2442/Ahd/2015 A.Y. 2004-05 Page No 6 आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:-
Assessee
Revenue
Concerned CIT
CIT (A)
DR, ITAT, Ahmedabad
Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील"य अ"धकरण, अहमदाबाद