DDIT, CHENNAI V. The Panagal Building Society, CHENNAI

CO 2/CHNY/2015

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0508 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-04-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 05-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G BASKAR
• Assessee Lawyers: S DASGUPTA
• Keywords: Depreciation; Charitable institution; Maximum Marginal Rate
• Section: 142(1); 12; 144; 11

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHE NNAI , . !' !' !' !' , # # # # $% $% $% $% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A.NOS.2116 AND 2117/MDS/2014 ASSESSMENT YEARS : 2010-11 AND 2011-12 & C.O. NOS. 02 AND 03/MDS/2015 [IN I.T.A.NOS.2116 AND 2117/MDS/2014] THE PANAGAL BUILDING SOCIETY, PANAGAL MALIGAI, 10 TH FLOOR, NO. 1, JEENIS ROAD, SAIDAPET, CHENNAI 600 015. [PAN: AAATP8333K] VS. THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION) II, CHENNAI. ( &' &' &' &' /APPELLANT ) ( RESPONDENT/CROSS OBJECTOR ) &' ( ) / APPELLANT BY : SHRI G. BASKAR, ADVOCATE *+&' ( ) / RESPONDENT BY : SHRI S. DASGUPTA, JCIT ( , / DATE OF HEARING : 26.05.2015 -./ ( , /DATE OF PRONOUNCEMENT : 29.05.2015 0 0 0 0 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THESE TWO APPEALS FILED BY THE ASSESSEE AND THE CRO SS OBJECTIONS BY THE REVENUE ARE DIRECTED AGAINST THE CONSOLIDATED O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-VII, CHENNAI, DATED 16.06.2014 RELEVANT TO THE ASSESSMENT YEARS 2010-11 AND 2011-1 2. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE M /S. THE PANAGAL BUILDING SOCIETY HAS BEEN REGISTERED UNDER SECTION 12A(A) OF THE INCOME TAX ACT. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2010-11 ON I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 2 27.09.2010 ADMITTING AN INCOME OF . NIL. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143( 2) OF THE ACT WAS ISSUED. IN RESPONSE TO THE NOTICE, THE AUTHORIZED REPRESENTATI VE SHRI V.K. THIRUPATHY, C.A. APPEARED AND MAJOR PORTION OF THE PARTICULARS WERE PROVIDED. THE ASSESSING OFFICER HAS ISSUED FURTHER NOTICE CALLING FOR SPECIFIC DETAILS AND DOCUMENTS UNDER SECTION 142(1) OF THE ACT DATED 28. 01.2013. THIS NOTICE WAS NOT RESPONDED AND REPEATED REMINDERS WERE LEFT UNHE EDED. IN THE ABSENCE OF PROPER COMPLIANCE, THE ASSESSMENT WAS COMPLETED AS A BEST JUDGEMENT ASSESSMENT UNDER SECTION 144 OF THE ACT BASED ON TH E EVIDENCES AND MATERIALS AVAILABLE ON RECORD. IN THE ASSESSMENT OR DER, THE ASSESSING OFFICER HAS OBSERVED THAT THE SOURCE OF INCOME COMPRISES RE NTAL INCOME OF .1,01,07,048/-, ELECTRICITY CHARGES COLLECTED OF .73,31,386/-, MAINTENANCE CHARGES COLLECTED OF .29,03,251/- AND INTEREST RECEIVED ON FIXED DEPOSIT S OF .81,38,116/- IN ALL SUMMING UP TO .2,84,79,801/-. AGAINST THIS INCOME, AN EXPENDITURE OF .2,03,67,818/- IS STATED TO BE INCURRED, WHICH INCL UDES CLAIM OF DEPRECIATION ALLOWANCE OF .59,54,218/-. THE ASSESSING OFFICER HAS COMPUTED THE PERMISSIBLE ACCUMULATION @ 15% ON THE GROSS REC EIPTS AND NOT ON THE EXCESS OF INCOME OVER EXPENDITURE AS PER THE ANNEXU RE A FILED BY THE ASSESSEE. 3. FURTHER, THE ASSESSING OFFICER HAS OBSERVED THA T THE ASSESSEE HAS DERIVED RENTAL INCOME, ELECTRICITY AND MAINTENANCE CHARGES COLLECTED OF .2,03,41,685/- FROM EXPLOITING THE PROPERTY SITUATE D AT NO.1, JENNIS ROAD, SAIDAPET, CHENNAI AND HAD INCURRED EXPENDITURE OF .2,03,67,818/-. I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 3 THEREFORE, THE EXCESS OF TOTAL INCOME OVER EXPENDIT URE OF .81,11,983/- SHOULD BE TAKEN AS INCOME FOR THE PURPOSE OF COMPUTING EXE MPTION UNDER SECTION 11(1)(A) OF THE ACT AND THE ASSESSEE SHOULD HAVE AP PLIED 85% OF SUCH VALUE TO AVAIL THE EXEMPTION. THIS CONTENTION IS WITHOUT PREJUDICE TO THE CORRECTNESS OF CLAIM OF DEPRECIATION MADE AND INCLUDED AS PART OF THE EXPENDITURE SUMMING UP TO .2,03,67,818/-. 4. SO FAR AS DEPRECIATION IS CONCERNED, THE ASSESS ING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS DEBITED A SUM OF .59,54,218/- AS DEPRECIATION ALLOWANCE AND TREATED THE SAME AS APPL ICATION OF INCOME. THE ASSESSING OFFICER HAS DENIED THE DEPRECIATION ON TH E GROUND THAT THE DEPRECIATION IS NEITHER A LOSS NOR EXPENDITURE AND TREATED THE CLAIM OF THE DEPRECIATION AS NON APPLICATION OF INCOME. THE ASSE SSING OFFICER HAS ALSO CONSIDERED THE EXEMPTION UNDER SECTION 11(2) OF THE ACT BUT NOT ACCEPTED ON THE GROUND THAT THE ACCUMULATION WAS DONE IN A MECH ANICAL MANNER AND IT IS NOT CONCRETIZED BY ANY REALISTIC PURPOSE. THE ASSES SING OFFICER HAS ALSO DENIED UNUTILIZED SURPLUS AS PER ANNEXURE C. ACCORD ING TO HIM, THE ASSESSEE HAS NOT UTILIZED THE ACCUMULATED FUNDS AND THE ACCU MULATION ALSO FOR DIFFERENT PURPOSES AND SUCH ACCUMULATION IS WITHOUT PRIOR APP ROVAL OF THE ASSESSING OFFICER. 5. THE ASSESSING OFFICER HAS ALSO DENIED THE CLAIM OF UNUTILIZED SURPLUS UNDER SECTION 11 (3) OF THE ACT FOR THE FOLLOWING R EASONS: (I) THE ACCUMULATION IS NOT UTILIZED FOR THE PURPOS E INTENDED. I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 4 (II) IT CANNOT BE SET OFF AGAINST EXCESS IN SUBSEQU ENT YEAR, WHEN NO SUCH EXCESS ACTUALLY EXISTS. (III) EVEN IF THE EXCESS SUBSISTS, WHEN SUCH EXCESS IS NOT DUE TO REPAYMENT OF LOANS, IN THOSE YEARS, SET OFF IS NOT ALLOWABLE. (IV) THE ACCUMULATION HAS BEEN UTILIZED AFTER 31.03 .2009 AND THAT TOO FOR A DIFFERENT PURPOSE. (V) SUCH DEVIATION IN PURPOSE WAS WITHOUT THE PRIOR APPROVAL OF THE ASSESSING OFFICER. THEREFORE, THE ACCUMULATION OR SHORT UTILIZATION IN THE ASSESSMENT YEAR 2004- 05 OF .70,60,921/- WAS BROUGHT TO TAX DURING THE YEAR UND ER CONSIDERATION UNDER SECTION 11(3) OF THE ACT AND ASSESSMENT WAS C OMPLETED. 6. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD. CIT(A) BY RAISING VARIOUS GROUNDS AND RELIED ON VARIOUS CASE LAW CONSISTING OF 5 PAGES. THE LD. CIT(A), AFTER CONSIDERING THE GROUNDS AND D ETAILED SUBMISSIONS MADE BY THE ASSESSEE, ALSO AFTER CONSIDERING THE FACTS A ND CIRCUMSTANCES OF THE CASE, AFTER EXAMINING THE OBJECTS OF THE SOCIETY AN D ALSO THE ACTIVITIES CARRIED BY THE SOCIETY, FOLLOWING FINDINGS WERE GIVEN: 3.8 PERUSAL OF THE ACCOUNTS FOR THE YEAR ENDED 31 .03.2010 REVEALS THAT THE ASSESSEE WAS IN RECEIPT OF RENTAL INCOME, ELECTRICITY CHARGES COLLECTED, MAINTENANCE CHARGES COLLECTED, INTEREST RECEIVED, ETC. AMOUNTING TO RS.2,84,79,801/-. THE EXPENDITURE SUCH AS SALARIES & WAGES, ELECTRICITY CHARGES PAID, DEPRECIATION, ETC. AMOUNTING TO RS.2,03,67,818/- WAS SPENT. THE RECEIPTS ARE RENT F ROM THE TENANTS WHO OCCUPIED THE ASSESSEE'S PREMISES AND ELECTRICITY CH ARGES COLLECTED FROM THEM AND INTEREST IS FROM THE DEPOSITS WITH BANK/GO VERNMENT COMPANIES/CORPORATION. THE EXPENDITURE WAS TOWARDS MAINTENANCE AND UP KEEP OF THE PREMISES AND CONNECTED AFFAIRS. THIS EXPENDITURE OF RS.2,03,67,818/- WAS CLAIMED AS APPLICATION FOR CHA RITABLE PURPOSE IN THE AUDIT REPORT U/S 12A(B) OF THE ACT. ACTUALLY TH E EXPENDITURE WAS INCURRED TO MAINTAIN AND UPKEEP THE BUILDING LET OU T TO VARIOUS TENANTS MOSTLY GOVERNMENT DEPARTMENTS. IT IS INCOMPREHENSIB LE HOW THE REGULAR AND ROUTINE EXPENDITURE IS TREATED AS APPLICATION O F INCOME FOR I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 5 CHARITABLE PURPOSE. THE FOLLOWING AGREEMENTS FOR TE NANCY LEASE WERE PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS. 1. WITH DGM(SW), BSNL, CHENNAI TELEPHONES, CHENNAI . 2. WITH COMMISSIONER OF RURAL DEVELOPMENT AND PANC HAYAT RAJ. 3. WITH MEMBER SECRETARY, ENVIRONMENT MANAGEMENT A GENCY OF TAMIL NADU. 4. WITH CHIEF EDUCATIONAL OFFICER. 5. WITH CHIEF ENGINEER (HIGHWAYS) PROJECT-II. 6. WITH DIRECTOR OF ENVIRONMENT. 7. WITH DEPUTY ZONAL MANAGER; ELECTRONICS CORPORAT ION OF INDIA LIMITED. 3.9 PERUSAL OF THE ABOVE AGREEMENTS REVEAL THAT TH EY ARE PURELY AGREEMENTS FOR LETTING OUT THE PROPERTY OWNED BY TH E ASSESSEE TO OTHERS ON A MONTHLY RENT BASIS. THE TENANTS HAVE TO PAY EL ECTRICITY CHARGES, MAINTENANCE OF LIFT, SECURITY, ELECTRICAL EQUIPMENT S, CONSERVANCY, ETC. INCURRED BY THE SOCIETY FOR COMMON PURPOSES, MAINTE NANCE CHARGES, ETC. IN ADDITION TO THE MONTHLY RENT PAYABLE. THE LEASE PERIOD IS 11 MONTHS AND RENEWABLE AT THE OPTION OF THE LESSEE. THIS IS THE ONLY ACTIVITY DONE BY THE ASSESSEE DURING THE ASSESSMENT YEARS IN APPE AL. NONE OF THE OBJECTS ENUMERATED ELSEWHERE IS CARRIED OUT BY THE ASSESSEE EXCEPT OBJECT (H). THAT TOO, THE CONSTRUCTION OF THE PANAG AL BUILDING WAS DONE BY THE SOCIETY. THE REVENUE GENERATED OUT OF RENTAL INCOME WAS NOT UTILIZED FOR UNDERTAKING CHARITABLE AND WELFARE PRO GRAMME ACCORDING TO NECESSITY BESIDES RECEIVING DONATIONS. 3.10. PERUSAL OF THE ACCOUNTS FOR THE YEAR ENDED 3 1.03.2011 REVEALS THAT THE RECEIPTS WAS RS.2,86,71,294/- WHEREAS THE EXPENDITURE WAS RS.2,12,45,966/-. THIS EXPENDITURE OF RS.2,12,45,96 6/- WAS CLAIMED AS APPLICATION FOR CHARITABLE PURPOSE. 3.2.1 LETTING OUT PREMISES TO GOVERNMENT DEPARTMENT S IS BY NO STRETCH OF IMAGINATION TERMED AS CHARITABLE ACTIVITY. WHEN QUESTIONED ABOUT IT, THE AR IN THE WRITTEN SUBMISSION CONTENDED THAT THE RENTAL REVENUE GENERATED FROM THESE DEPARTMENTS FOR THE USE OF BUI LDING IS NOT CARRIED WITH THE OBJECT OF EARNING PROFIT (AS A COMMERCIAL ACTIVITY). BUT IS INCIDENTAL BUT THE SAME ARE APPLIED FOR THE OBJECTS OF THE SOCIETY. IT WAS SUBMITTED THAT ONLY VERY NOMINAL RENT IS BEING COLL ECTED FROM THESE GOVERNMENT/CHARITABLE INSTITUTIONS WHICH ARE PROVID ING RURAL DEVELOPMENT TO THE GENERAL PUBLIC. IT WAS CLAIMED T HAT THE ACTIVITY IS THEREFORE CHARITABLE AND HAVING BEEN CARRIED OUT WI THOUT ANY PROFIT MOTIVE AND ARE OUTSIDE THE PURVIEW OF COMMERCIALITY . SO MANY CASE LAWS WERE RELIED ON AND THEY ARE QUOTE D OUT OF CONTEXT AND HENCE TREATED AS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 6 ACTIVITY OF THE SOCIETY IS LETTING OF ITS PREMISES TO VARIOUS TENANTS AND IS PURELY A COMMERCIAL VENTURE. 3.2.2 THE FUNCTIONING OF THE SOCIETY IS COMPARABLE TO THE MULTI-STOREYED FLATS SYSTEM AVAILABLE IN ANY METROPOLITAN CITY IN INDIA. IN THOSE BUILDINGS, FLATS WERE OWNED BY INDIVIDUALS WHO LET OUT THEM TO TENANTS AND RENTS ARE COLLECTED BY THE FLAT OWNERS. ADVANCE S ARE ALSO COLLECTED BY THE FLAT OWNERS BUT THE MAINTENANCE CHARGES FROM THE TENANTS ARE COLLECTED FOR THE UPKEEP AND MAINTENANCE OF COMMON AREAS, LIFTS, WATER AND SEWERAGE SYSTEM, PARKING SPACE, ETC. THE ONLY D IFFERENCE BETWEEN THE ASSESSEE AND THE MULTI-STOREYED FLAT SYSTEM IS THAT THE ELECTRICITY CHARGES ARE COLLECTED BY, FORMER ITSELF WHEREAS PAY MENT OF ELECTRICITY BILLS ARE LEFT TO THE TENANTS IN THE LATTER CASE. T HERE ARE SOME MULTI STOREYED BUILDINGS IN THE CITIES WHICH ARE EXCLUSIV ELY MEANT FOR LETTING OUT ONLY. THE FLATS IN THOSE BUILDINGS ARE NOT SOLD TO THE INDIVIDUALS. ENTIRE BUILDING IS ONLY MEANT FOR LETTING OUT TO TE NANTS. MONTHLY RENT, ADVANCE AND MAINTENANCE CHARGES ARE COLLECTED. THER E IS NO DIFFERENCE BETWEEN THE PANAGAL BUILDING LET OUT TO GOVERNMENT DEPARTMENTS AND MUTISTOREYED BUILDINGS LET OUT TO PRIVATE INDIVIDUA LS/CONCERNS. THIS BEING THE CASE, HOW THE ACTIVITY OF THE ASSESSEE CAN BE T ERMED AS CHARITABLE ACTIVITY AND THE FUNCTIONING OF THE PRIVATE BUILDIN GS BE CALLED AS BUSINESS ACTIVITY/INCOME EARNING ACTIVITY FROM HOUSE PROPERT Y. THERE IS NO PARITY IF THEY ARE TREATED DIFFERENTLY. THE OBJECTS OF THE SOCIETY ARE LAUDABLE BUT THEY ARE NEVER CARRIED OUT BY THE ASSESSEE SOCIETY. PERUSAL OF THE EXPENSES INCURRED EVERY YEAR REVEALS THAT THEY ARE ROUTINE EXPENDITURE INCURRED IN THE NORMAL COURSE AND THE DEPRECIATION BEING THE HIGHER EXPENDITURE CLAIMED ON THE BUILDING. THEY ARE AND C AN NEVER BE APPLICATION OF INCOME TOWARDS CHARITABLE ACTIVITIES OF THE SOCIETY. 3.2.3 THE AO TREATED THE SOCIETY AS EXEMPTED U/S 1 1 OF THE ACT BUT RESTRICTED THE ACCUMULATION U/S 11(1)(A) OF THE ACT , DISALLOWED DEPRECIATION AND BROUGHT TO TAX THE AMOUNT SET APAR T U/S 11(3) OF THE ACT FOR BOTH THE ASSESSMENT YEARS. BUT I AM OF THE CONS IDERED VIEW BECAUSE OF THE FOREGOING DISCUSSION THAT THE ASSESSEE SOCIE TY IS NOT ENTITLED TO EXEMPTION U/S. 11 AND 12 OF THE ACT. THE SURPLUS OF RS.81,11,983/- FOR AY 2010-11 AND RS.74,25,328/- FOR AY 2011-12 ARE DIREC TED TO BE TAXED AT MMR AS THE SOCIETY IS TO BE TREATED AS AOP INSTEAD OF WHAT WERE ASSESSED AS INCOME FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12 RESPECTIVELY. THE AO IS ALSO DIRECTED TO INITIATE P ENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR BOTH THE ASSESSMENT YEARS. 7. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MA TTER IN APPEAL AND THE CROSS OBJECTIONS BY THE REVENUE BEFORE THE TRIBUNAL . I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 7 8. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS FAILED TO CONSIDER EACH GROUNDS RAISED BY THE ASSES SEE AND HE PASSED A CONSOLIDATED ORDER. THEREFORE, HE PRAYED THAT THE M ATTER MAY BE REMITTED BACK TO THE LD. CIT(A) OR THE ASSESSING OFFICER. 9. ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE ORDER PASSED BY THE ASSESSING OFFICER. 10. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS EE IS M/S. THE PANAGAL BUILDING SOCIETY REGISTERED UNDER SECTION 12A(A) OF THE ACT. IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN BY DECLARING NIL INCOME AFTER CLAIMING EXEMPTIONS UNDER SECTION 11 AS WELL AS SECTION 12 OF THE ACT. FROM THE ANNEXURES ATTACHED TO THE ASSESSMENT ORDER , IT IS CLEAR THAT THE TOTAL GROSS RECEIPT OF THE ASSESSEE IS .2,84,79,801/-. THE EXPENDITURE STATED TO BE INCURRED BY THE ASSESSEE IS .2,03,67,818/-. FROM THE ANNEXURES ATTACHED TO THE ASSESSMENT ORDER, IT IS CLEAR THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR THE PURPOSE OF ANY CHARITABLE ACTIV ITY. DURING THE COURSE OF HEARING, WHEN THE BENCH ASKED THE LD. COUNSEL FOR T HE ASSESSEE TO EXPLAIN THE CHARITABLE ACTIVITIES CARRIED OUT BY THE ASSESS EE. HE HAS SUBMITTED THAT THE ASSESSEE SOCIETY HAS LET OUT SHOPS AT A LOWER PRICE TO VARIOUS GOVERNMENT ORGANIZATIONS THEREBY HELPING THE PEOPLE. THE LD. C OUNSEL FOR THE ASSESSEE HAS NOT EXPLAINED AS TO HOW LETTING OUT SHOPS FOR L OWER PRICE IS A CHARITABLE ACTIVITY. THEREFORE, IT CANNOT BE CONSIDERED THAT T HE ASSESSEE HAS CARRIED OUT I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 8 ANY CHARITABLE ACTIVITIES. FURTHER, THERE IS NOTHIN G ON RECORD TO PROVE THAT THE ASSESSEE HAS CARRIED OUT ANY CHARITABLE ACTIVITIES. IN SO FAR AS THE ORDER OF THE LD. CIT(A) IS CONCERNED, HE HAS EXAMINED THE ENTIRE FACTS OF THE ASSESSEES CASE AND ACTIVITIES OF THE ASSESSEE AND INCOME AND EXPENDITURE OF THE ASSESSEE AND CAME TO A CONCLUSION THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITY. THE LD. CIT(A) GAVE A CATEGORI CAL FINDING THAT THE ASSESSEE SOCIETY EXCEPT CONSTRUCTION OF PANAGAL BUILDING, NO CHARITABLE ACTIVITY WAS CARRIED OUT. HE FURTHER OBSERVED THAT THE ASSESSEE HAS RECEIVED .2,86,71,294/- AND THE EXPENDITURE WAS .2,12,45,966/-. THIS EXPENDITURE WAS CLAIMED AS APPLICATION FOR CHARITABLE PURPOSE. WHEN THE LD. CIT(A) HAS EXAMINED THE EXPENDITURE CLAIMED BY THE ASSESSEE, A S AN APPLICATION FOR CHARITABLE PURPOSE AND THEREAFTER, HE CAME TO A CON CLUSION THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHARITABLE ACTIVITY AND HEL D THAT THE SOCIETY IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT. WE FIND THAT THE LD. CIT(A) HAS EXAMINED ALL THE DETAILS AND OBJECTS OF THE SOCIETY AND GAVE A FINDING THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMP TION UNDER SECTIONS 11 AND 12 OF THE ACT. WE ALSO CONSIDERED THE ASSESSMENT OR DER AS WELL AS ORDER OF THE LD. CIT(A) AND PAPER BOOK FILED BY THE ASSESSEE AVAILABLE ON RECORD AND FIND THAT THE ASSESSEE HAS NOT CARRIED OUT ANY CHAR ITABLE ACTIVITY. THE ASSESSEE HAS NOT ABLE TO PRODUCE ANY MATERIAL THAT THE LETTING OUT OF THE PROPERTY THEREBY THE ASSESSEE SOCIETY IS CARRYING T HE CHARITABLE ACTIVITY. THEREFORE, WE HOLD THAT THE ASSESSEE IS NOT ELIGIBL E FOR CLAIMING EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT. THE LD. CIT(A) , BY CONSIDERING ALL THE I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 9 FACTS CAME TO A CORRECT CONCLUSION. 11. IN SO FAR AS UNUTILIZED SURPLUS IS CONCERNED, FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12, THE LD. CIT(A) HAS DIRECTED TH E ASSESSING OFFICER TO TREAT THE SOCIETY AS AOP AND DIRECTED TO TAX ACCORD INGLY. WE FIND THAT THE LD. CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER T O TREAT THE ASSESSEE SOCIETY AS AN AOP 12. IN SO FAR AS THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT VARIOUS GROUNDS RAISED BY THE ASSESSEE BEFORE THE L D. CIT(A) HAS NOT BEEN CONSIDERED INDEPENDENTLY AND CONSOLIDATED ORDER WAS PASSED, IS NOT JUSTIFIED. THE ASSESSEE HAS RAISED SEVERAL GROUNDS CONSISTING OF 5 PAGES INCLUDING VARIOUS CASE LAW. WE HAVE GONE THROUGH ALL THE GROU NDS AND FIND THAT THE MATERIAL ISSUE TO BE DECIDED IS WHETHER THE ASSESSE E IS ENTITLED FOR EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT AND WHETHER THE ASSESSEE IS CARRYING OUT ANY CHARITABLE ACTIVITY. IN THE PRESENT CASE, THE L D. CIT(A), AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, CAM E TO A RIGHT CONCLUSION THAT THE ASSESSEE HAS NOT CARRIED ANY CHARITABLE ACTIVIT Y. THEREFORE, THE LD. CIT(A) IS NOT REQUIRED TO SEE EACH AND EVERY GROUND RATHER THAN CONSIDERING THE POINT AT ISSUE. WE FIND THAT THE LD. CIT(A) IS FULLY JUST IFIED IN PASSING THE CONSOLIDATED ORDER. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSE E FOR THE ASSESSMENT YEAR 2010-11 IS DISMISSED. 13. IN SO FAR AS ASSESSMENT YEAR 2011-12 IS CONCER NED, THE FACTS AND CIRCUMSTANCES AND THE ISSUE RAISED BY THE ASSESSEE ARE SIMILAR TO THE I.T.A. I.T.A. I.T.A. I.T.A.. .. .NO NONO NOS SS S. .. .2116 & 2117 2116 & 2117 2116 & 2117 2116 & 2117/M/ /M/ /M/ /M/14 1414 14 & & & & C.O. N C.O. N C.O. N C.O. NOS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 OS. 02 & 03/M/15 10 ASSESSMENT YEAR 2010-11 AND THEREFORE NO SEPARATE A DJUDICATION IS REQUIRED. ACCORDINGLY, THE APPEAL FILED FOR THE ASSESSMENT YE AR 2011-12 IS ALSO DISMISSED. 14. SO FAR AS CROSS OBJECTIONS FILED BY THE REVENU E FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED AS INFRUCTUOUS, AS W E HAVE DISMISSED THE APPEALS FILED BY THE ASSESSEE. 15. IN THE RESULT, BOTH THE APPEALS FILED BY THE A SSESSEE AND THE CROSS OBJECTIONS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 29 TH OF MAY, 2015 AT CHENNAI. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 29.05.2015 VM/- 0 ( *#,23 43/, /COPY TO: 1. &' / APPELLANT, 2. *+&' / RESPONDENT, 3. 5 ( ) /CIT(A), 4. 5 /CIT, 5. 36! *#,# /DR & 6. !7' 8 /GF.