The ACIT, Central Circle-1(3), Ahmedabad V. Ahmedabad South Indian Association Charitable Trust, Ahmedabad

ITA 261/AHD/2004

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9145 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-08-2009
• Assessment Year: 1999-2000
• Appeal Filed On: 30-01-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PF JAIN
• Keywords: Charitable institution; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING :31/08/09 DRAFTED ON: 02/09/09 ITA NO.261AHD/2004 ASSESSMENT YEAR : 1999-2000 THE ACIT CENT.CIR-1(3) AHMEDABAD VS. AHMEDABAD SOUTH INDIAN ASSOCIATION CHARITABLE TRUST I-A, SUNRISE PARK OPP.DRIVE-IN-ROAD THALTEJ, AHMEDABAD PAN/GIR NO. : AAATA 2642 I (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI MAHESH KUMAR, SR.DR RESPONDENT BY: SHRI P.F. JAIN, AR O R D E R PER D.C.AGRAWAL , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-I, AHMEDABAD DATED 17/1 1/2003 PASSED FOR ASSESSMENT YEAR 1999-2000 BY RAISING FOL LOWING GROUNDS:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTIN G TO EXCLUDE THE SUM OF RS.48,04,355/- APPEARING IN THE INCOME AND EXPENDITURE ACCOUNT BEING RECEIPT FROM ADVERTISEMENT IN SOUVENIR, PROGRAMME SPONSORSHIP FROM THE TOTAL INCOME ASSESSED. ITA NO.261/AH D/2004 ACIT VS. AHMEDABAD SOUTH INDIAN ASSN CHARI.TRUST ASST.YEAR -1999-2000 - 2 - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. 2. THE ISSUE INVOLVED IN THE PRESENT APPEAL IS W HETHER THE MONEY RECEIVED BY THE ASSESSEE FROM ADVERTISEMENT I N SOUVENIR IS ON ACCOUNT OF CORPUS OF THE TRUST OR IT IS REVENUE RECEIPT OUT OF WHICH 85% IS REQUIRED TO BE APPLIED FOR CHARITABLE PURPOSES. THE ASSESSING OFFICER HAS TR EATED IT AS REVENUE RECEIPT AND INCLUDED IT FOR THE PURPOSE OF FINDING OUT WHETHER IT WAS APPLIED FOR CHARITABLE PURPOSES OR N OT. 3. THE LEARNED CIT(APPEALS) DELETED THE ADDITION AN D TREATED THE RECEIPT AS FOR CORPUS OF THE TRUST BY FOLLOWING THE DECISIONS OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. TRUSTEES OF VISHA NIMA CHARITY TRUST (138 ITR 564) AND OF CIT VS. S.V. VANIK JAIN SANGH (260 ITR 367). 4. WE HAVE HEARD THE LD.DR AND THE LEARNED AUTHORIS ED REPRESENTATIVE OF THE ASSESSEE. LOOKING TO THE FA CTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ISSUE I S SQUARELY ITA NO.261/AH D/2004 ACIT VS. AHMEDABAD SOUTH INDIAN ASSN CHARI.TRUST ASST.YEAR -1999-2000 - 3 - COVERED BY THE DECISION OF ITAT AHMEDABAD BENCH A IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2001-02 TO 2004-05 (BY WAY OF ITA NOS.2331/AHD/2004, ITA NO.84/AHD/200 6 & CO NO.35/AHD/2006 AND OTHERS) DATED 24/07/2009, WHEREI N THE TRIBUNAL HAS HELD AS UNDER:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW, THERE I S NO CASE FOR INTERFERENCE IN THE ORDER OF THE LEARNED CIT(A) IN THIS REGARD. NOT ONLY THE ISSUE IS COVERED BY THE DECISION OF HON'BL E BOMBAY AND GUJARAT HIGH COURTS IN THE CASE OF CIT V. V. TRUSTE ES OF VISHA NIMA CHARITY TRUST (138 ITR 564) AND CIT V. S.V.VAN IK JAIN SANGH (260 ITR 367) RESPECTIVELY, ON REASONING ALSO, NO C ASE IS MADE OUT IN FAVOUR OF THE REVENUE. FIRSTLY, BECAUSE, THE A SSESSEE IS ONLY RUNNING EDUCATIONAL INSTITUTION AND IT IS NOT A PL ACE OR INSTITUTION FOR PUBLICITY/ADVERTISEMENT. PRINTING SOUVENIR IS ONLY AN ACTIVITY INCIDENTAL TO THE ANNUAL PROGRAMME OF THE INSTITUTI ON AND CONTRIBUTORS DO NOT PLACE ADVERTISEMENT IN THE SOUV ENIR OF THE TRUST WITH THE INTENTION OF GETTING ANY PUBLICITY FOR TH EM OR FOR THEIR PRODUCTS FOR ENHANCING THE MARKET VALUE BUT THE CON TRIBUTIONS ARE MADE ONLY FOR THE PURPOSE OF HELPING THE INSTITUTI ON. NO CASE IS MADE OUT BY THE REVENUE TO SHOW THAT THE .CONTRIBUT ORS/PARTIES PLACING ADVERTISEMENT HAVE DERIVED ANY BENEFIT FROM SUCH ADVERTISEMENT PUBLISHED IN THE SOUVENIR OF THE TRUS T. THE CIRCULATION OF THE SOUVENIR DID NOT REACH TO PUBLIC AT LARGE, THE FREQUENCY/PERIODICITY DO NOT REFLECT THAT ADVERTI SEMENT IN THE ITA NO.261/AH D/2004 ACIT VS. AHMEDABAD SOUTH INDIAN ASSN CHARI.TRUST ASST.YEAR -1999-2000 - 4 - SOUVENIR WOULD HELP THE ADVERTISERS IN INCREASING THE MARKETABILITY OF THEIR PRODUCTS. THEREFORE, RECEIPTS FROM THE ADV ERTISEMENT CANNOT BE TAKEN AS REVENUE RECEIPT IN THE HANDS OF THE ASS ESSEE. IN FACT THE ASSESSEE TRUST IS NOT RENDERING ANY SERVICES BY WAY OF PLACING ADVERTISEMENT IN THEIR SOUVENIR FOR WHICH IT COULD HAVE RECEIVED MONEY BEING IN THE NATURE OF REVENUE RECEIPT. THE N ATURE AND SCOPE OF RECEIPT AMPLY SUGGESTS THAT IT IS A CAPITA L RECEIPT. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE BOMBAY H IGH COURT IN CIT VS. TRUSTEES OF VISHA NIMA CHARITY TRUST (13 8 ITR 564),WHEREIN IT IS HELD - ''THAT THE ASSESSEE-TRUST WAS FORMED PRIMARILY BY T HE MEMBERS OF A PARTICULAR CASTE, ALTHOUGH THE OBJECTS THEREOF WERE OBJECTS OF GENERAL PUBLIC CHARITY. THE APPEAL ISSUED BY THE TRUSTEES MADE IT CLEAR THAT THE OBJECT OF THE TRUST WAS TO H AVE A PERMANENT HOME FOR PROVIDING SHELTER TO THOSE WHO C AME TO BOMBAY FOR A SHORT DURATION. THE MEMBERS OF THE PUB LIC TO WHOM THE APPEAL WAS ADDRESSED CAME FROM COMPARATIVE LY PROSPEROUS RURAL AREAS AND WHO LIKED TO STRENGTHEN THE RELATIONS ALREADY EXISTING AMONGST THE MEMBERS OF T HE CASTE AND AT THE SAME TIME HELP A NOBLE CAUSE. IN THE APP EAL, THERE WAS NO REFERENCE TO THE ADVERTISEMENTS IN THE SOUVE NIR BEING LIKELY TO CONTRIBUTE TO THE ADVANCEMENT OF THE BUSI NESS OF THE PERSONS FROM WHOM THE ADVERTISEMENTS WERE SOUGHT. I T WAS UNLIKELY ON THE FACTS OF THE CASE THAT THE PERSONS TO WHOM THE APPEAL FAR, TICKETS AND ADVERTISEMENTS WAS ISSUED W OULD HAVE GIVEN AN ADVERTISEMENT IN THE SOUVENIR OR PURCHASED TICKETS FOR THE CHARITY SHOW FOR ANY PURPOSE OTHER THAN THE CHA RITY, AND AS A VOLUNTARY CONTRIBUTION. THEREFORE, THE CONTRIBUTI ONS MADE BY WAY OF TICKETS AND FOR ADVERTISEMENTS WERE, ON THE FACTS OF THE CASE, MERELY VOLUNTARY CONTRIBUTIONS AND WERE EXEM PT UNDER SUB-S. (I) OF S. 12, EVEN ASSUMING THAT THE RECEIP TS CONSTITUTED THE INCOME OF THE ASSESSEE AND NOT THE CORPUS THERE OF. FURTHER, THE CONTRIBUTIONS COULD NOT BE REGARDED AS INCOME D ERIVED BY THE ASSESSEE-TRUST FROM PROPERTY HELD UNDER TRUST A S CONTEMPLATED UNDER S. 11. ITA NO.261/AH D/2004 ACIT VS. AHMEDABAD SOUTH INDIAN ASSN CHARI.TRUST ASST.YEAR -1999-2000 - 5 - IN VIEW OF THE ABOVE, WE CONFIRM THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND DISMISS GROUND RAISED BY THE REVENUE IN THIS REGARD FOR ALL THE AYS UNDER CONSIDERATION. 5. FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, W E DISMISS THE APPEAL OF THE REVENUE. 6. THE OTHER GROUNDS ARE GENERAL IN NATURE WHICH RE QUIRE NO INDEPENDENT ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 04/09/2009. SD/- SD/- ( MAHAVIR SINGH ) ( D.C.AGRAWAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 04/09/2009 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT 3. THE CIT CONCERNED. 4. THE LD. CIT(APPEALS)-I, AHMEDABAD 5. THE DR, AHMEDABAD BENCH.6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD