The Southern India Chamber of Commerce & Industry, CHENNAI V. DDIT (Exemption-II), CHENNAI

ITA 2767/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9264 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D ROHINI
• Keywords: Charitable institution; Bad and doubtful debts
• Section: 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , ! , ' # BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBE R ! ./ ITA NOS.2766 & 2767/CHNY/2018 $ /ASSESSMENT YEARS: 2011-12 & 2012-2013 THE SOUTHERN INDIA CHAMBER OF COMMERCE & INDUSTRY, NO.6, INDIAN CHAMBER BUILDING ESPLANADE ROAD, CHENNAI - 600 108. VS. DY. DIRECTOR OF INCOME TAX (EXEMPTION-II), CHENNAI. [PAN: AAAAT 2550R] ( % /APPELLANT) ( &'% /RESPONDENT) % ( ) / APPELLANT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE &'% ( ) /RESPONDENT BY : MS. D. ROHINI, JCIT * ( +' /DATE OF HEARING : 18.06.2019 ,-$ ( +' / DATE OF PRONOUNCEMENT : 20.06.2019 . / O R D E R PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THESE APPEALS AGAINST THE CONSOL IDATED ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-17, CHE NNAI, IN ITA NO.1283/2013-14 & 152/2015-16/CIT(A)-17 DATED 03.07 .2018 FOR THE ASSESSMENT YEARS (AYS) 2011-12 & 2012-13, RESPECTIV ELY. 2. M/S. THE SOUTHERN INDIA CHAMBER OF COMMERCE & IN DUSTRY, THE ASSESSEE, IS A PUBLIC CHARITABLE TRUST REGISTERED U /S. 12AA OF THE INCOME ITA NOS.2766 & 2767/CHNY/2018 :- 2 -: TAX ACT, 1961 (IN SHORT THE ACT) AND IT ISSUES CE RTIFICATES OF ORIGIN FOR THOSE EXPORTERS FROM INDIA FOR WHICH THE ASSESSEE C HARGING CERTAIN FEES AND IT ALSO ISSUES SUCH CERTIFICATES TO NON-MEMBERS OF THE TRUST ALSO. WHILE MAKING THE ASSESSMENT FOR AY 2011-12, THE ASS ESSING OFFICER (AO) FOUND, INTER ALIA, THAT IT INCURRED AN EXPENDI TURE OF RS. 7,14,580/- FOR CONDUCTING GOLF TOURNAMENT AGAINST WHICH IT COLLECT ED RS. 2,89,000/- AS SPONSORSHIP AND THE BALANCE OF RS. 4,25,580/- WAS C LAIMED BY THE ASSESSEE TRUST. THE AO AFTER DUE EXAMINATION REJEC TED THE CLAIM STATING THAT THE EXPENDITURE WAS NOTHING TO DO WITH THE OBJ ECT OF THE TRUST AND HENCE, ADDED TO THE INCOME. WHILE MAKING ASSESSMEN T FOR AY 2012-13, THE AO FOUND, INTER ALIA, THAT THE ASSESSEE DEBITED RS. 1,24,732/- AGAINST THE PROVISIONS FOR DOUBTFUL DEBTS AND SINCE, IT IS PROVISION AND IT IS NOT EXPENDED BY THE ASSESSEE, THE AO DISALLOWED THIS CL AIM AND COMPLETED THE ASSESSMENT. 3. AGGRIEVED AGAINST THOSE ISSUES, THE ASSESSEE FIL ED APPEALS BEFORE THE LD. CIT(A), THE LD. CIT(A) DISMISSED THE APPEAL S ON THESE ISSUES. AGAINST THOSE ORDERS, THE ASSESSEE FILED THESE APPE AL. 4. THE LD. AUTHORIZED REPRESENTATIVE OF ASSESSEE SU BMITTED THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENSES INCURRED FOR CONDUCTING GOLF TOURNAMENT AND RS. 4,25,580/- FOR A Y 2011-12 AND RS. 1,24,732/- THE PROVISION FOR DOUBTFUL DEBTS FOR AY 2012-13 AND HENCE, THE ITA NOS.2766 & 2767/CHNY/2018 :- 3 -: ORDERS OF THE LD. CIT(A) AND THE AO BE QUASHED ON T HESE ISSUES. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT CONDUCTING GOLF TOURNAMENT IS NOT A CHARITABLE ACTIVITY AND IT HAD NOTHING TO DO WITH THE OBJECT OF THE ASSESSEE TRUST. THEREFORE, THE D ISALLOWANCE MADE BY THE AO SUSTAINED BY LD. CIT(A) IS IN ORDER FOR AY 2 011-12. THE PROVISION MADE FOR DOUBTFUL DEBTS IS A MERE PROVISION AND HEN CE, THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IN A Y 2012-13 IS IN ORDER. THEREFORE, THE LD. DR PLEADED THAT THE ORDE RS OF THE LOWER AUTHORITIES BE CONFIRMED. 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS CLEAR THAT THE ASSESSEE I S A REGISTERED CHARITABLE TRUST WHOSE MAIN ACTIVITIES ARE ISSUE OF CERTIFICAT E OF ORIGIN FOR THOSE EXPORTERS FROM INDIA BE IT MEMBERS OR NON-MEMBERS. THE GOLF TOURNAMENT CONDUCTED BY THE ASSESSEE CANNOT BE HELD AS A CHARITABLE ACTIVITY AND HENCE, RS. 4,25,580/- INCURRED BY THE ASSESSEE IN AY 2011- 12 IS NOT TOWARDS THE PURPOSES OF THE TRUST THEREFO RE, THE DISALLOWANCE MADE BY THE AO, SUSTAINED BY THE LD. CIT(A) IS IN O RDER AND HENCE, THE CORRESPONDING GROUNDS OF THE ASSESSEE FOR AY 2011-1 2 FAILS. IN ASSESSMENT YEAR 2012-13, THE ASSESSEE CLAIMED RS. 1 ,24,732/- THE PROVISION FOR DOUBTFUL DEBTS AS AN ALLOWANCE WHICH HAS BEEN RIGHTLY DISALLOWED BY THE AO AS THE CHARITABLE TRUST CANNOT CLAIM ON THE BASIS OF ITA NOS.2766 & 2767/CHNY/2018 :- 4 -: PROVISION BUT FOR ACTUAL EXPENDITURE. THEREFORE, TH E DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS IN ORD ER AND HENCE, THE CORRESPONDING GROUNDS OF THE ASSESSEE ALSO FAIL FOR AY 2012-13. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE, 2019 IN CHENNAI. SD/ - SD/ - ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( . ) (S. JAYARAMAN) ' / ACCOUNTANT MEMBER /CHENNAI, /! /DATED: 20 TH JUNE, 2019 . EDN, SR. P.S . ( &+01 21$+ /COPY TO: 1. % /APPELLANT 2. &'% /RESPONDENT 3. * 3+ ( )/CIT(A) 4. * 3+ /CIT 5. 1 45 &+ /DR 6. 56 7 /GF