DDIT, CHENNAI V. Karthik Art Festival Trust, CHENNAI

ITA 1633/CHNY/2014

• Counselvise Citation: 163321714 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: A S SRIRAMAN
• Section: 11; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL S M C BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.1633/MDS/2014 & ./ ITA NO.427/MDS/2015 ' #$' / ASSESSMENT YEARS : 2009-10 & 2010-11 THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS)-IV, INCOME TAX OFFICER, WARD 1 (EXEMPTIONS), CHENNAI - 600 034. V. M/S KARTHIK ART FESTIVAL TRUST, BHARGAVI FLAT NO.F-1, FIRST FLOOR, NO.16 (OLD NO.39), BHEEMANNA MUDALI GARDEN STREET, ALWARPET, CHENNAI - 600 018. PAN : AAATK 3060 A (&'/ APPELLANTS) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT ()&' * + / RESPONDENT BY : SH. A.S. SRIRAMAN, ADVOCATE , # * -. / DATE OF HEARING : 23.10.2015 /0$ * -. / DATE OF PRONOUNCEMENT : 20.11.2015 / O R D E R THESE APPEALS OF THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VII, CHENNAI, AND PERTAIN TO ASSESSMENT YEARS 2009-10 AN D 2010-11. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, I 2 I.T.A. NO.1633/MDS/14 I.T.A. NO.427/MDS/15 HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF TH E SAME BY THIS COMMON ORDER. 2. SHRI A.V. SREEKANTH, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSEE-TRUST WAS REGISTERED UN DER SECTION 12AA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT '). DURING THE YEARS UNDER CONSIDERATION, THE ASSESSEE RECEIVED SP ONSORSHIP, GATE SALES AND INTEREST TO THE EXTENT OF ` 37,50,082/- AND ` 35,35,643/- RESPECTIVELY. SINCE THE ASSESSEE HAS RECEIVED INCO ME FROM THE ACTIVITIES WHICH ARE IN THE NATURE OF TRADE, COMMER CE, ETC., THE ASSESSING OFFICER BY PLACING RELIANCE ON THE PROVIS IONS OF SECTION 2(15) OF THE ACT, FOUND THAT THE ASSESSEE IS NOT EL IGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. ACCORDINGLY , THE ASSESSEE- TRUST WAS TREATED AS AOP AND TAX WAS LEVIED IN RESP ECT OF THE PROFIT EARNED BY THE ASSESSEE. HOWEVER, ON APPEAL BEFORE THE CIT(APPEALS), THE CIT(APPEALS) FOUND THAT THE OBJEC T OF THE ASSESSEE-TRUST IS PROMOTION OF FINE ARTS, DANCE, MU SIC AND EDUCATION. THE SALE OF GATE PASS AND INTEREST ARE NOT RECEIVED IN RESPECT OF SERVICE RENDERED THROUGH ANY TRADE OR CO MMERCE, THIS WAS RECEIVED IN THE COURSE OF CARRYING ON CHARITABL E ACTIVITIES IN PURSUANCE OF THE OBJECT OF THE TRUST. THEREFORE, T HE CIT(APPEALS) 3 I.T.A. NO.1633/MDS/14 I.T.A. NO.427/MDS/15 FOUND THAT ADVANCEMENT OF MUSIC, DANCE AND FINE ART S CANNOT BE CONSIDERED TO BE IN THE NATURE OF TRADE, COMMERCE O R BUSINESS. ACCORDING TO THE LD. D.R., THE ASSESSEE RECEIVED IN COME ON SALE OF GATE PASS AND INTEREST INCOME, THEREFORE, IT IS SER VICE RENDERED IN RESPECT OF TRADE AND COMMERCE. 3. ON THE CONTRARY, SH. A.S. SRIRAMAN, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE-TRUST WAS EST ABLISHED FOR EDUCATION, PROMOTION OF MUSIC, DANCE, FINE ARTS, ET C. IN THE COURSE OF CARRYING ON ITS CHARITABLE ACTIVITIES, THE ASSES SEE HAS SOLD GATE PASS AND ALSO RECEIVED SPONSORSHIP AND INTEREST INC OME. OTHER THAN THESE, THE ASSESSEE HAS NOT CARRIED OUT ANY TR ADE OR COMMERCE; THE ASSESSEE HAS NOT RENDERED ANY SERVICE IN TRADE OR COMMERCE, THEREFORE, THE CIT(APPEALS) HAS RIGHTLY A LLOWED THE CLAIM OF THE ASSESSEE. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THE ASSESSEE- TRUST WAS ESTABLISHED WITH AN OBJECT OF PROMOTION O F DANCE, MUSIC, FINE ARTS AND EDUCATION. IN THE COURSE OF CARRYING ON ITS CHARITABLE ACTIVITIES, THE ASSESSEE HAS RECEIVED SPONSORSHIP F EE, INCOME ON SALE OF GATE PASS AND INTEREST INCOME. OTHER THAN THESE ACTIVITIES, 4 I.T.A. NO.1633/MDS/14 I.T.A. NO.427/MDS/15 THE ASSESSEE ADMITTEDLY DID NOT CARRY ON ANY OTHER ACTIVITIES. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ASSESSEE HAS NOT CARRIED ON ANY TRADE, COMMERCE OR BUSINESS ACTIVITY OTHER THAN CARRYING ON ITS CHARITABLE ACTI VITIES IN FURTHERANCE OF ITS OBJECT. NO SERVICE WAS RENDERED IN ANY TRAD E OR COMMERCE BY THE ASSESSEE. IN THOSE CIRCUMSTANCES, THIS TRIBUNA L FINDS NO REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY, THE SAME IS CONFIRMED. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED ON 20 TH NOVEMBER, 2015 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 20 TH NOVEMBER, 2015. KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANTS 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-VII, CHENNAI-34 4. DIT (EXEMPTIONS), CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.