Commissioner of Income Tax vs Shyama Shyam Dham Samiti Kripalu Kunj

The present appeal u/s 260A of the Income Tax Act, 1961 (hereinafter referred to as "the Act", arises out of the order of the Income Tax Appellate Tribunal, Agra Bench, Agra, hereinafter referred to as "the Tribunal" dated January 24, 2006, relating to the assessment year 1996-97.

Briefly stated the facts giving rise to the present appeal are as follows:

The respondent-assessee is a trust registered u/s 12A of the Act. During the period April 1, 1996, to March 31, 1996, relevant to the assessment year in question, i.e., 1996-97 it had received 111 plots of land by way of gift/donation from 46 donors. All the 46 donors had purchased the land, which they had gifted, through registered sale deeds sometimes during the period 1992-94. They had gifted the land by way of registered gift deeds and the value of the plots so gifted came to be Rs. 3,35,39,387. The assessee incurred an expenditure of Rs. 49,51,161 towards purchase of stamp papers and registration charges for execution of the gift deeds. The assessing authority added the amount towards the value of the land and expenses as unexplained investment u/s 69 of the Act. The Commissioner of Income Tax (Appeals) deleted the addition which order has been affirmed by the Tribunal.

We have heard Sri Shambhu Chopra, learned standing counsel for the Revenue.

Learned standing counsel submitted that the donors were not produced before the assessing authority for cross-examination and the summons issued u/s 131 of the Act remained unanswered. In the circumstances he submitted that the investment made in the land has rightly been added in the hands of the assessee. The submission is wholly misconceived.

Admittedly, 46 donors had purchased the plots of land through registered sale deeds and the same were mutated in their names and subsequently out of love and affection they have donated the land to the assessee-trust through registered gift deeds though the expenses on registration charges and stamp papers were incurred by the assessee. There is no question of unexplained investment in the acquisition of the plots in question, which have been received by way of gift. The Tribunal has rightly upheld the deletion of the addition so made.

So far as item pertaining to Rs. 14,74,350 is concerned we find that the aforesaid amount was given by the assessee-trust to one M/s. Sadhna Bhawan Trust, Allahabad, which is also registered u/s 12A of the Act. The said donation given by one trust to another trust is treated as an expenditure for religious and charitable purposes under the Act and, therefore, could not have been added under the head "Income from other sources".

Now, remains the last item pertaining to Rs. 5,50,000 which the assessee had distributed among poor persons in cash. It may be mentioned here that the assessee is a very big trust and has a large following and if on some occasion it has distributed some cash to the poor persons it cannot be said that the expenditure was not incurred; more so, when the Tribunal has recorded a finding that the expenditure was actually incurred.

In view of the foregoing discussions, we are of the opinion that the findings recorded by the Tribunal do not give rise to any substantial questions of law as they are based on appreciation of evidence and material on record.

The appeal is devoid of any merit and is dismissed in limine.