Bhaktvastal Sadguru Yogiraj Vasantrao Gopalrao Ghonge Maharaj Nyas Mukteshwar v. DCIT (2022) 197 ITD 224 (Nagpur)(Trib.)

S. 11 : Property held for charitable purposes-Search and seizure-Addition on protective basis-No incriminating material was found-More than 85 per cent of receipts of trust were applied for objects of trust-Denial of exemption is not valid. [S. 12A, 13, 132, 153C]

Assessee-trust is registered under section 12A and claimed exemption under section 11.  A search was conducted at premises of Vasanthrao Ghonge    a trustee of assessee, pursuant to which notice under section 153C was issued to assessee.  Assessing Officer denied exemption on ground that assessee could not claim exemption in name of trust and further determined income of assessee by making additions with respect to income found during search in hands of assessee-trust on protective basis. CIT(A) held that assessee-trust was formed by Vasanthrao Ghonge     and thus, was not a real trust, However  deleted protective additions  Held that from financial statement that expenditure incurred by assessee trust was normal expenditure incurred on objects of trust and no incriminating material was found in search carried out at premises of Vasanthrao Ghonge, pursuance to which notice under section 153C was issued.  Furthermore, fixed assets of trust were not found to be used for benefit of Vasanthrao Ghonge. There being application of income at more than 85 per cent of receipts of trust on objects of trust, income of trust was to be determined at hands of assessee itself and income would be determined as nil. Denial of exemption is not valid.  (AY. 2007-08, 2008-09,  2011-12)