Income Tax Appellate Tribunal - Delhi
Mother India Foundation , New Delhi vs Assessee
ITA NO. 2167&2496/DEL/2011
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "E" NEW DELHI
BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
AND
SHRI C.M. GARG, JUDICIAL MEMBER
I.T.A. No. 2167/Del/2011
A.Y. : 2005-06
Income Tax Officer(E), vs. Mother India Foundation,
Trust Ward-IV, 3455, Krishna Niketan, Delhi
Delhi Gate, New Delhi - 110002
(PAN/GIR NO. : AAATM9211B)
(Appellant) (Respondent)
I.T.A. No. 2496/Del/2011
A.Y. : 2005-06
Mother India Foundation, vs. Income Tax Officer(E),
3455, Krishna Niketan, Delhi Gate, Trust Ward-IV,
New Delhi - 110002 (PAN/GIR NO. : Delhi
AAATM9211B)
(Appellant) (Respondent)
Assessee by : Sh. C.S. Aggrawal, Sr. Advocate
with Sh. Gautam Jain, CA
Department by : Mrs. Renuka Jain Gupta, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AMN These cross appeals by the Revenue and Assessee emanate out of the order of the Ld. CIT(A) dated 28.2.2011 and pertain to assessment year 2005-06.
2. The grounds raised in the Revenue's appeal read as under:-
1ITA NO. 2167&2496/DEL/2011 "1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 1,82,14,817/- when the same was shown by the assessee itself in its Income and Expenditure A/c and the assessee has been denied benefits u/s. 11 & 12 of the Act which has been upheld by the Ld. CIT(A) as well.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in allowing the claim of expenditure of Rs. 1,84,77,745/- when the assessee had failed to furnish complete documentary evidences to substantiate the claim to fulfill its objectives.
3. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing."
3. The grounds raised in the Assessee's appeal read as under:-
"1. That the learned CIT(A) has grossly erred both in law and on facts in holding that, appellant is not entitled to claim of exemption u/s. 11 and 12 of the Act.
1.1 That the Ld. CIT(A) while concluding that appellant is not entitled to claim of exemption of the Act has misconstrued the statutory provisions of law and, has failed to appreciate the facts and circumstances of the appellant trust and as such the denial of exemption is not in accordance with law and hence untenable.
1.2 That the finding of the Ld. CIT(A) that "facts brought in by the AO has not been rebutted by Ld. A.R. that various TV films are being manufactured are commercial in nature" is factually incorrect, 2 ITA NO. 2167&2496/DEL/2011 overlooks the written submissions and, documentary evidence on record and thus, arbitrary, invalid and unsustainable.
1.3 That the judicial pronouncements relied upon by the Ld. CIT(A) in the case of Aman Shiv Mandi Trust vs. C.I.T. reported in 296 ITR 415 (P&H) and C.I.T. vs. National Institute of Aeronautical Engineering Educational Society reported in 181 Taxmann 205 are wholly inapplicable to the facts of the case of the appellant and thus could not have been relied upon to uphold the denial of exemption us. 11 and 12 of the Act.
1.4 That the Ld. CIT(A) has failed to appreciate that, the various findings recorded by the Ld. AO in the impugned order of assessment were also factually incorrect, contrary to replies furnished in the course of assessment proceedings and material on record and had been recorded without granting any opportunity much less effective opportunity and, therefore, mechanical reliance on the said findings to sustain the denial is also misconceived and misplaced and untenable.
1.5 That the Ld. CIT(A) has otherwise too failed to appreciate that since appellant trust is a charitable trust and, in come had been applied in accordance with the objects set out in the trust deed, there was no justification for the Ld. Officer to deny the claim of exemption under section 11 & 12 of the Act.
1.6 That the Ld. CIT(A) has further failed to appreciate that once registration u/s. 12A has been granted by the Ld. CIT(A) and 3 ITA NO. 2167&2496/DEL/2011 thereafter, it is beyond the province of the Ld. Officer to reject the claim of exemption under section 11 of the Act by looking into objects of the trust.
1.7 That the Ld. CIT(A) has also overlooked the fact that in the immediately preceding assessment year the ld. AO after due examination had accepted the claim of the assessee in as much as he has not held that, films were produced for commercial purposes and therefore denial of exemption is wholly unjustified.
2. That the Ld. CIT(A) has also erred both in law and on facts in holding that order of assessment was framed by granting valid and proper opportunity to the appellant. The findings so recorded is vitiated as it overlooks the factual matrix and, evidence on record and thus misplaced.
4. In this case pursuant to the show cause notice, the return of income was filed by the assessee on 10.5.2006 declaring total income at NIL, after claiming exemption of Rs. 1,66,00,108/- u/s. 11 of the I.T. Act. In response to the statutory notices the Managing Trustee and other CAs appeared and filed the various details. Assessee was further asked to furnish the various details/ information and was also required to produce the books of accounts and vouchers. Ld. AO noted that the assessee has furnished only some information, but no books of accounts were produced and various information / documents having bearing on the finalization of assessment were also not filed. Ld. AO further asked various details and information and explanation. Ld. AO noted that only some of the information were supplied and assessee's counsel repeatedly 4 ITA NO. 2167&2496/DEL/2011 asked adjournments. In view of the above, Ld. AO noted that assessee does not want to furnish the remaining information / documents/ clarifications and also does not want to produce the books of accounts.
4.1 Ld. AO noted that as per the Trust Deed the Trust is created for carrying out the following objects of the public charity and for the benefits of all Indians without any discrimination of caste, colour, creed, sect, sex, age and / or other natural or manmade differences. :-
(a) To promote and / or carry out directly or indirectly research into scientific, cultural and spiritual heritage of India;
(b) To promote and / or carry out directly or indirectly research oriented study of Indian history and civilization;
(c) To convey and spread knowledge and information regarding (a) &
(b) above through all media including electronic media and satellite and television channels either owned by the Trust and through media channels owned by others.
4.2 Ld. AO further referred to the statement of Shri Shradhalu Ranade, the Managing Trustee recorded on 15.10.2007 during the course of assessment proceedings. Ld. AO noted that the trust viz. is 'Mother India Trust' came into existence on 06.11.2002. Ld. AO further noted that Shri Shradhalu Ranade, the Managing Trustee deposed on 15.10.2007, interalia, that the Trust was created with the objective of researching and disseminating aspects of Indian Cultural, Knowledge system and tradition of India in order to inspire and educate the youth of India and that in particular the objective was to create programmes based on 5 ITA NO. 2167&2496/DEL/2011 video medium for dissemination through Audio visual platforms. Shri Ranade further deposed that the objective was fully met in the work done so far and that his extensive research of content and product of high quality video programme and dissemination through the lectures/ workshops and presentation through out India; that it was further deposed that they are at present in negotiation with various broad casters for broadcasting these video programmes; that Shri Ranade further deposed that in assessment year 2003-04, they had mostly done research work and set up the basic facilities but no production were completed and that in assessment year 2004-05 and 2005-06 most of the productions were done and that a complete list of programmes has been furnished vide letter dated 5.10.2007 in A.Y. 2004-05 and that it is not possible to segregate the year wise production as no such record is kept and that the list is the combined production for both the years and upto date i.e. May, 2005.; that Shri Ranade further stated that thereafter no production was carried out; that Regarding receipt from these sources it was deposed that there was no income / receipt out of these production / programmes till December, 2006 and from January, 2007 some income by way of Royalty is coming from sale of DVDs of 2 of the programmes. On being asked as to what was the reason to stop the activities of the Trust, it was deposed by him, inter-alia, that activities of the Trust have not stopped and only the production has stopped.
4.4 Ld. AO further noted that the assessee has filed a list of films produced till then. The list showed 30 films produced; that the income and expenditure account of Asstt. Years 2004-05 and 2005-06 both show no income from the production of the above films; huge expenditure to the tune of Rs. 11,44,718/-; Rs. 1,28,96,203; and Rs. 1,89,88,064/- were incurred for the production of these 6 ITA NO. 2167&2496/DEL/2011 films in the asstt. Year 2003-04, 2004-05 & 2005-06 respectively. The major sources of receipt was only donation in all these years; that the films were stated to have been produced and kept as its is. Ld. AO further noted that as per the statement of the managing trustee the production was done in the assessment year 2004-05 and 2005-06 also but no utilization of these films took place as yet except sale of DVDs of two of its programmes sometime in January, 2007; that there is no evidence of utilization of these films / programmes for charitable purpose; that Shri Ranade deposed inter-alia, that as a result of CBI's action donors known to them stopped their involvement and that they were not in a position to raise funds and take forward their activities; that deposition indicates that there was no application of income derived from property held under Trust for charitable purpose; that the films were produced and what was done with those is not apparent and it is not proved that the same were utilized for charitable purposes; that the deposition of Sh. Ranade on 15.10.2007 inter-alia that "we are at present in negotiation with various broadcasters for broadcast of these video programmes" indicate that the assessee has a programme to exploit these film for commercial purposes with a view to earn profit and its activities are not for charitable purpose; that this view is also fortified from the extracts of the statements of the employees of the assessee who have deposed in pursuance of summons u/s. 131 of the I.T. Act.
4.5 Ld. AO further observed that the above submissions could not be confronted to the assessee as it did not appear on the adjourned date i.e. 27.11.2007 or thereafter. Ld. AO observed that the above extracts of statements of the assessee's employees clearly indicate that assessee wanted to exploit all the programmes for commercial purposes; that these films produced in 7 ITA NO. 2167&2496/DEL/2011 Asstt. Year 2004-05 and 2005-06 could not be released for charitable purposes even after several years of production is sufficient circumstantial evidence to suggest that there is no application of assessee income derived from property held under Trust for the charitable purpose. Hence, the Ld. AO held that the benefit of section 11 and 12 of the Act are not allowed.
4.6 Ld. AO further noted that the income and expenditure account showed receipt of donation of Rs. 1,82,14,817/-. The assessee was asked inter-alia to furnish the list of donors giving names, addresses of the donors, amount received, mode of payment received, giving details of cheque/Demand Draft and the date of receipt of the donation. Assessee supplied some information in this regard, but Ld. AO was not satisfied. He observed that donation received by cheque amounted to Rs. 47,06,368/- and for the remaining donation representing cash donation, there was no name and address of the donor. Therefore, Ld. AO observed that the identity and creditworthiness of the donors were thus not proved. Ld. AO's queried for information in this regard which were not complied with by the assessee. As regards the donation by cheque, Ld. AO noted that although Sh. Shradhalu Ranade stated that he knows all the donors and he can arrange the confirmation from them, but it was not done inspite of the opportunities allowed subsequently to file their addresses. As regards the cash donation, Sh. Ranade deposed inter-alia that the anonymous donation were placed in Hundi and donors if they choose they write their names and addresses on the envelope and drop it in the Hundi. Mr. Ranade further stated that no panchnama was prepared as the Hundi was opened by the trustees. Ld. AO further observed that this contention of the assessee was not tenable, as in the absence of the panchnama there were no circumstantial evidence of cash 8 ITA NO. 2167&2496/DEL/2011 donation. Ld. AO further noted that despite several opportunities no compliance was made by the assessee.
4.7 From the above, Ld. AO observed that it was apparent that the assessee has not been able to substantiate the nature and source of receipt of the amount under the head donation. The amount of Rs. 1,82,14,817/- was therefore, treated as assessee's income or undisclosed source within the meaning of section 68 of the I.T. Act.
4.8 Ld. AO further asked the assessee to explain the nature and details and furnish evidence in respect of the various expenses claimed by the assessee. Assessee has stated that the records were not traceable and hence, information could not be placed. Subsequently, the assessee merely furnish the copy of vendor ledger without evidence and supporting vouchers. Ld. AO further observed that the necessary details in this regard were not furnished by the assessee. On perusal of the details submitted, Ld. AO observed that in respect of most of the expenditure, the assessee has stated vouchers, bills were not readily available.
4.9 Ld. AO further observed that a sum of Rs. 6,00,000/- was shown in the assessee's balance sheet as loan from Dipti Trust. The assessee was inter-alia asked to file the confirmations with PAN and particulars of Dipti Trust. However, no compliance was given. Therefore, the Ld. AO observed that nature and source of this credit of Rs. 6 lacs remained unexplained.
4.10 Ld. AO computed the income as under:-
- Income from other sources u/s. 68 of the I.T. Act as discussed in para (c) above. Rs. 1,82,14,817/- 9 ITA NO. 2167&2496/DEL/2011 - Interest on Fixed deposits as declared Rs. 1,199/- - Miscellaneous Income as declared Rs. 2,01,336/- - Unexplained cash credit as per para (E) above Rs. 6,00,000/- Rs. 1,90,17,352/-
Less : (Expenses attributable to earning of income as above)
- Audit fee - 6681/-
- Bank charges -3137/-
- Membership fee - 500/-
- Out of the claim of other - 5,00,000/-
Expenses in the absence
of evidence as discussed in
para (D) above, it is estimated
That a sum of Rs. 5 lacs only are
incurred wholly and exclusively
for earning the above income -
Rs. 5,10,318/-
Assessable income Rs. 1,85,07,034/-
Rounded off Rs. 1,85,07,030/-
5. Against the above order the Assessee appealed before the Ld. CIT(A). Before the Ld. CIT(A) assessee submitted a request to admit the additional evidences under Rule 46A. These were forwarded to the Ld. AO for his Remand Report. Upon receipt of the Remand Report from the Ld. AO, rejoinder from the assessee was also obtained.
5.1 Ld. CIT(A) noted that Ground No. 1 and 2 of the appeal was regarding denial of valid and proper opportunity to the assessee company. Considering the response of the assessee company in this regard, Ld. CIT(A) dismissed the Ground No. 1 & 2 of the assessee and held that assessment order was a valid order and 10 ITA NO. 2167&2496/DEL/2011 proper opportunities of being heard were given to the assessee, while passing the order u/s. 143(3) of the I.T. Act.
5.2 Further Ground No. 3 & 4 raised by the assessee before the Ld. CIT(A) is as under:-
"3. That the Ld. Addl. DIT(E), Range-I, Delhi, has grossly erred in holding that the activities of the assessee were not for charitable purposes. The aforesaid findings are in disregard of the fact that the assessee has duly been granted a certificate under section 12A of the Act and further a certificate u/s. 80G of the I.T. Act, had also been granted. The adverse findings recorded are arbitrary and conclusion that the activities of the assessee are not charitable is contrary to the settled legal principles besides otherwise being contrary to facts on record. There was no material the Ld. Addl. DIT(E) that the assessee was engaged in any business activities and the motive was not charitable but commercial.
4. That, the Ld. Addl. DIT, Range-I, Delhi, has grossly erred in holding that assessee's income amounting to Rs. 1,84,17,352/- derived from property held under Trust was not at all applied for charitable purpose and erred in not allowing exemption under section 11 of the I.T. Act, 1961. In fact he has further erred that apart from applying the entire receipts there was an excess of expenditure over receipts and further 11 ITA NO. 2167&2496/DEL/2011 the assessee trust has also made an application of Rs. 25,37,659.00 by way of net capital expenditure for charitable purposes."
5.3 In this regard, Ld. CIT(A) noted the contention of the assessee and the adjudication of the Ld. AO, Ld. CIT(A) observed that according to the ld. AO there is no evidence of utilization of film and programmes for the charitable purposes. Ld. CIT(A) observed that Ld. AO has held that assessee has a programme to exploit the films for commercial purposes with a view to earn profit and not for charitable purposes. In this regard, Ld. CIT(A) referred to the observation of the Ld. AO and the statement of the assessee's employees who have deposed in pursuance of the summons issued u/s. 133 of the I.T. Act.
5.4 Ld. CIT(A) further noted the elaborate submissions of the assessee in this regard. It was submitted that the Ld. AO erred in holding that the assessee's income amounting to Rs. 184175352/- derived from property held under the trust was not applied for charitable purposes. It was further submitted that the Ld. AO was not justified in denying the exemption u/s. 11 of the I.T. Act.
5.5 Considering the above, Ld. CIT(A) observed that while disallowing the benefit of Section 11 and 12 of the Act, Ld. AO has specifically discussed in the body of the assessment order and the Ld. AO has very specifically and categorically incorporated various facts on record that the objects of producing the films was not a charitable purpose. In this regard, Ld. CIT(A) referred to the statements of four persons recorded by the Ld. AO. Ld. CIT(A) concluded that after considering the assessee's reply and finding of the Ld. AO, he was of the considered opinion, that facts brought on by the Ld. AO has not been rebutted by 12 ITA NO. 2167&2496/DEL/2011 the assessee's counsel that various TV films that are being manufactured are commercial in nature. Therefore, the Ld. CIT(A) held that action of the AO deserves to be confirmed. Ld. CIT(A) further referred to the following judicial pronouncement namely Aman Shiv Mandir Trust vs. C.I.T. 296 ITR 415 (P&H) wherein it was held as under:-
"Held, dismissing the appeal, that it was not disputed that nothing was spent during the last give years on any charitable purpose. It was also found that the application filed by the assessee was delayed by more than four years. Not only this, huge amounts of fixed deposits were found in the name of the trustee, who had later approached the Settlement Commission obviously admitting his guilt. Keeping in view the totality of circumstances and the intention and conduct of the assessee including the managing trustee, the claim made by the assessee was not found to be genuine. The assessee was not entitled to registration under section 12A."
5.6 Ld. CIT(A) concluded as follows in this regard:-
"Further, reliance is placed on the judgment of the Hon'ble Uttarakhand High Court in the case of C.I.T. (Dehradun) vs. National Institute of Aeronautical Society, reported at 2009 TIOL-314-HC- Uttrakhand, wherein, the Hon'ble High Court has held that charity is soul of the charitable purpose expression, mere trade and commerce in education cannot be said to be a charitable purpose. The ratio of the above said judgment of the Hon'ble Uttrakhand High Court clearly hits the present as assessee was not able to explain as 13 ITA NO. 2167&2496/DEL/2011 to how it is involved in the charitable activity. By producing various films what kind of charity has been done? It has not been fully explained and properly proved by the assessee. In view of the reliance on the above said judgments of the Hon'ble Punjab and Haryana & Uttarakhand High Court, in my considered opinion action of the Ld. AO deserves to be confirmed and ground No. 3 and 4 are dismissed."
5.7 Thereafter, Ld. CIT(A) considered the Ground No. 5 of the assessee that the donation of Rs. 18,41,75,352/- was wrongly treated as assessee's income from undisclosed sources within the meaning of Section 68 of the I.T. Act. In this regard, Ld. CIT(A) noted the assessee's submissions that anonymous donation in the Asstt. year 2005-06 cannot be held to be income from unexplained sources u/s.
68, in view o the judgment of the Hon'ble High Court of Delhi in the case of DIT(E) vs. Keshav Social and Charitable Foundation, reported in (2005) 278 ITR 152 wherein it has been held as under:-
"In S.R.M.M. C.T.M. Tiruppani Trust vs. C.I.T. (1998) 230 ITR 636 (SC), it has been held that under section 11(1) of the Act, every charitable or religious trust is entitled to deduction of certain income from its total income of the previous year. The income so exempt is the income which is applied by the charitable trust to its charitable or 14 ITA NO. 2167&2496/DEL/2011 religious purposes in India. This is, of course, subject to accumulation up to a specified maximum which, in the present case, was 25 percent. In the appeal that we are concerned with, it has been found as a matter of fact that the assessee had applied more than 75 per cent of the donations for charitable purposes as per its objects.
To obtain the benefit of the exemption under section 11 of the Act, the assessee is required to show that the donations were voluntary. In the present case, the assessee had not only disclosed its donations, but had also submitted a list of donors. The fact that the complete list of donors was not filed or that the donors were not produced, does not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts. This is more particularly so in the facts of the case where admittedly more than 75 per cent of the donations were applied for charitable purposes.
Section 68 of the Act has no application to the facts of the case because the assessee had in fact disclosed the donations of Rs. 18,24,200/- as its income and it cannot be disputed that all receipts, other than corpus donations, 15 ITA NO. 2167&2496/DEL/2011 would be income in the hands of the assessee. There was, therefore, full disclosure of income by the assessee and also application of the donations for charitable purposes. It is not in dispute that the objects and activities of the assessee were charitable in nature, since it was duty registered under the provisions of section 12A of the Act."
5.8 Ld. CIT(A) further noted that assessee has furnished a statement of donation received in which out of total 54 donations received by cheques, names and full address of 33 donors were given. Ld. CIT(A) noted that in 20 cases only names were available and in only one case neither the name or address was available. It was further submitted that section 115 BBC providing for taxation of anonymous donations was inserted by Finance Act, 2006 only with effect from 1st April, 2007. Ld. CIT(A) concluded in this regard as under:-
"Ground NO. 5 is against the addition of Rs. 1,82,14,817/-
u/s. 68 of the I.T. Act. In this regard, Ld. AR has placed his reliance on the judgment of Hon'ble High Court in the case of DIT(E) vs. Keshav Social and Charitable Foundation, reported in (2005) 278 ITR 152. While admitting the additional evidences assessee was able to give full details of the donors. Furthermore, assessee's reliance on the 16 ITA NO. 2167&2496/DEL/2011 judgment of the Hon'ble Delhi High Court is appreciated as well as provisions of Section 115BBC of the I.T. Act cannot be attracted because it has been inserted by Finance Act, 2006 w.e.f. assessment year 2007-08, by which anonymous donation can be taxed w.e.f. assessment year 2007-08. In view of the above discussion, in my considered opinion, action of the AO making addition of Rs.
1,82,14,817/- deserves to be deleted. Ground No. 5 is allowed."
5.9 Thereafter, Ld. CIT(A) considered the issue of disallowance of the claim of the expenditure. Ld. CIT(A) noted the AO's observations and assessee's submission in this regard. Ld. CIT(A) concluded as under:-
"I have gone through the finding of the AO in the assessment order and details submitted by Ld. AR has shown that various details were produced during the course of assessment proceedings itself, and all the payments were made by account payee cheque and ledger was also produced. So, making disallowance of these expenses has no basis. So, in my considered opinion grounds no. 6, 9 and 10 are allowed."
6. Against the above order of the Ld. CIT(A), Revenue and Assessee both are in cross appeal before us.
17ITA NO. 2167&2496/DEL/2011
7. We have heard both the counsel and perused the records.
Revenue has raised the ground that Ld. CIT(A) erred in deleting the addition of Rs. 182,11,817/-, when the same was shown by the assessee itself in its income and expenditure a/c and the assessee has been denied benefits u/s. 11 & 12 of the Act which has been upheld by the Ld. CIT(T) as well. Further, it has been urged that Ld. CIT(A) erred in allowing the claim of expenditure of Rs. 184,77,745/-
when the assessee has failed to furnish complete documentary evidence to substantiate the claim to fulfill its objective.
7.1 The assessee has raised the ground that Ld. CIT(A) has erred in holding that assessee is not entitled to claim exemption u/s. 11 & 12 of the I.T. Act.
7.2 In our considered opinion, Ld. CIT(A) has passed a contradictory order. Ld. CIT(A) has held that assessee has not been able to rebut the AO's finding that various TV films that are being manufactured are commercial in nature. Ld. CIT(A) has further held that assessee was not able to explain as to how it is involved is charitable activity. Ld. CIT(A) has affirmed AO's finding that assessee is not entitled to the benefit of Section 11 & 12 of the Act.
18ITA NO. 2167&2496/DEL/2011 7.3 After having held as above Ld. CIT(A) has gone on to hold that AO's action of making addition of Rs. 18214817/- deserves to be deleted. The Ld. CIT(A) held so after placing reliance on the case law of SRMM CTM Tiruppani Trust vs. C.I.T. (Supra). In this case law it has been held that under section 11(1) of the Act every charitable or religion trust is entitled to deduction of the certain income from its total income of previous year. The income so exempt is the income which is applied by the charitable trust to its charitable or religious purposes in India. Furthermore, it was observed that in that case it was found that the assessee had applied more 75% of the donation for charitable purposes as per its objects. In the background of the aforesaid premises, it was held that in the case law above that the donations received were exempt as they were held to have been applied for charitable purpose.
8. In the present case before us complete details of the donations received is not on record. The donations and the income so generated has been held by the Ld. CIT(A) to have not been applied for charitable purposes. In these circumstances, we find that it is contradictory on the part of the Ld. CIT(A) to hold that the donations are disclosed and exempt and at the same time hold that assessee is not entitled for exemption u/s. 11 & 12 of the Act in as much as it is not engaged in any charitable activity.
9. Apart from above, Ld. CIT(A) has held that the assessee should be allowed the claim of expenditure of Rs. 18477745/-. This is quite contradictory approach as when it has been held by the Ld. CIT(A) that assessee is not engaged in any charitable activity, there is no question of allowing any expenditure incurred in this regard. From the 19 ITA NO. 2167&2496/DEL/2011 above, it is clear that the ld. CIT(A) has passed a contradictory order. In this regard, we find that Hon'ble Apex Court in the case of Kapurchand Shrimal Vs. CIT, 131 ITR 451, has held that it is the duty of the Appellate Authority to correct the lacunae in the order of the authorities below and if needed remand the matter. Hence, in the background of the aforesaid discussions and precedent, we remit the issue raised in the Cross Appeals to the file of the Ld. CIT(A) to consider the issue afresh and pass a cogent order.
10. In the result, both the cross appeals filed by the Revenue as well as Assessee are allowed for statistical purposes.
Order pronounced in the open court on 08/11/2013.
Sd/- Sd/-
[C.M. GARG]
GARG] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 08/11/2013
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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