ASST DIT (E) 1(1), MUMBAI V. MATOSHRI ARTS AND SPORTS TRUST, MUMBAI

ITA 2459/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3019 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K GOPTAL
• Keywords: Business income; Charitable institution
• Section: 11A; 80G; 12A; 12; 11

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3114/MUM/2012 ASSESSMENT YEAR 2008-09 ADIT(E)-I(1), R. NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI-400012 / VS. MATOSHRI ARTS & SPORTS TRUST MATOSHRI MEENATAI THAKERAY GROUND, JOGESHWARI, VIKHROLI LINK ROAD, ANDHERI(E), MUMBAI-400093 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AAATM2559G ITA NO.2459 & 2460/MUM/2014 ASSESSMENT YEARS 2006-07 & 2009-10 ADIT(E)-I(1), R. NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI-400012 / VS. MATOSHRI ARTS & SPORTS TRUST MATOSHRI MEENATAI THAKERAY GROUND, JOGESHWARI, VIKHROLI LINK ROAD, ANDHERI(E), MUMBAI-400093 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO.AAATM2559G / REVENUE BY SHRI VIJAY KUMAR SONI-DR !'# $ / ASSESSEE BY SHRI K.GOPTAL % & $ ' / DATE OF HEARING : 26/10/2015 & $ ' / DATE OF ORDER: 26/10/2015 MATOSHRI ARTS & SPORTS TRUST ITA NO.3114/MUM/2012 & ITA NO. 2459 AND 2460/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) ALL THESE THREE APPEALS ARE BY THE REVENUE FOR ASSESSMENT YEAR 2006-07, 2008-09 AND 2009-10, AGGRI EVED BY THE IMPUGNED ORDER DATED 28/01/2014 (A.Y. 2006-0 7) , 14/03/2012 (A.Y. 2008-09) AND 28/01/2014(A.Y. 2009- 10) RESPECTIVELY OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. THE ONLY GROUND RAISED IN THIS APPEALS PERTAINS TO ALLO WING EXEMPTION U/S 11OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) WITHOUT APPRECIATING THE FACT THAT THE ASS ESSEE IS NOT MAINTAINING SEPARATE BOOKS OF ACCOUNTS AS REQUIRED UNDER PROVISION OF SECTION 11(4A) OF THE ACT. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI RANDHIR GUPTA, ADVANCED ARGUMENTS, WHICH ARE IDENTI CAL TO THE GROUND RAISED BY CONTENDING THAT THE ASSESSEE I S NOT MAINTAINING THE SEPARATE BOOKS OF ACCOUNTS AND THE ASSESSEE HAS VIOLATED TERMS AND CONDITIONS OF TRUST DEED, TH US, NOT ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. 2.1. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE, SHRI K. GOPAL, DEFENDED THE CONCLUSION ARRIVED AT I N THE IMPUGNED ORDER BY FURTHER SUBMITTING THAT THE IMPUG NED ISSUE ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL FOR A.Y. 2007-08 (ITA NO.8161/MUM/2010 ) ORDER DATED 19/10/2015. THIS FACTUAL MATRIX WAS ALS O CONSENTED TO BE CORRECT BY THE LD. DR. MATOSHRI ARTS & SPORTS TRUST ITA NO.3114/MUM/2012 & ITA NO. 2459 AND 2460/MUM/2014 3 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE AFORESAID ORDER DATED 19/10/2015 FOR READY REFERENCE:- THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 23/07/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO GRANT ING EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS NOT MAIN TAINING SEPARATE BOOKS OF ACCOUNTS AS REQUIRED UNDER PROVIS ION OF SECTION 11(4A) OF THE ACT. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI VIJAY KUMAR SONI, ADVANCED ARGUMENTS, WHICH ARE IDENTICAL TO THE GROUND RAISED BY CONTENDING THAT THE ASSESSEE IS NO T MAINTAINING THE SEPARATE BOOKS OF ACCOUNTS AND THE ASSESSEE HAS VIOLATED TERMS AND CONDITIONS OF TRUST DEED, THUS, NOT ELIGI BLE FOR EXEMPTION U/S 11 OF THE ACT. 2.1. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE, SHRI K. GOPAL, DEFENDED THE CONCLUSION ARRIVED AT I N THE IMPUGNED ORDER. THE ASSESSEE HAS ALSO FILED PAPER BOOK RUNNI NG INTO 54 PAGES, WHICH IS KEPT ON RECORD. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A CHARITABLE TRUST, REGISTERED WITH THE CHARITY COMMISSIONER AND ALSO WITH THE DEPARTMENT U/S 12A O F THE INCOME TAX ACT. IT IS NOTED THAT RIGHT FROM THE DAT E OF INCEPTION MATOSHRI ARTS & SPORTS TRUST ITA NO.3114/MUM/2012 & ITA NO. 2459 AND 2460/MUM/2014 4 ITSELF, THE ASSESSEE TRUST HAD BEEN ASSESSED ACCORD INGLY UP TO A.Y. 2006-07. THE MAIN ACTIVITY OF THE ASSESSEE TRUST AR E FOR THE DEVELOPMENT OF ARTS & SPORTS AND IS STILL CONTINUIN G. THE ASSESSEE CONSTRUCTED A CLUB ON THE LAND PROVIDED BY BMC IN T ERMS OF THE AGREEMENT. THE OWNERSHIP OF THE LAND WAS WITH THE B MC AND THE STRUCTURE CONSTRUCTED THEREUPON WAS TO BE HANDED O VER TO THE BMC AS PER TERMS OF THE AGREEMENT BUT THE ASSESSEE WAS TO CARRY ON AND CONTINUE THE SUPPORTS ACTIVITIES ON THE LAND /PROPERTY AS PER THE TRUST DEED. AT THE RELEVANT TIME, THE ASSE SSEE DECLARED LOSS OF RS.46,22,140/-. THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESSEE TRUST AT RS.13,07,205/-, DISALLOWING T HE STATUS OF THE ASSESSEE AS A TRUST AND TREATED THE SAME AS AOP BRO ADLY ON THE BASIS THAT THE PROPERTY WHICH IS IN DISPUTE WITH TH E BMC AUTHORITIES, THE ASSESSEE IS DOING BUSINESS ACTIVIT IES. WHILE COMING TO THIS CONCLUSION, THE ASSESSING OFFICER RELIED UP ON THE DECISION IN THE CASE OF SIND COOPERATIVE HOUSING SOCIETY VS ITO . THE STAND OF THE ASSESSEE IS THAT WHILE DECIDING THE ISSUE, THE LD. ASSESSING OFFICER COMPLETELY IGNORED THE DECISION FROM HONBL E APEX COURT IN THANTHI TRUST 247 ITR 785. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD , ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXT APOSITION AND ANALYZED, THERE IS NO DISPUTE TO THE FACT THAT SPOR TS ACTIVITIES ARE CARRIED OUT BY THE ASSESSEE AND EVEN CERTIFICATE U/ S 80G WAS GRANTED TO THE ASSESSEE BY THE DEPARTMENT. THE ASSE SSEE RECEIVED DONATIONS FROM DIFFERENT DONORS, WHO CONFIRMED OF M AKING THE DONATIONS. THE MAIN GRIEVANCE OF THE ASSESSING OFFI CER IS THAT IN VIEW OF SECTION 11(4A) OF THE ACT, THE ASSESSEE TR UST IS NOT MAINTAINING SEPARATE BOOKS OF ACCOUNTS OF ITS ACTIV ITIES, THEREFORE, MATOSHRI ARTS & SPORTS TRUST ITA NO.3114/MUM/2012 & ITA NO. 2459 AND 2460/MUM/2014 5 HE TERMED THE ASSESSEE TRUST AS AOP AND ASSESSED TH E INCOME AS BUSINESS INCOME, RESULTANTLY, DENIED EXEMPTION U/S 11 OF THE ACT. THERE IS NO DISPUTE THAT RIGHT FROM INCEPTION, THE ASSESSEE TRUST WAS GRANTED EXEMPTION U/S 11 OF THE ACT BY THE TAX AUTHORITIES. EVEN, IF, THE PROPERTY IS UNDER DISPUTE WITH THE BM C AUTHORITIES, CANNOT BE THE SOLE BASES FOR DENYING EXEMPTION TO T HE ASSESSEE. SO FAR AS, NON-MAINTENANCE OF SEPARATE BOOKS OF ACCOUN TS FOR DIFFERENT SPORTS IS CONCERNED, WE ARE IN AGREEMENT WITH THE FINDING OF THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) THAT DIFFERENT SPORTS ARE SINGLE ACTIVITY OF SPORTS, THE REFORE, CANNOT BE TREATED AS DIFFERENT ACTIVITIES OF THE TRUST. THIS VIEW FIND SUPPORT FROM THE RATIO LAID DOWN FROM HONBLE APEX COURT IN THANTHI TRUST 247 ITR 785 (SC). THERE IS FURTHER UNCONTROVE RTED FINDING IN THE IMPUGNED ORDER THAT THE ASSESSEE TRUST IS NO T RUNNING RESTAURANT, BAR, ETC, THUS, THERE IS NO QUESTION OF MAINTAINING SEPARATE REGISTERS. THE ACTIVITIES OF THE ASSESSEE TRUST ARE FOR THE ATTAINMENT OF OBJECTS OF THE TRUST ENSHRINED IN THE TRUST DEED. THUS, THE ASSESSEE IS HAVING A VALID REGISTRATION U /S 12A OF THE ACT, GRANTED BY THE DIRECTOR OF INCOME TAX (EXEMPTI ON) AND THE ASSESSING OFFICER HAS NOT SPECIFICALLY POINTED OUT ANY VIOLATION OF THE TRUST DEED AS WELL AS THE PROVISION OF SECTION 12 & 13, THEREFORE, WE FIND NO INFIRMITY IN THE CONCLUSION D RAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, AND THE CONCLUSION DRAWN IN THE AFORESAID ORDER OF THE TRIBUNAL DATED 19/10/2015, ASSERTIONS MADE BY THE L D. MATOSHRI ARTS & SPORTS TRUST ITA NO.3114/MUM/2012 & ITA NO. 2459 AND 2460/MUM/2014 6 RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND AN ALYZED, WE NOTE THAT THE FACTS AND THE ISSUE ARE UNCONTROVERTE DLY IDENTICAL TO THE A.Y. 2007-08. NO CONTRARY DECISIO N WAS BROUGHT TO OUR NOTICE BY EITHER SIDE AND MORE SPECI FICALLY THE REVENUE. WE FURTHER NOTE THAT THE BENEFIT U/S 80G OF THE ACT WAS GRANTED BY THE DEPARTMENT TO THE ASSESSEE AND T HE ASSESSEE IS A REGISTERED WITH THE CHARITY COMMISSIO NER ALONG WITH THE BENEFIT OF SECTION 12A OF THE ACT TO THE A SSESSEE. THE ONLY GRIEVANCE OF THE DEPARTMENT IS THAT THE AS SESSEE TRUST IS NOT MAINTAINING SEPARATE BOOKS OF ACCOUNTS OF ITS ACTIVITIES, THEREFORE, HE TERMED THE ASSESSEE TRUST AS AOP AND ASSESSED THE INCOME AS BUSINESS INCOME, RESULTANTLY , DENIED EXEMPTION U/S 11A OF THE ACT. THE TRIBUNAL HAS ALRE ADY PLACED RELIANCE UPON THE DECISION FROM HONBLE APEX COURT AND THE RATIO LAID DOWN THEREIN IN THE CASE OF THAN THI TRUST (247 ITR 785)(SC). WE FIND NO INFIRMITY IN THE CON CLUSION DRAWN IN THE RESPECTIVE APPEAL BY THE LD. FIRST APP ELLATE AUTHORITY, THEREFORE, THE APPEALS OF THE REVENUE AR E HAVING NO MERIT, RESULTANTLY, DISMISSED. FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 26/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 26/10/2015 F{X~{T? P.S/. . . MATOSHRI ARTS & SPORTS TRUST ITA NO.3114/MUM/2012 & ITA NO. 2459 AND 2460/MUM/2014 7 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.