A.D. Jain, Judicial Member - This is assessee's appeal against the order dated 09.10.2012 for the assessment year 2009-10 passed by learned CIT(A), Jammu.

2. The following effective grounds have been taken:

i. The learned CIT(A) has grossly erred in law and facts of the case in confirming addition of Rs. 15,99,471/- on account of Dharmarth Receipts.

ii. The learned CIT(A) has erred in law and on the facts of the case in confirming addition of Rs. 2,09,00,000/- by increasing the purchase cost of the assessee in respect of leasehold godown at Sector 26, Transport Nagar.

3. Apropos ground no. 1, the Assessing Officer made an addition of Rs. 15,99,471/- on account of Dharmarth Receipts collected along with freight receipt, not reflected by the assessee in its profit and loss account.

4. The Assessing Officer observed that the receipts were directly related to the business of the assessee company; that the receipts were received not by a trust created for the purposes of charity in nature, but by a company doing business and trading; and that no evidence had been filed by the assessee that the receipts had been actually spent on charity.

5. The learned CIT(A), while upholding the addition, observed that the assessee had remained unable to establish that the object of the company, as per its memorandum and articles of association, was also to carry out charity; that its objective was commercial and there was no reason to collect Dharmarth from its clients; and that, therefore, the Assessing Officer had rightly treated this receipt as a trade receipt.

6. Before us, the learned counsel for the assessee has contended that similar receipts were allowed in earlier years, which are as follows:

7. It has been further contended that a summarized copy of the accounts of the Dharmarth Receipt was filed. A copy thereof is at APB -8. It has next been submitted that as per CBDT Circular No. 77-F (copy at APB - 9), dated 21^st March, 1979, Dharmarth Receipts are not taxable; that this Circular is binding on the Department and has illegally not been abided by; and that while wrongly holding that the objects of the assessee company were not charitable, the learned CIT(A) has failed to take into consideration Clause no. 30 of the memorandum and articles of association of the assessee company [copy at APB 34, relevant portion at APB 34(d)].

8. The learned DR has placed strong reliance on the impugned order, contending that the objective of the assessee company is commercial and there was no reason to collect Dharmarth from its clients; and that the assessee has not been able to establish that the objective of the assessee company was to carry out charity.

9. It is not disputed that Dharmarth receipts are not taxable. This is as per the CBDT Circular (supra), as also the following decisions:

i. CIT v. Bijli Cotton Mills (P.) Ltd. [1979] 116 ITR 60 (SC)

ii. CIT v. Gheru Lal Bal Chand [1978] 111 ITR 134 (Punj. & Har.)

iii. Addl. CIT v. Channoo Lal Damodar Dass [1978] 113 ITR 759 (All.)

iv. Addl. CIT v. Dalsukhrai Jaidayal [1979] 117 ITR 466 (All.)

v. Nathu Ram Shiv Narain v. CIT [1982] 134 ITR 625/9 Taxman 72 (Punj. & Har.)

vi. CIT v. E.H. Kathawala & Co. [1982] 135 ITR 384/9 Taxman 77 (Bom.)

vii. Chunnilal Onkarlal v. CIT [1982] 135 ITR 580/[1981] 6 Taxman 141 (MP)

viii. CIT v. Ratilal Popatlal Shah [1983] 15 Taxman 434 (Bom.)

10. The only dispute before us is as to whether the receipts were, in fact, Dharmarth receipts. The assessee's stand in this regard is that it was collecting Dharmarth in GRs and gate passes, as part of charity; that