PRABHODHAN PRKASHAN, MUMBAI V. ITO R II (1), MUMBAI

ITA 1879/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70733 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 26-06-2013
• Assessment Year: 1998-1999
• Appeal Filed On: 19-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Business expenditure; Charitable institution; Capital expenditure
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI , ! ! ! ! '! !, $ BEFORE SHRI SANJAY ARORA, A. M. AND SHRI VIJAY PAL RAO, J. M. ./ I.T.A. NOS. 1879/M/2012, 5179/M/2010, 7477/M/2011, 8490/M/2010 & 1880/M/2012 ( ' ( !)( ' ( !)( ' ( !)( ' ( !)(/ // / ASSESSMENT YEARS: 98-99, 00-01, 03-04, 07-08 & 08-0 9) PRABODHAN PRAKASHAN SADGURU DARSHAN, NAGU SAYAJI WADI, DAINIK SAMANA MARG, MUMBAI-400 025 ' ' ' ' / VS. ITO (EXEMPTIONS), RANGE II(1), PIRAMAL CHAMBERS, PAREL, MUMBAI * ./ + ./ PAN/GIR NO. AAATP 3410 F ( *, / APPELLANT ) : ( -.*, / RESPONDENT ) *, / / APPELLANT BY : SHRI ANIL SATHE -.*, 0 / / RESPONDENT BY : SHRI RAJARSHI DWIVEDY '! 0 12 / // / DATE OF HEARING : 26.06.2013 3) 0 12 / DATE OF PRONOUNCEMENT : 21.08.2013 4 / O R D E R PER BENCH: THESE ARE THE APPEALS BY THE ASSESSEE FOR FIVE YEAR S, BEING ASSESSMENT YEARS (A.Y.) 1998-99, 2000-01, 2003-04, 2007-08 AND 2008- 09, BEING CONSECUTIVE TO THE DISPOSAL OF ITS APPEAL BY THE ORDER BY THE COMMISSI ONER OF INCOME TAX (APPEALS)-1, MUMBAI (CIT(A) FOR SHORT), CONTESTING THE ASSESSM ENTS U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER). THE APPEALS RAIS ING COMMON ISSUE/S WERE HEARD TOGETHER AND ARE, THEREFORE, BEING DISPOSED OF VIDE A COMMON, CONSOLIDATED ORDER. 2 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) THE RESPECTIVE CASES 2.1 THE ASSESSEE, REGISTERED AS A PUBLIC CHARITABLE TRUST UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 SINCE SOME TIME IN 1988, IS CARRYING ON I TS ACTIVITIES SINCE JANUARY, 1989. IT IS ALSO REGISTERED WITH THE DIRECTOR OF THE INCOME TAX (EXEMPTIONS) U/S.12A OF THE ACT. THE ACTIVITY BEING CARRIED OUT BY THE TRUST IS THE PUBL ISHING OF A DAILY BY THE NAME DAINIK SAAMANA. OVER TIME THOUGH, OTHER THAN THIS PUBLICA TION, A DAILY BY THE NAME DOPAHAR KA SAAMANA AND WEEKLY MARMIK, WERE ALSO ADDED. T HE ASSESSEE CLAIMS THAT ITS PUBLISHING ACTIVITY IS IN NATIONAL INTEREST AND, TH EREFORE, MUST BE CONSIDERED AS TOWARD A CHARITABLE OBJECT INASMUCH AS THE ENTIRE ACTIVITY O F PUBLICATION IS AN ACTIVITY INTENDED FOR THE OBJECTS OF THE TRUST (LISTED AS UNDER) WHICH AR E CHARITABLE IN NATURE: I. TO ARRANGE AND TO SPONSOR THE VARIOUS PROGRAMMES AN D ACTIVITIES FOR PROMOTING THE NATIONAL INTEREST; II. TO OPEN, FOUND AND TO ESTABLISH THE LIBRARIES AND R EADING ROOMS AND TO RUN THE SAME; III. TO CARRY ON THE CHARITABLE ACTIVITIES IN LITERACY, CULTURAL, SCIENTIFIC AND SOCIAL FIELDS; IV. PROMOTION AND PROPAGATION OF IDEOLOGIES, OPINIONS A ND IDEAS FOR FURTHERANCE OF NATIONAL INTEREST AND FOR THIS PUBLISHING OF BOO KS, ANNUALS MAGAZINES, WEEKLIES, DAILIES, AND OTHER PERIODICALS AS ALSO ES TABLISHING AND RUNNING PRINTING PRESSES FOR THE SAME. THE ASSESSEES ALTERNATE CONTENTION IS THAT EVEN IF PUBLICATION IS REGARDED AS A BUSINESS, SEPARATE BOOKS OF ACCOUNTS FOR THE SAME H AVING BEEN MAINTAINED, THE ACQUISITION OF THE FIXED ASSETS OF ITS BUSINESS BE CONSIDERED A S TOWARD THE APPLICATION OF THE TRUSTS INCOME FOR CHARITABLE PURPOSES. 2.2 THE REVENUES CASE, ON THE OTHER HAND, IS THAT THE ASSESSEE IS ENGAGED ONLY IN PUBLICATION ACTIVITY, UNDERTAKEN ON COMMERCIAL LINE S IN AN ORGANIZED AND SYSTEMATIC MANNER, SO THAT IT IS ONLY A BUSINESS ACTIVITY. THE RE IS, ACCORDINGLY, NO QUESTION OF EXEMPTION ON THE SURPLUS U/S.11. THAT IS, NO EXEMPT ION EITHER U/S.11(1) OR SECTION 11(2) IS EXIGIBLE IN THE ABSENCE OF ANY CHARITABLE ACTIVITY BEING UNDERTAKEN. THE ACQUISITION OF THE 3 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) ASSETS IS ONLY TOWARD EXPANSION OF THE PUBLICATION BUSINESS. A BUSINESS COULD BE REGARDED AS A PROPERTY HELD UNDER TRUST, AND ITS INCOME, ACC ORDINGLY, CONSIDERED FOR EXEMPTION U/S.11 ON APPLICATION FOR CHARITABLE PURPOSES ONLY WHERE THE BUSINESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST, WHILE NO SUCH OBJECTIVE IS BEING PURSUED IN THE INSTANT CASE. RELIANCE FOR THE PURPOSE IS PLACED ON THE DECISIONS IN THE CASE OF ASST. CIT VS. THANTHI TRUST [2001] 247 ITR 785 (SC) AND IDEAL PUBLICATIONS TRUST VS. CIT [2008] 172 TAXMAN 199 (KER.) [305 ITR 143]. AGGRIEVED, THE AS SESSEE IS IN SECOND APPEAL. THE STATE OF ADJUDICATION 3.1 THE PRINCIPAL GROUNDS OF APPEAL RAISED BY THE A SSESSEE FOR ALL THE YEARS UNDER REFERENCE ARE AS UNDER: A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN CONFIRMING THE TREATMENT OF PUBLICATION OF DAINIK S AMANA AS A BUSINESS ACTIVITY NOT ELIGIBLE FOR EXEMPTION U/S.11 OF THE I .T. ACT. B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT RS.XXXX INCURRED TOWARDS PURCHASE OF FIXED ASS ETS WAS IN THE NATURE OF APPLICATION OF INCOME FOR OBJECTS OF THE TRUST A ND NOT FOR EXPANSION OF BUSINESS AS TREATED BY THE ASSESSING OFFICER. C) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THAT WHILE CONSIDERING APPLICATION OF INCOME, DEFICITS OF THE EARLIER YEARS HAD TO BE CONSIDERED AND A HOLISTIC V IEW HAD TO BE TAKEN. THIS BEING THE SECOND ROUND BEFORE THE TRIBUNAL FO R SOME YEARS, WHILE ITS ORDERS BEING RELIED UPON FOR OTHERS, IT WOULD BE RELEVANT TO EXTRACT THE RELEVANT DIRECTIONS BY IT OR OTHERWISE STATE THE GIST THEREOF. 3.2 FOR AYS. 1998-99 AND 2003-04 (IN ITA NOS.292 & 293/MUM/2007 DATED 30.03.2009/PB PGS.58-61), THE TRIBUNAL, AFTER HEARI NG THE PARTIES, FORMULATED THE ISSUE ARISING FOR ITS CONSIDERATION AS BEING AS TO WHETHER THE SURPLUS FUNDS UTILIZED FOR ACQUIRING OF ASSETS FOR BUSINESS PURPOSES WOULD AMOUNT TO APP LICATION OF INCOME FOR CHARITABLE PURPOSE/S OR NOT (REFER PARA 6). AFTER REPRODUCING PARAS 40 AND 41 O F THE TRIBUNALS ORDER 4 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) FOR A.Y. 1989-1990 (IN ITA NOS. 2661 (BOM) OF 1993, DATED 10.02.1994/REPORTED AT [1994] 50 ITD 135 (BOM.)), IT HELD AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE RECORD OF THE CASE. THE SHORT POINT FOR CONSIDERATION IS WHET HER THE SURPLUS FUNDS UTILIZED FOR ACQUISITION OF ASSETS FOR BUSINESS PUR POSES WOULD AMOUNT TO APPLICATION OF INCOME OR NOT FOR CHARITABLE PURPOSE . THERE IS NO DISPUTE OVER THE FACT THAT RUNNING OF DAINIK SAAMANA WAS A CHARITABLE PURPOSE AS HELD BY THE TRIBUNAL VIDE ORDER DATED 10 TH FEBRUARY, 1994 FOR A.Y. 1989-90 IN ASSESSEES OWN CASE IN PARA 40 OF ITS ORDER WHIC H IS REPRODUCED HERE- UNDER: 40. FOR THE ABOVE REASONS, WE HOLD THAT THE OBJECT OF RUNNING DAINIK SAAMANA WAS A CHARITABLE PURPOSE. THE DEPART MENT HAS NOT BROUGHT OUT ANY OBJECTION TO ANY OTHER OBJECTS OF T HE TRUST, THOUGH THEY HAVE BEEN REFERRED TO AND, THEREFORE, WE HOLD THAT THE OBJECTS OF THE TRUST, AS A WHOLE, WERE FOR CHARITABLE PURPOSE WITHIN THE MEANING OF S.2(15) OF THE ACT. IN ORDER TO DECIDE THE ISSUE, WE REFER TO PARA 41 O F THE TRIBUNALS ORDER, WHICH HAS LAID DOWN THE TEST FOR DETERMINING THE AP PLICATION OF INCOME FOR CHARITABLE PURPOSE AS UNDER: WE HAVE ALREADY HELD THAT THE DONATIONS RECEIVED B Y THE TRUST WERE NOT EXEMPT UNDER SECTION 11(1)(D) OF THE ACT. HOWEV ER, EVEN OTHER VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLLY FOR CHARITABLE PURPOSES SHALL, FOR THE PURPOSE OF S.11 BE DEEMED TO BE INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLL Y FOR CHARITABLE PURPOSES. THIS IS LAID DOWN IN S.12 OF THE ACT. FUR THER, ACCORDING TO S.11(1)(A) OF THE ACT, IN COME DERIVED FROM PROPERT Y HELD UNDER TRUST WHOLLY FOR CHARITABLE PURPOSES SHALL NOT BE INCLUDE D IN THE TOTAL INCOME TO THE EXTENT TO WHICH SUCH INCOME IS APPLIE D TO SUCH PURPOSES IN INDIA. THE LEARNED COUNSEL FOR THE ASSE SSEE HAS SOUGHT EXEMPTION UNDER S.11(1)(A) FOR THE CONTRIBUTIONS ON THE GROUND THAT THE CONTRIBUTIONS HAVE BEEN APPLIED WHOLLY FOR CHAR ITABLE PURPOSE BY UTILIZING THEM IN RUNNING DAINIK SAAMANA. THOUGH TH E ARGUMENT LOOKS ATTRACTIVE IN THE FIRST INSTANCE, A LITTLE RE FLECTION SHOWS THAT RUNNING DAINIK SAAMANA DOES NOT AMOUNT TO APPLICATI ON OF INCOME AT ALL BUT AMOUNTS TO EARNING OF INCOME WHICH INCLU DES LOSS. EARNING OF INCOME AND APPLICATION OF INCOME ARE OPPOSITES. THE EXPENDITURE INCURRED IN THE COURSE OF RUNNING OF DAINIK SAAMANA IS NOT EXPENDITURE INCURRED OUT OF INCOME EARNED BUT, ON T HE OTHER HAND, IS EXPENDITURE FOR THE PURPOSE OF EARNING THE RECEIPTS AND IS, THEREFORE, A DEDUCTION FOR THE VERY COMPUTATION OF INCOME. ONL Y THAT 5 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) EXPENDITURE CAN BE DESCRIBED AS APPLICATION OF INCO ME WHICH IS NO DEDUCTIBLE FOR THE PURPOSE OF COMPUTATION OF INCOME . WHEN THIS TEST IS APPLIED, THE CONTENTION OF THE LEARNED COUNSEL F OR THE ASSESSEE IS FOUND UNACCEPTABLE. WE, ACCORDINGLY, REJECT THE SAM E. FROM THE FINDINGS OF THE TRIBUNAL, IT IS EVIDENT TH AT ONLY THAT EXPENDITURE WHICH IS UTILIZED FOR EARNING INCOME CANNOT BE TREA TED AS APPLICATION OF INCOME TOWARDS THE CHARITABLE OBJECTIVES. THE TRIBU NAL HAS SPECIFICALLY HELD THAT ONLY THAT EXPENDITURE CAN BE DESCRIBED AS APPLICATION OF INCOME WHICH IS NOT DEDUCTIBLE FOR THE PURPOSE OF COMPUTAT ION OF INCOME. THEREFORE, IN THE LIGHT OF THESE OBSERVATIONS, WE H AVE TO EXAMINE WHETHER THE ACQUISITION OF FIXED ASSET HAS BEEN CLAIMED AS EXPENDITURE AGAINST THE COMPUTATION OF INCOME OR NOT. ADMITTEDLY, THE AMOUN T SPENT FOR ACQUISITION OF FIXED ASSETS IS NOT DEDUCTIBLE FROM THE COMPUTAT ION OF INCOME BUT ONLY DEPRECIATION IS ALLOWABLE IN RESPECT OF BUILDING ET C. BUT NOT LAND. THEREFORE, EXPENDITURE IN RESPECT OF THOSE FIXED ASSETS IS RES PECT OF WHICH DEPRECIATION HAS BEEN CLAIMED AND ALLOWED TO THE ASSESSEE, CANNO T BE TREATED AS APPLICATION OF INCOME . HOWEVER, THE BALANCE AMOUNT SPENT FOR ACQUISITION FOR FIXED ASSETS, ON WHICH NO DEPRECIATION HAS BEEN ALLOWED, IS TO BE TREATED AS APPLICATION OF INCOME AS PER THE TEST LAID DOWN BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 1989-90 (SUPRA). WE, A CCORDINGLY, RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECID E THE SAME IN THE LIGHT OF OUR ABOVE OBSERVATIONS IN THE LIGHT OF THE DECISION OF THE TRIBUNAL FOR A.Y. 1989-90 (SUPRA) AND TO DETERMINE THE APPLICATION OF INCOME ACCORDINGLY. FOR A.Y. 2000-01 (IN ITA NO.8043/MUM/2003 DATED 17 .01.2007/PB PG.11-13), THE TRIBUNAL AGREED WITH THE ASSESSEE THAT ITS APPE AL, RAISING THE SAME GROUNDS, WAS COVERED BY THE ORDER BY THE TRIBUNAL FOR THE EARLIE R YEARS, BEING FOR A.YS. 1992-93, 1995- 96 AND 1996-97 (IN ITA NO.340/MUM/1998, 1492/MUM/20 00 AND 5722/MUM/1999 DATED 25.05.2004/PB PGS.52-57), WHEREIN THE TRIBUNAL HAD SET ASIDE THE MATTER BACK TO THE FILE OF THE A.O. FOR EXAMINING THE ISSUE OF EXEMPTION U/ S.11 IN LIGHT OF THE DECISION BY THE APEX COURT IN THE CASE OF THANTHI TRUST (SUPRA). IT, ACCORDINGLY, REMITTED THE MATTER BACK TO THE FILE OF THE A.O. WITH LIKE DIRECTIONS. EVEN THOUGH THE TRIBUNAL PER ITS SUBSEQUENT ORDER DATED 30.03.2009 FOR A.Y. 1996-97 (IN ITA NO. 291/MUM/2007, RENDERED ALONG WITH THAT FOR A.YS. 1998-99 AND 2003-04/PB PGS.58-6 1), HAD ALSO CONSIDERED ITS EARLIER ORDER FOR THE SAID YEAR DATED 25.05.2004 (SUPRA), T HE FINDINGS THEREBY ARE ALSO RELEVANT AND TELLING, WHICH WE REPRODUCE AS UNDER: 6 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) 9. WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE FACTS AND MATERIALS ON RECORD INCLUDING THE CASE LAWS RELIED UPON BY TH E PARTIES. MAY BE IT IS TRUE THAT THE TRIBUNAL IN ITS EARLIER ORDER CITED S UPRA HAS GIVEN A FINDING THAT THE RUNNING OF NEWPAPER DAINIK SAMNA WAS FOR CHARIT ABLE PURPOSE WITHIN THE MEANING OF SECTION 2(15) AS IT STOOD FROM 01.04 .1984. HOWEVER, IN VIEW OF THE LATEST DECISION OF THE HONORABLE SUPREME COU RT REPORTED IN 247 ITR 785 (SC), WHAT IS TO BE SEEN IS, WHETHER THE INCOME OF THE NEWSPAPER HAS BEEN UTILIZED FOR THE PURPOSE OF THE TRUST, EVEN TH OUGH, THE OBJECTS MAY BE CHARITABLE AND THIS ASPECT OF THE MATTER, AS RIGHTL Y BEEN CONTENDED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, WERE NOT PUT T O TEST EITHER BY THE ASSESSING OFFICER OR BY THE COMMISSIONER OF INCOME TAX (APPEALS). IN VIEW OF THIS, WE ARE INCLINED TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RECORD A FINDING AS TO WHETHER THE INCOME FROM THE NEWSPAPER HAS BEEN UTILIZED FOR THE OBJECTS OF THE TRUST DURING THE RELEVANT ASSESSMENT YEARS AND IF SO TO FOLLOW THE D ECISION OF HONORABLE SUPREME COURT (CITED SUPRA) IF THE INCOME IS SO UTI LIZED AND OTHERWISE TO DECIDE ACCORDING TO LAW . THUS, THESE APPEALS OF THE ASSESSEE ARE ALLOWED F OR STATISTICAL PURPOSE ONLY. [ EMPHASIZING BY UNDERLYING, OURS ] 3.3 EACH OF THE FOREGOING ORDERS BY THE TRIBUNAL; T HIS BEING THE SECOND ROUND BEFORE IT FOR SOME YEARS, WITH THE SAID ORDERS ALSO BEARING C ROSS REFERENCE TO EACH OTHER, HAVE BEEN CAREFULLY PERUSED BY US. THIS IS, IN FACT, INCUMBEN T AS THESE ORDERS HAVE ATTAINED FINALITY INASMUCH AS THEY HAVE NOT BEEN CHALLENGED, OR SUCCE SSFULLY SO, BY EITHER PARTY. READING THE SAME IN CONJUNCTION, BEING ALSO REQUIRED TO BE READ IN HARMONY, WE OBSERVE NO INCONSISTENCY; RATHER, A CONSISTENCY AND CONFORMITY IN ALL THE FOUR ORDERS BY THE TRIBUNAL, REFERRED TO ABOVE, WHICH HAVE COME TO OUR NOTICE. IN OTHER WORDS, THE FINDINGS ARE CLEAR AND BINDING. IN FACT, THE SAME WOULD APPLY EVEN FOR THE YEARS BE FORE US NOT COVERED THEREBY, I.E., A.YS. 2007-08 AND 2008-09, UNLESS OF COURSE THE ASSESSEE IS ABLE TO SHOW AS TO HOW THE SAME ARE NOT APPLICABLE FOR THOSE YEARS. IN FACT, NO MATERIAL HAS BEEN BROUGHT ON RECORD TO DISTURB AND/OR CONTROVERT THE FINDINGS BY THE AUTHORITIES BELOW FOR ALL THE YEARS, WHICH ARE ALSO CONSISTENT WITH EACH OTHER, P URSUANT TO THE ORDERS BY THE TRIBUNAL. FINDINGS 4.1 WE BEGIN BY ENUMERATING THE FINDINGS BY THE TRI BUNAL IN THE ASSESSEES CASE IF ONLY FOR COHERENCE AND BETTER COMPREHENSION, AS UNDER: 7 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) A) THE ACTIVITY OF PUBLICATION OF DAINIK SAAMANA (AN D OTHERS) IS A BUSINESS ACTIVITY AND, ACCORDINGLY, THE INCOME OR LOSS THERE -FROM IS TO BE ASSESSED AS BUSINESS INCOME UNDER CHAPTER IV-D OF THE ACT; B) CONSEQUENTLY, ALL THE EXPENSES INCURRED IN THE COUR SE OF THE SAID BUSINESS, INCLUDING ACQUISITION OF FIXED ASSETS OF THE BUSINE SS, HAS TO BE NECESSARILY CONSIDERED AS TOWARD EARNING BUSINESS INCOME. THE S AME CANNOT, THEREFORE, BE CONSIDERED AS TOWARD APPLICATION OF INCOME. THE ASS ESSEE ACCORDINGLY WOULD BE ENTITLED TO DEDUCTION OF DEPRECIATION U/S.32, I.E., AS EXIGIBLE IN COMPUTATION OF BUSINESS INCOME U/S.28; AND C) WHETHER THE ASSESSEE WOULD BE ENTITLED TO EXEMPTION U/S.11 WOULD DEPEND ON THE SATISFACTION OF THE PARAMETERS OF SECTION 11 (4) R.W.S. 11(4A), FOR WHICH REFERENCE IS MADE TO THE DECISION BY THE APEX COURT IN THE CASE OF THANTHI TRUST (SUPRA). IN FACT, THESE FINDINGS HAVE ALSO BEEN CULLED OUT I N SOME OF THE ASSESSMENT ORDERS, AS FOR A.YS. 1989-99 & 2003-04, AND MUCH IN THE SAM E FORM. WE ARE UNDER THE CIRCUMSTANCE UNABLE TO SEE AS TO HOW THE ASSESSEES GROUNDS ARE MAINTAINABLE BEFORE US. THIS IS AS THE ONLY ISSUE THAT SURVIVES, POST A SER IES OF THE ORDERS BY THE TRIBUNAL, IS THE ALLOWANCE OF EXEMPTION U/S.11, I.E., WHERE AND TO T HE EXTENT THE REQUIREMENT OF LAW STANDS MET. RATHER, IT WAS INCUMBENT ON THE PART OF LD. AR , IF ALSO NOT THE LD. DR, TO BRING TO OUR NOTICE AS TO HOW THE INCOME FOR THE AYS. 1992-93, 1 995-96 & 1996-97 HAS BEEN FINALLY DETERMINED, I.E., SUBSEQUENT TO THE DIRECTIONS BY T HE TRIBUNAL FOR THESE YEARS PER ITS ORDER DATED 25.05.2004 (SUPRA) AND 30.03.2009 (SUPRA). IN FACT, THE ASSESSEE ITSELF ADMITS TO THE PUBLICATION ACTIVITY AS CONSTITUTING BUSINESS, CLAI MING OF THE SAID BUSINESS AS BEING INCIDENTAL TO THE ATTAINMENT OF ITS OBJECTS, I.E., PROMOTING NATIONAL INTEREST, BY CREATING PUBLIC AWARENESS, SO THAT ITS INCOME WOULD BE COMPU TED UNDER CHAPTER IV-D. ACCORDINGLY, THE GROUND ASSAILING THE COMPUTATION O F INCOME OR LOSS, AS THE CASE MAY BE, FOR DIFFERENT YEARS, U/C IV-D, THOUGH RAISED PER TH E MEMO OF APPEAL, STOOD NOT PRESSED BEFORE US DURING HEARING . 4.2 NEXT, WE CONSIDER THE ASSESSEES CLAIM OF HAVIN G APPLIED ITS INCOME FOR THE RELEVANT YEARS TO ITS OBJECTIVES, WHICH HAVE BEEN C ONSIDERED CHARITABLE, SO THAT EXEMPTION 8 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) U/S.11 OUGHT TO HAVE BEEN ALLOWED. WE FIRSTLY FIND THAT NO CLAIM WHATSOEVER IN THE REGARD HAS BEEN MADE FOR THREE OF THE FIVE YEARS UNDER REF ERENCE. FOR A.Y. 2000-01, THE ONLY CLAIM, AS REFLECTED PER THE INCOME AND EXPENDITURE ACCOUNT, IS BY WAY OF DONATION (AT RS.2,000/-) AND ELOCUTION COMPETITION (AT RS.15,000 /-). CONSIDERING THE SURPLUS OF RS.23 LACS FOR THAT YEAR, THE REVENUE FOUND ITSELF UNABLE TO HOLD THAT THE BUSINESS OF THE PUBLICATION WAS BEING, FIRSTLY, RUN INCIDENTAL TO T HE ATTAINMENT OF THE OBJECTIVES OF THE TRUST AND, SECONDLY, OF HAVING BEEN ACTUALLY UTILIZ ED FOR THOSE OBJECTS. FOR A.Y. 2007-08, THE ONLY OTHER YEAR FOR WHICH SOME EXPENDITURE WAS CLAIMED TOWARD APPLICATION OF INCOME, THE CLAIM, MADE AT RS.24.93 LACS (DETAILED AT PARA 4 OF THE ASSESSMENT ORDER), WAS FOUND TO BE IN FACT COMPRISING EXPENSES RELATING TO PUBLICATION OF THE NEWSPAPER AND NOT TOWARD THE OTHER OBJECTS OF THE TRUST, BEING IN THE NATURE OF FINANCE CHARGES AND SUNDRY BALANCES WRITTEN OFF. THE CLAIM OF APPLICATION OF I NCOME FOR ANOTHER SUM OF RS.17.39 LACS ALSO DID NOT PASS MUSTER AS THE SAME WAS TOWARD ACQ UISITION OF FIXED ASSETS OF THE SAID BUSINESS AND, CONSEQUENTLY, FOR THE EXPANSION OF TH E SAID BUSINESS. THE ASSESSEE HAVING ALSO RAISED A SPECIFIC GROUND (GD. NO.2) IN THIS RE GARD FOR A.Y. 2008-09, WE ALSO REPRODUCE THE RELEVANT FINDINGS BY THE FIRST APPELL ATE AUTHORITY, WHICH ARE UNDER CHALLENGE BEFORE US: 4.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. IT IS AN ADMITT ED FACT THAT THE APPELLANT IS DISCLOSING THE INCOME FROM PUBLICATION ACTIVITIE S AS BUSINESS INCOME AND IN A.Y. 1989-90 ALSO THE HONBLE ITAT ENDORSED THAT VIEW AND ALSO ALLOWED SET OFF U/S.71. HONBLE ITAT FOR AY 89-90 H AS ALSO HELD THAT RUNNING DAINIK SAAMANA IS A CHARITABLE PURPOSE BUT AT PARA 41, IT IS OUTLINED THAT VOLUNTARY CONTRIBUTION RECEIVED BY THE TRUST T HAT ARE UTILISED IN RUNNING DAINIK SAAMANA DOES NOT AMOUNT TO APPLICATION OF IN COME BUT IT IS AN EXPENDITURE FOR THE PURPOSE OF EARNING THE INCOME. IT IS ALSO NOTICED THAT THE APPELLANT IS ONLY ENGAGED IN PUBLICATION ACTIVITY A ND THE APPELLANT HAS USED THE INCOME OR ACQUISITION OF ASSETS USED FOR THE PU BLICATION BUSINESS WHICH CANNOT BE REGARDED AS APPLICATION TOWARDS OBJECT OF THE TRUST . THUS, THE A.O. HAS RIGHTLY DENIED THE BENEFIT U/S.11(2) AND 1 1(1)(A) OF THE I.T. ACT. GROUND NOS.1 TO 5 ARE DISMISSED. [ EMPHASIS, OURS ] 9 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) 4.3 WHETHER THE BUSINESS BEING UNDERTAKEN BY THE ASSESS EE IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OR NOT IS A QUESTION O F FACT . SIMILARLY, WHETHER ANY PART OF INCOME OF THE SAID BUSINESS HAS BEEN APPLIED FOR CH ARITABLE PURPOSES IS A PURE QUESTION OF FACT . NO MATERIAL TO CONTROVERT THE CLEAR CONCURRENT FI NDINGS ON FACT BY THE REVENUE AUTHORITIES HAS BEEN ADVANCED AT ANY STAGE OF THE P ROCEEDINGS, INCLUDING BEFORE US. A DONATION FOR A SUM OF MONEY OR CONTRIBUTION FOR AN ELOCUTION CONTEST WOULD NOT MAKE THE BUSINESS INCIDENTAL TO THE SAID ACTIVITY. IN FACT, WE FIND SUCH DONATIONS OR CONTRIBUTIONS BEING MADE BY BUSINESS HOUSES ALL THE TIME. THE REV ENUE HAS IN THIS REGARD, AND IN OUR VIEW CORRECTLY, RELIED ON THE DECISION IN THE CASE OF IDEAL PUBLICATIONS TRUST (SUPRA), RENDERED IN APPLICATION OF THE DECISION BY THE APEX COURT, INTER ALIA , IN THE CASE OF THANTHI TRUST (SUPRA). AGAIN, THE CLEAR AND APPARENT DISTINCTION BETWEEN THE EXPENSES INCURRED IN THE COURSE OF CARRYING ON THE PUBLICATION BUSINESS AND APPLICATION OF SURPLUS FOR ITS OTHER OBJECTS, HAVE BEEN ABUNDANTLY CLARIFIED BY THE TRIB UNAL TIME AND AGAIN BEGINNING WITH ITS ORDER FOR A.Y. 1989-90 (PER PARA 41), WHICH FINDS R EPRODUCTION/REFERENCE, BOTH IN ITS SUBSEQUENT ORDERS (AS DATED 30.03.2009, SUPRA) AS W ELL AS BY THE ORDERS BY THE AUTHORITIES BELOW (REFER PARA 3.2/PG.4 OF THE ORDER). THE DISTI NCTION BETWEEN THE TWO IS BASIC, CONCEPTUAL AND QUINTESSENTIAL. THE TWO EXPENSES, AS EXPLAINED BY THE TRIBUNAL, ARE IN CONTRADISTINCTION TO EACH OTHER, WHILE ONE IS FOR C ARRYING OF THE BUSINESS ACTIVITY (OF PUBLICATION, IN THE INSTANT CASE), FOR WHICH SEPARA TE BOOKS ARE TO BE MAINTAINED, TO BE ADJUSTED IN COMPUTING THE BUSINESS INCOME, THE OTHE R IS TOWARD THE APPLICATION OF THE INCOME SO DETERMINED. ACCORDINGLY, THE TRIBUNAL ALS O DIRECTED ALLOWANCE OF DEPRECIATION U/S.32 ON THE SUMS EXPENDED TOWARD ACQUISITION OF F IXED ASSETS OF THE BUSINESS, WHERE DEPRECIABLE, AND WHICH WE FIND TO HAVE BEEN ALLOWED BY THE REVENUE. THE SAID ASSETS, AS ALSO LAND, FORM PART OF THE FIXED ASSETS/CAPITAL OF THE ASSESSEES BUSINESS UNDERTAKING. NO CLAIM QUA THESE SUMS AS TOWARDS THE APPLICATION OF BUSINESS, THUS, SURVIVES, SO THAT THE ASSESSEES RELEVANT GROUND/S, APART FROM BEING WITH OUT MERIT, IS NOT MAINTAINABLE AT THE THRESHOLD; THE REVENUES ACTION BEING ONLY IN CONFO RMITY WITH THE ORDER/S BY THE TRIBUNAL, WHICH HAVE SINCE ATTAINED FINALITY. AS WOULD BE NOT ED, THIS IS PRECISELY THE ISSUE AS DISCERNED BY THE TRIBUNAL VIDE ITS ORDER DATED 30.0 3.2009 (SUPRA) (VIDE PARA 6 OF ITS ORDER, 10 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) REPRODUCED ABOVE). THE ASSESSEES SPECIFIC GROUND I N THIS RESPECT, AS VIDE GROUND NO. 3 (FOR A.Y. 1998-99), GROUND NO.2 (FOR A.Y. 2007-08) AND GROUND NO.2 (FOR A.Y. 2008-09) ARE, ACCORDINGLY, DISMISSED. DEDUCTION U/S. 11(1)(A): IF EXIGIBLE? 5.1 WE, NEXT, TAKE UP THE FINAL OBJECTION BY THE AS SESSEE, I.E., OF IT BEING ENTITLED TO, IN ANY CASE, EXEMPTION U/S. 11(1)(A) BY WAY OF CARRY O VER OF THE SURPLUS FOR EACH YEAR, I.E., AT THE RATE OF 15% THEREOF AND, FURTHER, IN TERMS O F ITS APPLICATION FOR ACCUMULATION U/S.11(2), WHERE MOVED, AS FOR A.Y. 2003-04. THIS A SPECT, THOUGH NOT RAISED SPECIFICALLY, WOULD STAND TO BE COVERED BY THE ASSESSEES GROUND NO.1. THE SAID PLEA WAS TAKEN BY THE LD. AR ON BEING POINTED OUT BY THE BENCH DURING HEA RING THAT THE ASSESSEE HAD THROUGH- OUT SINGULARLY FAILED TO SHOW OF APPLICATION OF INC OME OVER THE YEARS FOR CHARITABLE PURPOSES. THIS LED HIM TO STATE THAT THIS HAS BEEN DUE TO DEFICIENCY OF INCOME, THOUGH NEVERTHELESS, AS THE ASSESSEE IS OBLIGED TO APPLY O NLY 75% (85%, W.E.F. A.Y. 2003-04) OF ITS INCOME FOR ANY YEAR FOR CHARITABLE PURPOSES, IT S CLAIM FOR THE BALANCE 25% (15%) THEREOF COULD NOT BE DENIED, I.E., TOWARD FUTURE AP PLICATION FOR SUCH PURPOSES. BESIDES, THE DENIAL FOR SPECIFIC ACCUMULATION U/S. 11(2), WHERE MOVED, IS AGAIN NOT VALID IN LAW. 5.2 IN OUR CONSIDERED VIEW, WHILE THE PLEA QUA STANDARD ALLOWANCE UPTO A MAXIMUM OF 25% OF THE CURRENT INCOME (15% W.E.F. A.Y. 2003-04) COULD BE VALIDLY MADE BEFORE US, THE SPECIFIC DISALLOWANCE OF THE APPLICATION FOR AC CUMULATION COULD NOT BE AGITATED WITHOUT IT BEING A SUBJECT MATTER OF ADJUDICATION B Y THE AUTHORITIES BELOW, WHOSE ORDERS DO NOT BEAR ANY SUCH, WITH THERE BEING IN FACT EVEN NO GROUND TOWARD THE SAME, AS IS THE CASE BEFORE US, BEFORE THE FIRST APPELLATE AUTHORIT Y. SO HOWEVER, AS A DEDUCTION U/S.11(2) WOULD ARISE ONLY WHERE THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S.11(1)(A), OUR ADJUDICATION TO THAT EXTENT MAY BE CONSTRUED AS TOW ARD THE CLAIM U/S.11(2) AS WELL. 5.3 WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE MATTER. THE ASSESSEES CASE IS UNMAINTAINABLE. THIS IS FOR TWO REASONS. SECTION 11 IN ITS RELEVANT PART READS AS UNDER: INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGI OUS PURPOSES. 11 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) 11. (1) SUBJECT TO THE PROVISIONS OF SECTIONS 60 T O 63, THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PR EVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME ( A ) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHO LLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INC OME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS AC CUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE E XTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIF TEEN PER CENT OF THE INCOME FROM SUCH PROPERTY; (1A) ..; ( B ) WHERE A CAPITAL ASSET, BEING PROPERTY HELD UNDER TRUST IN PART ONLY FOR SUCH PURPOSES, .. EXPLANATION. -IN THIS SUB-SECTION,- (I) (II) (III) (2) (3) (4) FOR THE PURPOSES OF THIS SECTION 'PROPERTY HEL D UNDER TRUST' INCLUDES A BUSINESS UNDERTAKING SO HELD, AND WHERE A CLAIM I S MADE THAT THE INCOME OF ANY SUCH UNDERTAKING SHALL NOT BE INCLUDED IN TH E TOTAL INCOME OF THE PERSONS IN RECEIPT THEREOF, THE [ASSESSING] OFFICER SHALL HAVE POWER TO DETERMINE THE INCOME OF SUCH UNDERTAKING IN ACCORDA NCE WITH THE PROVISIONS OF THIS ACT RELATING TO ASSESSMENT; AND WHERE ANY INCOME SO DETERMINED IS IN EXCESS OF THE INCOME AS SHOWN IN T HE ACCOUNTS OF THE UNDERTAKING, SUCH EXCESS SHALL BE DEEMED TO BE APPL IED TO PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS PURPOSES. (4A) SUB-SECTION (1) OR SUB-SECTION (2) OR SUB-SEC TION (3) OR SUB-SECTION (3A) SHALL NOT APPLY IN RELATION TO ANY INCOME OF A TRUST OR AN INSTITUTION, BEING PROFITS AND GAINS OF BUSINESS, UNLESS THE BUS INESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST OR, AS TH E CASE MAY BE, INSTITUTION, AND SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED BY SUC H TRUST OR INSTITUTION IN RESPECT OF SUCH BUSINESS. CLEARLY, THEREFORE, THE INCOME OF ANY CHARITABLE TR UST (OR INSTITUTION) DERIVED FROM PROPERTY HELD WHOLLY FOR SUCH PURPOSE, SHALL NOT FO RM PART OF THE TOTAL INCOME UNDER THE ACT WHERE AND TO THE EXTENT APPLIED FOR SUCH PURPOS ES IN INDIA. THE EXEMPTION IS NOT 12 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) AUTOMATIC BUT SUBJECT TO THE CONDITION OF THE APPLI CATION OF THE INCOME DURING THE RELEVANT PREVIOUS YEAR UPTO AT-LEAST 75% (85% W.E.F. A.Y. 20 03-04) OF SUCH INCOME. THERE IS PROVISION WITH RESPECT TO DEEMED APPLICATION PER EXPLANATION 2 TO SECTION 11(1)(A), BUT THE SAME IS ONLY UPON EXERCISE OF THE OPTION IN WRI TING BY THE ASSESSEE. TWO, THE SAME IS AVAILABLE ON THE CONDITION OF NON RECEIPT OF INCOME , OR, AT BEST DEFERS THE APPLICATION OF INCOME TO THE IMMEDIATELY FOLLOWING YEAR. THE SAME, THUS, IS YEAR AS WELL AS FACT SPECIFIC AND, AS SUCH, NEITHER APPLICABLE NOR RELEVANT IN TH E FACTS OF THE CASE, GIVEN THE GENERAL PROPOSITION BEING SOUGHT TO BE ADVANCED. IT IS, THE REFORE, ONLY UPON APPLICATION OF INCOME TO THE SPECIFIED EXTENT (75% OR 85%, AS THE CASE MA Y BE), AT THE MINIMUM, THAT THE EXEMPTION OF INCOME EXTENDS TO THE WHOLE OF SUCH IN COME. WITHOUT DOUBT, THOUGH, THE BALANCE UNAPPLIED INCOME IS TO BE NECESSARILY APPLI ED FOR CHARITABLE (OR RELIGIOUS) PURPOSES OF THE TRUST/INSTITUTION, ALBEIT SUBSEQUEN TLY. THE ASSESSEES ARGUMENT OF BEING ENTITLED TO EXEMPTION FOR THE BALANCE (25% OR 15%) WITHOUT HAVING APPLIED ANY PART OF ITS INCOME TOWARD SUCH PURPOSES, MUCH LESS TO THE SPECI FIED EXTENT, IS, THUS, DE HORS THE PROVISION/S AS WELL AS THE SCHEME OF THE ACT AND, T HEREFORE, MISCONCEIVED. TWO, THE INCOME TO BE APPLIED FOR CHARITABLE PURPOS ES IS THAT DERIVED FROM PROPERTY HELD UNDER TRUST. THE PROPERTY HELD UNDER TRUST BEING NOT SPECIFICALLY DEFINED WOULD, THEREFORE, HAVE TO BE READ AS WITHOUT LIMITA TION. THE ONLY LIMITATION STIPULATED IS PER SUB-SECTIONS (4) AND (4A) OF SECTION 11, AND IS IN RESPECT OF A BUSINESS UNDERTAKING. THE SAME STIPULATE THAT ONLY WHERE THE BUSINESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVE/S OF THE TRUST, THAT, SEPARATE BOOKS OF A CCOUNTS BEING MAINTAINED IN ITS RESPECT, COULD A BUSINESS UNDERTAKING BE CONSIDERED AS A PRO PERTY HELD UNDER TRUST. SECTION 11(1) IS TO BE READ IN CONJUNCTION AND HARMONY WITH SS. 1 1(4) AND 11(4A). IT IS, THUS, ONLY THE BUSINESS UNDERTAKING WHICH QUALIFIES AS A PROPERTY HELD UNDER TRUST WHOSE INCOME WOULD BE ELIGIBLE FOR EXEMPTION 11(1). IN THE INSTANT CAS E, THE PRINCIPAL OBJECTS OF THE TRUST ARE AS STATED AT PARA 2.1. CLAUSE (IV) COULD ONLY BE CONSI DERED AS AN EXTENSION OF CLAUSE (I) INASMUCH AS THERE IS NO CONSTRAINT ON THE AMPLITUDE OF THE WORD ACTIVITIES IN CLAUSE (I). CLAUSE (IV) ONLY STATES THE MODALITIES PER WHICH TH E OBJECTIVE OF NATIONAL INTEREST CAN BE FURTHERED, I.E., BY PROMOTING IDEOLOGIES, OPINIONS AND IDEAS, AND TOWARD THE SAME 13 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) UNDERTAKE PUBLICATION, INCLUDING RUNNING OF PRINTIN G PRESS. THE BUSINESS OF PUBLICATION HAS THUS NOT BEEN CONSIDERED AS A SEPARATE OBJECT, OR AT-LEAST AS A CHARITABLE OBJECT, IN ITSELF. THIS, IT MAY BE NOTED, IS PRECISELY WHAT TH E TRIBUNAL HAS SAID IN ITS ORDERS FOR EARLIER YEARS. THIS AGAIN WHAT STANDS CLARIFIED BY THE HON BLE COURT IN IDEAL PUBLICATIONS TRUST (SUPRA). FURTHER, THE CONTENTION THAT DISSEMINATION OF INFORMATION THROUGH PUBLICATION WOULD FALL WITHIN THE AMBIT EDUCATION, INASMUCH A S THERE IS THEREBY BUILDING OF PUBLIC OPINION AND EDUCATION OF MASSES, HAS BEEN SINCE DIS APPROVED BY THE APEX COURT IN THANTHI TRUST (SUPRA), AND WHICH RATHER WE FIND NOT TO BE THE AS SESSEES STAND/CLAIM AS WELL. AS SUCH, WHAT IS REQUIRED TO BE SHOWN IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IS THAT THE SAID PUBLICATION BUSINESS SERVES AS A VEHI CLE FOR THE ATTAINMENT OF THE OTHER OBJECTS OF THE ASSESSEE-TRUST. THE ASSESSEE HAS FAI LED IN DEMONSTRATING SO. HOW COULD, THEN, WE WONDER, ITS PUBLICATION BUSINESS BE TAKEN AS INCIDENTAL TO THE ATTAINMENT OF ITS OBJECTS, FOR IT TO BE CONSIDERED AS A PROPERTY HELD UNDER TRUST ? RATHER, NO OTHER ACTIVITY HAVING BEEN UNDERTAKEN, MUCH LESS IN A REGULAR, SYS TEMATIC MANNER, THE LD. AR WAS SPECIFICALLY QUESTIONED BY THE BENCH DURING HEARING AS TO THE PUBLICATION BUSINESS BEING INCIDENTAL TO WHAT, TO NO ANSWER BY HIM . IT IS THIS THAT LED HIM TO STATE OF LACK OF PROFI T, AND OF BEING ALLOWED, IN ANY CASE, EXEMPTION @ 25% (15%) OF INCOME U/S.11(1)(A), I.E., THE VERY QUESTION WHICH FORMS THE SUBJECT MATTER OF THIS SEGMENT OF THIS ORDER. CONCLUSION 6. GIVEN THE ORDERS BY THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR SOME OF THE YEARS UNDER APPEAL, WHICH HAVE BECOME FINAL, AS WELL AS R ELIANCE THEREON FOR OTHER YEARS, ALL THAT THE ASSESSEE WAS REQUIRED TO EXHIBIT IN THE SE T ASIDE (OR OTHERWISE) ASSESSMENT PROCEEDINGS WAS OF THE PUBLICATION BUSINESS AS BEIN G INCIDENTAL TO THE ATTAINMENT OF ITS OTHER OBJECTS, I.E., AS A FACT, TOWARD SATISFACTION OF THE REQUIREMENT OF THE LAW U/SS. 11(4) AND 11(4A), FOR THE SAID BUSINESS TO BE CONSIDERED AS PROPERTY HELD UNDER TRUST. THAT THE SAID BUSINESS DOES NOT BY ITSELF CONSTITUTE A CHARI TABLE OBJECT OR PURPOSE IS NO LONGER RES INTEGRA IN VIEW OF THE FINDINGS BY THE TRIBUNAL IN ITS OWN CASE AS WELL AS THE LAW AS EXPLAINED IN IDEAL PUBLICATIONS TRUST (SUPRA). THE SAME, IN FACT, IS THE ADMITTED POSITIO N; 14 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) THE ASSESSEE NOT PRESSING ITS GROUND CHALLENGING TH E COMPUTATION OF INCOME OF THE SAID BUSINESS UNDER CHAPTER IV-D; RATHER, HAVING CLAIMED AND BEEN ALLOWED DEPRECIATION U/S.32 AND SET OFF U/S.71. THE QUESTION OF THE SAID BUSINESS BEING INCIDENTAL TO THE OTHER OBJECTIVE/S OF THE ASSESSEE, AS WOULD BE EVIDENT, I S A PURE MATTER OF FACT . WE FIND NO BASIS, NOR ANY MATERIAL ON RECORD, TO JUSTIFY THE SAME, WH ICH ALSO FORMS THE BASIS OF THE ORDERS BY THE REVENUE. ITS FINDINGS FOR AYS 1992-93, 1995 -96 & 1996-97, WHICH MAY ALSO HAVE ATTAINED FINALITY, ARE ALSO VERY RELEVANT, THO UGH HAVE NOT BEEN BROUGHT ON RECORD. AN ELOCUTION CONTEST, EVEN THE SUBJECT OF WHICH IS NOT KNOWN, AS ALSO THE TOTAL EXPENDITURE INVOLVED, APPEARS TO BE THE ONLY ACTIVITY SPONSORED BY THE TRUST OVER THE YEARS, WHICH AGAIN DOES NOT IMPLY UNDERTAKING ANY ACTIVITY PER SE . THAT IS, THERE IS NO CHARITABLE ACTIVITY BEING UNDERTAKEN, MUCH LESS A REGULAR ACTI VITY TOWARD CHARITABLE PURPOSES, FOR THE SAID BUSINESS TO BE CONSIDERED AS AN ADJUNCT OR INC IDENTAL TO THE ATTAINMENT THEREOF OR ANY SPECIFIC OBJECTIVE. RATHER, IF AT ALL, THE CLAIM OF BUSINESS EXPENSES AS OR TOWARD APPLICATION OF INCOME WOULD SUGGEST NON-MAINTENANCE OF SEPARATE BOOKS OF ACCOUNT, ANOTHER QUALIFYING CONDITION U/SS. 11(4) & 11(4A). HERE IT IS ALSO PERTINENT TO STATE THAT EVEN IF THE ASSESSEES UNDERTAKING OF PUBLISHING BU SINESS WAS FOUND AS MEETING THE REQUIREMENT OF LAW AND, AS SUCH, A PROPERTY HELD UN DER THE TRUST, ONLY ITS INCOME TO THE EXTENT APPLIED FOR ITS CHARITABLE PURPOSES WOULD QU ALIFY FOR EXEMPTION U/S.11, WHICH AGAIN IS CONSPICUOUS BY ITS ABSENCE. IN SUM, THE ASSESSEE S CASE IS WHOLLY UN-MAINTAINABLE. AS REGARDS THE ASSESSEES PLEA FOR A COMPOSITE AND HOLISTIC VIEW OF THE MATTER BEING TAKEN; THE BUSINESS ACTIVITY NOT GENERATING A NY SURPLUS, WE FIND THE SAME AS SELF- DEFEATING AND, THUS, A CONTENTION WHICH ONLY NEEDS TO BE STATED TO BE REJECTED. IF THERE IS NO SURPLUS, THERE IS NO QUESTION OF THE BUSINESS FE EDING OR AS BEING ABLE TO SUSTAIN ANY CHARITABLE ACTIVITY. THE PLEA OF NO SURPLUS IS ALSO INCONSISTENT WITH THE RECORD. THE ASSESSEE ACQUIRES LAND AT A COST OF RS.2.95 CRORES DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 1999-2000 (REFER GD.3/SOF FOR AY 1998-99). AGA IN, THE SAME WOULD ONLY BE A PART OF THE PROJECT, WHICH IS ALSO APPARENT FROM THE FAC T THAT HUGE CLAIMS QUA DEPRECIATION ON, AMONG OTHERS, BUILDING, HAVE BEEN MADE AND ALLOWED FROM YEAR TO YEAR, INDICATING CONTINUING EXPANSION. SURELY, THE ASSESSEE DOES NOT REQUIRE THAT MUCH CAPITAL TO 15 ITA NOS.1879/M/12, 5179/M/10, 7477/M/11, 8490/M/10 & 1880/M/12 PRABODHAN PRAKASHAN VS. ITO(E) COMMENCE CHARITABLE OBJECTS! AND, IF IT DOES, THEN AGAIN IT IS FOR IT TO GENERATE ADEQUATE CORPUS TO BE ABLE TO COMMENCE THE SAME. CERTAINLY, THERE WOULD BE NO SURPLUS FROM THE BUSINESS AS THE PROFITS GENERATED WOULD BE REQUIRED TO MEET THE FUNDING REQUIREMENTS OF ITS CAPITAL EXPENDITURE AS WELL AS CONCOMITANT FINA NCIAL OBLIGATIONS, INCLUDING SERVICING OF DEBT. THE FOCUS OF THE MANAGEMENT IS CLEAR, I.E., T O SET UP A LARGE, IF NOT A GRANDIOSE PUBLISHING HOUSE. NO WONDER THE ASSESSEE HAS NOT BE EN ABLE TO GENERATE A SURPLUS (FOR CHARITABLE PURPOSES) IN THE TWO DECADES OF ITS FUNC TIONING, AND DESPITE BEING RUN ON COMMERCIAL LINES. THE PLEA OF NO SURPLUS, WHICH IS EVEN OTHERWISE NOT MAINTAINABLE, IS FALSE . THE GROUNDS AS ADOPTED ARE UNDER THE FACTS AND CIRC UMSTANCES OF THE CASE NOT MAINTAINABLE AT THE THRESHOLD AND, IN ANY CASE, FAI L ON MERITS. WE DECIDE ACCORDINGLY. 7. IN THE RESULT, THE ASSESSEES APPEALS FOR ALL TH E YEARS ARE DISMISSED. 5 16 ' (51 0 5 0 1 78 ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 21, 20 13 SD/- SD/- (VIJAY PAL RAO) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; 9' DATED : 21.08.2013 !.'. ./ ROSHANI , SR. PS 4 0 -1' :')1 4 0 -1' :')1 4 0 -1' :')1 4 0 -1' :')1/ COPY OF THE ORDER FORWARDED TO : 1. *, / THE APPELLANT 2. -.*, / THE RESPONDENT 3. ; ( ) / THE CIT(A) 4. ; / CIT CONCERNED 5. '!>? - 1' , , / DR, ITAT, MUMBAI 6. ?@( A / GUARD FILE 4' 4' 4' 4' / BY ORDER, B BB B/ // / 7 7 7 7 (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI