Sai Chhaya Educational & Welfare Society, Noida V. JCIT, Ghaziabad

ITA 3237/DEL/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4166 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 14-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 21-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHANDER DUBEY
• Keywords: Business income; Depreciation; Opportunity of being heard
• Section: 143(3); 142(1); 12AA; 10B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-II, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A.NO. 3237 /DEL/201 5 A.Y. 20 10 - 11 SAI CHHAYA EDUCATIONAL & WELFARE SOCIETY C/O RAMGYA SCHOOL, E-7, SECTOR-50, NOIDA, UTTAR PRADESH (PAN: AABAS2034G) VS. JOINT COMMISSIONER OF INCOME TAX, RANGE-2, GHAZIABAD UTTAR PRADESH (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. SANJAY GUPTA, CA DEPARTMENT BY : SH. UMESH CHANDER DUBE Y , SR. DR ORDER ORDER ORDER ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 02.3.2015 OF THE LD. CIT(A), MUZAFFARNAGAR PERTAINI NG TO ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING THE ADDITION OF RS. 38,44,571/- ON ACCOUNT OF INCOME FROM BUS AND SPORTS ACTIVITIES TREATING THE SAME AS BUSINESS INCOME. 2. THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE SC OPE OF TERM EDUCATION WHICH INCLUDES SPORTS ACTIVITIES AS INT EGRAL PART OF EDUCATION. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING T HE DISALLOWANCE OF RS. 4372195/- ON ACCOUNT OF DEPRECIATION CLAIMED ON FIXED ASSETS. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED ITS RETURN OF INCOME ON 13.10.2010 DECLARING NIL INCOME. THE CASE WAS PROCE SSED U/S. 143(1) OF THE I.T. ACT, 1961. THE CASE WAS SELECTED UNDER SCRUTINY AN D STATUTORY NOTICE U/S. 143(2) OF THE I.T. ACT DATED 15.9.2011 AND ON 19.4.2012 U/ S. 143(2) & 142(1) OF THE I.T. ACT ALONGWITH QUESTIONNAIRE WERE ISSUED TO THE ASS ESSEE. IN RESPONSE TO THESE NOTICES, ASSESSEE ATTENDED THE PROCEEDINGS FROM TIM E TO TIME AND FURNISHED NECESSARY DETAILS / EXPLANATION AS CALLED. THE BOO KS OF ACCOUNTS PRODUCED, HAVE BEEN TEST CHECKED AND THE CASE WAS DISCUSSED. THEREAFTER ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE I.T. ACT AT A TOTAL IN COME OF RS. 38,44,570/- BY THE AO VIDE HIS ORDER DATED 25.3.2013. 3. AGAINST THE ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO VIDE HIS IMPUGNED ORDER DATED 02.3.2 015 HAS DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE HEARING, LD. AR OF THE ASSESSEE DID N OT PRESS THE GROUND NO3. HOWEVER, WITH REGARD TO GROUND NO. 1 & 2, LD. AR O F THE ASSESSEE STATED THAT ASSESSEE HAS BEEN MAINTAINING THE SAME SYSTEM OF BO OKS OF ACCOUNTS IN THE PAST AND SUBSEQUENT ASSESSMENT YEAR ALSO AND NO SUCH OBS ERVATION / ADDITION HAS EVER BEEN MADE FOR ANY EARLIER AND SUBSEQUENT ASS ESSMENT YEARS. HE FURTHER STATED THAT ASSESSMENT FOR THE AY 2008-09 AND AY 20 09-10 AND AY 2012-13 HAS BEEN MADE U/S. 143(3) OF THE I.T. ACT. HE FURT HER STATED THAT THE SCOPE OF TERM EDUCATION INCLUDES SPORTS ACTIVITIES AS INTE GRAL PART OF EDUCATION. IN SUPPORT OF HIS CONTENTION, HE FILED A PAPER BOOK CO NTAINING PAGES 1 TO 40 CONTAINING COPY OF CERTIFICATE OF REGISTRATION U/S. 12AA OF THE ACT; COPY OF CERTIFICATE OF REGISTRATION U/S. 80G(5) OF THE ACT; COPY OF ITR ACKNOWLEDGMENT 3 AND COMPUTATION OF TOTAL INCOME FOR THE AY 2010-11 SUBMITTED ALONGWITH THE RETURN OF INCOME; COPY OF AUDIT REPORT IN FORM 10B OF AY 2010-11 SUBMITTED ALONGWITH THE RETURN OF INCOME; COPY OF CONSOLIDAT ED AUDITED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT WITH ANNEXURE AS ON 31.3.2 010 RELEVANT TO AY 2010-11 SUBMITTED ALONGWITH RETURN OF INCOME; COPY OF AUDIT ED BALANCE SHEET AS ON 31.3.2010 RELEVANT TO AY 2010-11 OF SOCIETY (SAI CH HAYA EDUCATIONAL AND WELFARE SOCIETY) SUBMITTED ALONGWITH RETURN OF INCO ME; COPY OF AUDITED BALANCE SHEET AND INCOME AND EXPENDITURE ACCOUNT WITH ANNEX URE AS ON 31.3.2010 RELEVANT TO AY 2010-11 OF SCHOOL (RAMAGYA SCHOOL) S UBMITTD ALONGWITH RETURN OF INCOME; COPY OF ASSESSMENT ORDERS U/S. 143(3) FOR A Y 2008-09; COPY OF AUDITED BALANCE SHEET AND INCOME & EXPENDITURE ACCO UNT WITH ANNEXURE AS ON 31.3.2008 RELEVANT TO AY 2008-09 AND COPY OF WRITTE N ARGUMENTS DATED 15.7.2014 SUBMITTED BEFORE CIT(A). IN VIEW OF THE A BOVE, LD. AR OF THE ASSESEE HAS STATED THAT ISSUE RAISED IN GROUND NO.1 & 2 MA Y BE DECIDED IN FAVOUR OF THE ASSESSEE AS NO SIMILAR ADDITION WAS EVER MADE IN EARLIER AND IN SUBSEQUENT YEARS BY THE DEPARTMENT. 6. ON OTHER HAND, LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT ORDER OF THE LD. CIT(A) IS A WELL REASONED AND THE SAME DOES NOT NEED ANY INTERFERENCE ON MY PART, THEREFORE, THE SA ME MAY BE UPHELD. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND PAPER BOOK FI LED BY THE ASSESSEES AR. AS THE GROUND NO. 3 WAS NOT PRESSED BY THE LD. AR OF T HE ASSESSEE, THE SAME IS DISMISSED AS NOT PRESSED. 4 7.1 WITH REGARD TO GROUND NO. 1 & 2 ARE CONCERNED, I FIND THAT AS PER AO THE ASSESSEE IS CHARGING SEPARATE FEE FROM THE STUDENTS FOR THE TRANSPORT/ SPORTS FACILITY AND ACCORDING TO THE AO THE INCOME OF THE ASSESSEE FROM RUNNING OF TRANSPORT / SPORTS ACTIVITY IS NOT A CHARITABLE ACT IVITY AND THEREFORE, TAXABLE. HOWEVER, THE LD. AR HAS STATED THAT ACTIVITY OF RU NNING THE TRANSPORT/ SPORTS IS AN INTEGRAL PART OF EDUCATION. I ALSO NOTE THAT IT WAS THE FURTHER CONTENTION OF THE LD. AR THAT THE SAME SYSTEM OF BOOKS OF ACCOUNTS IN THE PAST AND SUBSEQUENT YEARS AND NO SUCH OBSERVATIONS/ ADDITION HAS EVER BEEN MADE. I ALSO NOTE THAT LD. CIT(A) OBSERVED THAT ASSESSEE WAS REQUIRED TO M AINTAIN SEPARATE BOOKS OF ACCOUNT FOR HIS TRANSPORT BUSINESS WHICH HE HAS NOT DONE AND THEREFORE, THE AO WAS FULLY JUSTIFIED IN DENYING THE EXEMPTION U/S. 11(4A) OF THE ACT TO THE ASSESSEE. I FIND THAT THE CONTENTION OF THE ASSESS EE RELATING TO MAINTAINING THE SAME SYSTEM OF BOOKS OF ACCOUNTS IN THE PAST AND S UBSEQUENT YEARS ON WHICH NO SIMILAR ADDITION WAS MADE, WAS NOT CONSIDERED BY TH E LOWER AUTHORITIES WHILE DECIDING THE ISSUE IN DISPUTE. I ALSO NOTE THAT A SSESSEE HAS ALSO NOT FILED RELEVANT DOCUMENTS BEFORE ME OF THIS CLAIM ALSO. T HEREFORE, IN THE INTEREST OF JUSTICE, I REMIT BACK THE ISSUE RAISED IN GROUND NO . 1 & 2 TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESEE IS ALSO DIRECTED TO PRODUCE ALL THE 5 RELEVANT DOCUMENTS/ INFORMATION RELATING TO HIS AFO RESAID CLAIM BEFORE THE AO AND FULLY COOPERATE WITH HIM. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2016. SD/- [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 14/10/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES