DDIT (E) 1(1), MUMBAI V. SRI SRI RADHA DAMODAR CHARTIBALE TRUST, MUMBAI

ITA 2461/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2231 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2016
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2014
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Keywords: Charitable institution
• Section: 147; 148; 11

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER I.T.A. NO.2461/M/2014 (AY: 2006 - 2007 ) ITO - (E)2(3), R.NO.513, PIRAMAL CHAMBERS, LAL BAUG, PAREL, MUMBAI 400 049. / VS. M/S. SRI SRI RADHA DAMODAR CHARITABLE TRUST, HARE KRISHNA LAND, JUHU, MUMBAI 400 049. ./ PAN : AAFTS 2570 L ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MANJUNATHA SWAMY, CIT - DR / RESPONDENT BY : SHRI NISHANT THAKKAR AND MS. JASMIN AMALSADVALA / DATE OF HEARING : 03.11.2016 / DATE OF PRONOUNCEMENT : 03 .11.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 11.4.2014 IS AGAINST THE ORDER OF THE CIT (A) - 1, MUMBAI DATED 18.2.2014 FOR THE ASSESSMENT YEAR 2006 - 07. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DIRECTING THE AO TO ALLOW THE EXEMPTION U/S 11 OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS RUNNING COMMERCIAL OR BUSINESS ACTIVITY VIZ A RESTAURANT, WH ICH IS GENERATING HUGE PROFIT, IS OPEN TO OUTSIDERS, NOT ENGAGED IN DISTRIBUTION OF FOOD TO POOR AND NEEDY PEOPLE AS CONTEMPLATED IN ITS CHARITABLE OBJECTS, AND CAN NO WAY BE CONSTRUED AS A CHARITABLE ACTIVITY, IGNORING THE DETAILED FINDINGS ON FACTS BY TH E AO. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DIRECTING THE AO TO ALLOW THE EXEMPTION U/S 11 OF THE ACT WHEN THE ONLY CHARITABLE WORK CARRIED OUT BY THE ASSESSEE IS RUNNING A VEGETARIAN RESTAURANT A ND EARNING HUGE PROFIT YEAR AFTER YEAR AND SHOWING THE EXPENSES OF RUNNING RESTAURANT AS EXPENSES ON THE OBJECT OF THE TRUST. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BRIEFLY NARRATED THE FACTS OF THE CASE AND MENTIONED THAT IN THIS CASE THE ASSESSM ENT WAS COMPLETED U/S 148 R.W.S 147 OF THE ACT, WHEREIN THE AO DENIED THE EXEMPTION U/S 11 OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE RUNNING OF COMMERCIAL BUSINESS ACTIVITY, A RESTAURANT, AS PART OF SPREADING THE VEGETARIANISM IS THE OBJECT OF THE ASSESSEE - TRUST. MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY AND THE CIT (A) GRANTED RELIEF RELYING ON HIS 2 ORDER FOR THE AY 2008 - 09, DETAILS OF WHICH ARE GIVEN IN PARAS 4.2 AND 4.3 OF HIS ORDER. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE READ OUT TH E LAST LINES OF THE SAID PARA 4.3 ON PAGE 9 OF THE CIT (A)S ORDER AND HIGHLIGHTED THE FOLLOWING: - 4.3........CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE DECISION OF MY PREDECESSOR ON THE SIMILAR ISSUE AND FOR THE REASONS THEREIN, THE GROUNDS ...... ARE ALLOWED. 3. REFERRING TO THE FACT OF THE ORDER OF THE CIT (A) FOR THE AY 2008 - 2009, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TRIBUNAL GRANTED RELIEF TO THE ASSESSEE IN ASSESSEES OWN CASE VIDE ITS ORDER DATED 18.7.2012 IN ITA NO. 5773/M/2011 REPORTED IN [2012] 24 TAXMANN.COM 141 (MUM.) WHICH IS RELEVANT FOR THE PROPOSITION THAT WHERE THE ASSESSEE IS A CHARITABLE TRUST ENGAGED IN PROMOTION OF VEGETARIANISM CARRIED ON BUSINESS OF PREPARING THE VE GETARIAN FOOD ITEMS AND SELLING THE SAME, IT IS THE ENTITLED TO CLAIM EXEMPTION U/S 11 OF THE ACT. 4. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE TRIBUNAL (SUPRA), WE FIND, THE DECISION TAKEN BY THE CI T (A) ON THE ISSUE OF CLAIM OF EXEMPTION U/S 11 OF THE ACT IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE FOR THE AY 2006 - 07 HAVE TO BE DISMISSED IN THE LINE OF THE ORDER FO THE TRIBUNAL FOR THE AY 2008 - 09 (SUPRA), WHICH IS HEAVILY RELIED ON BY THE CIT (A) WHILE GRANTING RELIEF TO THE ASSESSEE. WE ORDER ACCORDINGLY. THUS, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN T HE OPEN COURT ON 0 3 R D NOVEMBER, 2016. S D / - S D / - ( RAM LAL NEGI ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 03.11.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 3 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI