Vaigarai Public Charitable and Educational Trust, Dindigul V. ITO, Dindigul

ITA 397/CHNY/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7832 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 24-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL IRS
• Assessee Lawyers: T VASUDEVAN
• Keywords: Charitable institution; Bad and doubtful debts
• Section: 12AA; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI . , BEFORE SHRI ABRAHAM P. GEORGE , ACCOUNTANT MEMBER ./I.T.A. NO. 397/MDS/2015 / ASSESSMENT YEAR : 2010-2011. VAIGARAI PUBLIC CHARITABLE AND EDUCATIONAL TRUST, BESCHI COLLEGE, KARUR ROAD, DINDIGUL 624 001. VS. THE INCOME TAX OFFICER, WARD I(1) DINDIGUL. [PAN AAATV1676P] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI. T. VASUDEVAN, ADVOCATE /RESPONDENT BY : SHRI. SUPRIYO PAL, IRS, JCIT. ! '# /DATE OF HEARING : 10-01-2017 $% '# /DATE OF PRONOUNCEMENT : 31-01-2017 / O R D E R IN THIS APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST AN ORDER DATED 22.12.2014 OF LD. COMMISSIONER OF INCOM E-TAX (APPEALS)- I, MADURAI, IT ASSAILS DENIAL OF EXEMPTION CLAIMED BY IT U/S.11 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. GROUNDS TAKEN BY THE ASSESSEE ARE REPRODUCED HEREU NDER:- ITA NO.397/MDS/2015 :- 2 -: 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEAL S) DISMISSING THE APPEAL IS CONTRARY TO LAW, ERRONEOUS AND UNSUSTAINABLE ON THE FACTS OF THE CASE. 2. THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE OFF ICER THAT THE ASSESSEE-TRUST IS NOT ENTITLED FOR THE CLAIM FOR EX EMPTION UNDER SEC.11 OF THE ACT. 3. THE CIT(A) FAILED TO APPRECIATE THAT THE ASSESSE'S ACTIVITY OF PRINTING, DISTRIBUTION AND SALE OF EDUCATIONAL BOOK S WAS WHOLLY CARRIED ON WITH A NON-PROFIT MOTIVE AND HENCE IS NO T ENGAGED IN THE CARRYING ON OF ANY ACTIVITY FOR PROFIT. 4. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THE AC TIVITY OF ASSESSEE WAS PURELY AN EDUCATIONAL ONE WITH A NON-P ROFIT MOTIVE AND THUS WAS A CHARITABLE ACTIVITY AS ENVISA GED IN SEC. 2(15) OF THE ACT. 5. . THE CIT(A) FURTHER FAILED TO APPRECIATE THAT CONF IRMING THE DENIAL OF EXEMPTION TO THE ASSESSEE WAS MERELY ON S URMISES AND CONJECTURES AND HENCE THE DENIAL OF EXEMPTION W AS NOT IN ACCORDANCE WITH LAW. 6. .. THE CIT(A) FAILED TO APPRECIATE THAT THE CONTRIB UTION PAID OF RS.16,40,626 TO VARIOUS INSTITUTIONS WERE FOR EDUCA TIONAL PURPOSES AND HENCE THE REJECTION OF THE SAME WAS WI THOUT ANY BASIS AND MATERIAL BY THE OFFICER AND HENCE CONFIRM ING THIS WAS UNSUSTAINABLE AND UNTENABLE ON THE FACTS OF THE CASE. 7. .. THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THE ASSESSEE HAVING FURNISHED THE DETAILS OF CONTRIBUTIONS MADE FOR EDUCATIONAL PURPOSE, THE REJECTION OF THE SAME WITH OUT ANY RHYME OR REASON IS UNJUSTIFIED AND OUGHT TO HAVE AC CEPTED THAT THE ASSESSEE WAS ENTITLED FOR EXEMPTION UNDER SEC.11 OF THE ACT 8. . THE CIT(A) FURTHER FAILED TO APPRECIATE THAT THIS BEING THE SOLE ACTIVITY OF ASSESSEE AND ALSO COMPLETE BOOKS O F ACCOUNTS HAVING BEEN MAINTAINED, THE REASONING THAT THE REQU IREMENTS OF SEC.11 (4) AND SEC.11 (4A) ARE NOT MET, IS NOT I N CONSONANCE WITH FACTS OBTAINING ON RECORD OF THE ASSESSEE.. ITA NO.397/MDS/2015 :- 3 -: 9. . THE CIT(A) OUGHT TO HAVE CONSIDERED THE MISCELLAN EOUS EXPENSES WRITTEN OFF OF RS.11,20,203, BEING THE UNR ECEIVABLE DEBTS OUTSTANDING FOR WHICH THE ENTIRE DETAILS WERE FURNISHED AND THUS ALLOWED THE CLAIM OF ASSESSEE 10. .. THE CIT(A), IN ANY EVENT, OUGHT TO HAVE APPRECIA TED THAT THE ACTIVITY OF ASSESSEE SQUARELY FALLS WITHIN THE PRECINCTS OF CHARITABLE ACTIVITY AS ENVISAGED IN SEC.2(15) AND H ENCE ALLOWED THE CLAIM FOR EXEMPTION U/S.11 OF THE ACT . 3. FACTS APROPOS ARE THAT ASSESSEE IS A TRUST REGISTER ED U/S.12A(A) OF THE ACT. IT HAD FILED A RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR CLAIMING EXEMPTION U/S.11 & 12 OF THE ACT. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE LD. ASS ESSING OFFICER THAT ASSESSEE WAS MAINTAINING SEPARATE ACCOUNTS UNDER TH REE HEADS NAMED AS TRUST MAIN ACCOUNT, TRUST FARM ACCOUNT AND SALES UNIT ACCOUNT. SALE UNIT ACCOUNT WAS ALSO KNOWN AS VAIGARAI PATHIP AGAM. AS PER LD. ASSESSING OFFICER OBJECT OF THE TRUST WAS TO PRINT, DISTRIBUTE AND SELL BOOKS FOR EDUCATIONAL PURPOSES. LD. ASSESSING OFFI CER EXAMINED BOOKS OF ACCOUNTS, ACCOUNTS STATEMENTS AND BANK STATEMENT S OF THE ASSESSEE AND REACHED AN OPINION THAT TRUST WAS PURELY ENGAGE D IN A COMMERCIAL ACTIVITY OF PRINTING, PUBLISHING, PURCHASING AND S ELLING BOOKS. AS PER LD. ASSESSING OFFICER THIS WAS A BUSINESS ACTIVITY AND NOT RELATABLE TO ANY CHARITABLE OBJECTS MENTIONED IN THE TRUST DEED. AS PER LD. ASSESSING OFFICER BY VIRTUE OF JUDGMENT OF KERALA H IGH COURT IN THE CASE OF CIT VS. P. KRISHNA WARRIOR 84 ITR 119 , ONCE THE DOMINANT OBJECT WAS PUBLICATION, PURCHASE AND SALE OF BOOKS, IT COULD NO LONGER ITA NO.397/MDS/2015 :- 4 -: BE CONSIDERED AS A CHARITY. AFTER GOING THROUGH SEC . 11(4) AND 11(4A) OF THE ACT, LD. ASSESSING OFFICER CONCLUDED A PUBL IC TRUST COULD AT THE BEST CARRY ON A BUSINESS WHICH WAS INCIDENTAL TO ATTAINMENT OF ITS OBJECTS AND NOTHING MORE. ONCE THE BUSINESS ITSELF WAS THE MAIN ACTIVITY, AS PER LD. ASSESSING OFFICER, ASSESSEE CO ULD NO LONGER BE ELIGIBLE FOR EXEMPTION PROVIDED U/SEC. 11 AND 12 OF THE ACT. 4. THE ASSESSEE DID POINT OUT THAT IT HAD GIVEN CONTRI BUTIONS TOTALING TO E16,40,626/- AS PART OF ITS CHARITABLE ACTIVIT IES. HOWEVER, AS PER LD. ASSESSING OFFICER ASSESSEE COULD NOT SHOW HOW T HE RECIPIENTS WERE BENEFITED OR HOW THIS COULD BE CONSTRUED AS CHARITY . LD. ASSESSING OFFICER WAS OF THE OPINION THAT EXEMPTION U/S.11 & 12 WOULD BE AVAILABLE ONLY WERE BUSINESS CARRIED ON WAS INCIDE NTAL TO THE ATTAINMENT OF THE MAIN OBJECTS AND GENERATING PROFI T WAS ONLY FOR FEEDING SUCH OBJECTS OF CHARITY. RELYING ON THE D EFINITION OF CHARITABLE PURPOSE GIVEN U/S.2(15) OF THE ACT, LD. ASSESSING O FFICER CONCLUDED THAT MERE BUSINESS OF PUBLICATION, PURCHASE AND SAL E OF BOOKS WOULD NOT CONSTITUTE CHARITY. LD. ASSESSING OFFICER ALSO NOTED THAT THERE WERE CERTAIN BALANCE SHEET ITEMS LIKE DCTO DEPOSIT, WHI CH SUBSTANTIATED THE BUSINESS NATURE OF THE FUNCTIONING OF THE ASSES SEE. FURTHER AS PER LD. ASSESSING OFFICER THOUGH ASSESSEE HAD SHOWN REC EIPT OF CONTRIBUTION TOTALING E66,47,188/- IN THE INCOME SI DE OF ITS INCOME AND ITA NO.397/MDS/2015 :- 5 -: EXPENDITURE ACCOUNT, THESE REPRESENTED SALE PROCEE DS OF BOOKS. THE BANK ACCOUNT OF THE ASSESSEE TRUST AS PER LD. ASSES SING OFFICER REFLECTED A SERIES OF INNUMERABLE NUMBER OF TRANSAC TIONS OF PURCHASE AND SALE WHICH PROVED A DEFINITE PATTERN OF BUSINES S. LD. ASSESSING OFFICER HELD THAT ASSESSEE TRUST WAS DOING ONLY BUS INESS ACTIVITY. HE COMPUTED INCOME OF THE ASSESSEE BY DEDUCTING FROM I TS GROSS RECEIPTS WHAT WAS CONSTRUED AS REASONABLE EXPENDITURE. WHI LE DEDUCTING SUCH REASONABLE EXPENDITURE, LD. ASSESSING OFFICER EXCLU DED THE CONTRIBUTIONS OF E16,40,626/- GIVEN BY THE ASSESSE E AND MISCELLANEOUS EXPENDITURE OF E11,20,203/- WRITTEN OFF BY THE ASSESSEE. 5. AGGRIEVED ON THE ABOVE, ASSESSEE MOVED IN APPEAL B EFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). IT WAS ARGUE D THAT IT HAD GIVEN A CONTRIBUTION OF E16,40,626/- TO THE FOLLOWI NG PARTIES WHICH WERE ONLY FOR EDUCATIONAL PURPOSE. NAME AMOUNT PURPOSE DETAILS SOCIETY OF ST. MARYS, DINDIGUL 2,00,000 EDUCATIONAL PURPOSE GIVEN FOR EDUCATIONAL ACTIVITY DALIT CAMP, DINDIGUL. 52,500 EDUCATIONAL PURPOSE EVERY YEAR JESUIT MADURAI PROVINCE CONDUCTING SUMMER DURATION CAMP FOR STUDENTS. VAIGARAI CONTRIBUTE SOME AMOUNT TO THAT CAMP ITA NO.397/MDS/2015 :- 6 -: DAWN BOOKS,DINDIGUL. 3,00,000 EDUCATIONAL PURPOSE PRINTING BOOKS FOR EDUCATION ARUL KADAL, CHENNAI. 20,000 EDUCATIONA L PURPOSE CONDUCTING SEMINAR MEDIA ORIENTED SERVICES FOR ACTION AND INTEGRATED CONSCIENTIZTION. 25,000 EDUCATIONAL PURPOSE TRAINING PROGRAMME CONDUCE D BY MOSAIC COMMUNICATION COMMISSION, CHENNAI. 50,000 EDUCATIONAL PURPOSE WRITING SKILLS WORKSHOP I NSTITUTE OF HEART OF JESUS 7,74,114 EDUCATIONAL PURPOSE VALUE EDUCATION BOOKS PRINTING ST. JOSEPHS TRICHY 15,000 EDUCATIONAL PURPOSE CONDUCTING SEMINAR THIRULRUDHAYA THOOTHAN, DINDIGUL 1,79,012 EDUCATIONAL PURPOSE PRINTING BOOKS FOR EDUCATION KANAL B OOK WRITERS 25,000 EDUCATIONAL PURPOSE WORKSHOP CONDUCED TO STUDENTS, COLLECTED THEIR ARTICLES AND SIGN AS KANAL BOOK AND DISTRIBUTE THEM TO IMPROVE THEIR SKILLS 16,40,626 ASSESSEE ALSO STATED THAT IT WAS ENGAGED ONLY IN ED UCATIONAL ACTIVITIES AND BY VIRTUE OF JUDGMENTS OF HONBLE APEX COURT IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPORAT ION LTD VS. CIT 319 ITR 317 AND OXFORD UNIVERSITY PRESS VS. CIT 247 ITR 658 , IT WAS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT IMPRES SED. ACCORDING TO HIM, MERELY BECAUSE ASSESSEE HAD CONTRIBUTED A S UM OF E16,40,626/- TO PERSONS LISTED IN TABLE MENTIONED A BOVE WOULD NOT ITA NO.397/MDS/2015 :- 7 -: SHOW THAT THESE CONTRIBUTIONS WERE FOR ANY CHARITAB LE PURPOSE. FURTHER, AS PER THE LD. COMMISSIONER OF INCOME TAX (APPEALS), PRINTING AND SELLING OF TEXT BOOKS COULD BE CONSIDERED AS A CHARITABLE ACTIVITY ONLY WHERE SUCH BOOKS WERE OF A NATURE PRESCRIBED B Y THE EDUCATIONAL DEPARTMENT OF A STATE GOVERNMENT. AS PER LD. COMM ISSIONER OF INCOME TAX (APPEALS) ASSESSEE WAS PRINTING BOOKS D EALING WITH MORAL SUBJECTS AND THESE WERE NOT IN THE NATURE OF TEXT BOOKS. LD. COMMISSIONER OF INCOME TAX (APPEALS) ALSO AFFIRMED THE VIEW TAKEN BY THE LD. ASSESSING OFFICER THAT PRINTING AND SELL ING BOOKS CARRIED ON BY THE ASSESSEE WAS NOT INCIDENTAL TO THE ATTAINME NT OF ITS MAIN OBJECTS BUT WAS DONE AS THE MAIN ACTIVITY. THUS, A CCORDING TO LD. COMMISSIONER OF INCOME TAX (APPEALS) EXEMPTION U/S. 11 AND 12 OF THE ACT WAS RIGHTLY DENIED BY THE LD. ASSESSING OFF ICER. HE UPHELD THE ORDER OF THE LD. ASSESSING OFFICER. 6. NOW BEFORE ME, LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE STRONGLY ASSAILING THE ORDERS OF THE LOWER AUTHORIT IES SUBMITTED THAT ASSESSEE WAS DOING ONLY EDUCATIONAL ACTIVITY. AS PE R LD. AUTHORISED REPRESENTATIVE ASSESSEE NEVER CLAIMED ITSELF TO BE PURSUING ANY OBJECT OF GENERAL PUBLIC UTILITY. CONTENTION OF THE LD.AR WAS THAT ASSESSEE WAS PRINTING AND DISTRIBUTING BOOKS WHICH WERE PROMOTIN G MORAL VALUES TO THE SOCIETY. ACCORDING TO HIM, SUBSTANTIAL PART OF BOOKS WERE FREELY DISTRIBUTED AND THE VALUE OF THE BOOKS DISTRIBUTED TO DIFFERENT ITA NO.397/MDS/2015 :- 8 -: ORGANIZATION CAME TO E16,40,626/-. NAME OF THE ORG ANIZATIONS TO WHOM ASSESSEE HAD GIVEN BOOKS FREE OF COST, LIST O F WHICH WAS REPRODUCED BY LD. COMMISSIONER OF INCOME TAX (APPEA LS) CLEARLY PROVED THAT ASSESSEE WAS ENGAGED ONLY IN CHARITY. A S PER LD. AUTHORISED REPRESENTATIVE ASSESSEE HAD RECEIVED CON TRIBUTION OF E66,47,188.42 FROM VARIOUS PARTIES FOR ITS OBJECTS. CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE WAS THAT PRINTING OF MORAL BOOKS AND DISTRIBUTING IT FREE WAS ONE OF THE MAIN OBJECT OF THE ASSESSEE TRUST AND SUCH ACTIVITY SQUARELY FELL WITHIN THE DEFINITI ON OF CHARITABLE PURPOSE U/S.2(15) OF THE ACT. EVEN OTHERWISE AS PE R LD. AUTHORISED REPRESENTATIVE, PROPERTY HELD UNDER TRUST COULD ALS O INCLUDE A BUSINESS UNDERTAKING BY VIRTUE OF SEC. 11(4) OF THE ACT. FURTHER, AS PER LD. AUTHORISED REPRESENTATIVE THERE WAS NO CASE FOR THE REVENUE, THAT ASSESSEE HAD NOT MAINTAINED SEPARATE BOOKS OF ACCOUNTS FOR ITS SALES UNIT NAMELY VAIGARAI PATHIPAGAM. IN ANY CAS E, ACCORDING TO HIM MISCELLANEOUS EXPENDITURE OF E11,20,203/- WHICH WAS NOT ALLOWED WAS NOTHING BUT BAD DEBTS WHICH WERE WRITTEN OFF AND B Y VIRTUE OF JUDGMENT OF HONBLE APEX COURT IN THE CASE OF TRF VS. CIT 323 ITR 397 SUCH WRITE OFF WAS AN ALLOWABLE EXPENDITURE. 7. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.397/MDS/2015 :- 9 -: 8. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE ORDERS OF THE AUTHORITIES BELOW. IT MIGHT BE TRUE THAT ASS ESSEE HAD A NUMBER OF OBJECTS IN ITS FOUNDING DOCUMENT WHICH WERE CHA RITABLE IN NATURE. HOWEVER, THE ONLY ACTIVITY CARRIED ON BY THE ASSES SEE DURING THE RELEVANT PREVIOUS YEAR WAS PRINTING, PUBLISHING AND SELLING BOOKS. INCOME AND EXPENDITURE ACCOUNTS OF THE ASSESSEE WH ICH HAS BEEN SEPARATELY PREPARED UNDER THREE HEAD NAMELY MAIN A CCOUNT, FARM ACCOUNT AND SALES UNIT ACCOUNT, DO NOT SHOW IN THE EXPENDITURE SIDE ANY PAYMENTS WHICH COULD BE CONSTRUED AS CHARITABLE AS PER THE DEFINITION OF CHARITABLE PURPOSE GIVEN IN SEC. 2(15) OF THE ACT. THE ONLY AMOUNT CLAIMED BY THE ASSESSEE WHICH COULD ARG UABLY CONSTRUED AS CHARITY IS A SUM OF E16,40,626/- PAID TO 10 DIF FERENT PERSONS LISTED AT PARA 4 ABOVE. BUT FOR STATING THAT THESE PERSO NS WERE ALSO CARRYING OUT EDUCATIONAL ACTIVITY, NOTHING WHATSOEVER WAS B ROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THESE PERSONS WERE OR GANIZATIONS REGISTERED U/S. 12A(A) OR 12AA OF THE ACT OR WERE P URSUING ANY CHARITABLE CAUSE. FIRST REQUIREMENT FOR CLAIMING E XEMPTION U/S.11 AND 12 OF THE ACT AS A CHARITY IS THAT THE PERSON SHOU LD BE CARRYING OUT AN ACTIVITY WHICH CAN BE CALLED CHARITABLE PURPOSE AS DEFINED IN SEC. 2(15) OF THE ACT. THE SAID SECTION IS REPRODUCED H EREUNDER:- CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONM ENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ITA NO.397/MDS/2015 :- 10 -: ARTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. ASSESSEE IS CLAIMING TO FALL WITHIN THE LIMB OF E DUCATION. LD. COUNSEL FOR THE ASSESSEE SPECIFICALLY STATED THAT CLAIM OF THE ASSESSEE WAS NOT UNDER THE LAST LIMB NAMELY ADVANCEMENT OF ANY OT HER OBJECT OF GENERAL PUBLIC UTILITY. CONTENTION OF THE ASSESSE E IS THAT PRINTING OF MORAL BOOKS AND SELLING THEN WOULD BE EDUCATION , THEREBY MAKING IT ELIGIBLE FOR CLAIMING EXEMPTION U/S.11 & 12 OF THE ACT. THE TERM EDUCATION IN THE CONTEXT OF CHARITY, FOR CLAIM ING EXEMPTION FROM THE INCOME TAX ACT, CANNOT BE GIVEN A VERY WIDE MEANING SO AS TO INCLUDE IMPARTING OF KNOWLEDGE IN ANYTHING AND EVERYTHING. PRINTING, PUBLISHING AND SELLING BOOKS WHICH ENCOURAGES BUILD ING OF MORAL VALUES, MAY BE GOOD FOR THE SOCIETY BUT CANNOT BE C ONSTRUED AS EDUCATION COMING WITHIN THE AMBIT OF SECTION 2(1 5) OF THE ACT. ITS PERIMETER HAS BEEN DEFINED BY HONBLE APEX COURT IN THE CASE OF SOLE TRUSTEE , LOKA SHIKSHANA TRUST VS. CIT 101 ITR 234 TO BE SOMETHING AKIN TO NORMAL SCHOOLING. 9. NO DOUBT, HONBLE APEX COURT IN THE CASE OF ACIT VS. THANTHI TRUST 247 ITR 785 DID HOLD THAT A BUSINESS WHICH DO NOT DIRECTLY ACCOMPLISH WHOLLY OR IN PART THE CHARITABLE OBJECT S OF THE TRUST BUT ONLY FEEDS SUCH ACTIVITIES COULD NOT BE HELD AS A B USINESS CARRIED ON IN THE COURSE OF ACTUAL ACCOMPLISHMENT OF THE OBJECTS OF THE TRUSTS. ITA NO.397/MDS/2015 :- 11 -: HOWEVER, THE ASSESSEE HERE WAS ENGAGED IN PRINTING, PUBLISHING AND SELLING BOOKS AS ITS MAIN ACTIVITY. PRIOR TO SUBSTI TUTION OF SUBSECTION 4A OF SECTION 11 THROUGH FINANCE (NO.2) ACT, 1991 WITH EFFECT FROM 01.04.1992, A BUSINESS OF PRINTING OR PUBLISHING O F BOOKS COULD HAVE BEEN CONSIDERED FOR EXEMPTION WHERE A TRUST EXISTE D FOR A PUBLIC RELIGIOUS PURPOSE OR SUCH BUSINESS WAS CARRIED ON B Y AN INSTITUTION THROUGH ITS BENEFICIARIES. AFTER THE SUBSTITUTION OF THE SAID DEDUCTION THIS BENEFIT IS AVAILABLE ONLY WHERE SUCH BUSINESS WAS INCIDENTAL TO THE ATTAINMENT OF MAIN OBJECT. THERE IS A CLEAR FIN DING BY THE LD. ASSESSING OFFICER THAT CONTRIBUTION OF E E66,47,188 .42 CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE WAS IN LIEU OF BOOKS DISTRIBUTED BY IT, AND APART FROM THIS ASSESSEE HAD MADE DIRECT SALE OF BOOKS OF VALUE E60,71,555.99. THUS ASSESSEE WAS CARRYING ON THE BU SINESS OF PRINTING, PUBLICATION AND SALE OF BOOKS AND NOT ANY CHARITY. CONSIDERING ALL THESE ASPECTS, WE ARE OF THE OPINIO N THAT LOWER AUTHORITIES WERE JUSTIFIED IN DENYING THE CLAIM OF EXEMPTION. 10. NOW, COMING TO THE CLAIM OF THE ASSESSEE TH AT A SUM OF E11,20,203/- WRITTEN OFF AS MISCELLANEOUS EXPENDITU RE WAS BAD DEBTS OF ITS BUSINESS, SUCH CLAIM IS DEFINITELY ALLOWABL E BY VIRTUE OF THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF TRF LIMITED (SUPRA ). HOWEVER NONE OF THE LOWER AUTHORITIES HAD VERIFIED WHETHER THE ITA NO.397/MDS/2015 :- 12 -: AMOUNT REPRESENTED WRITE OFF OF BAD DEBTS. TO THIS EXTENT VERIFICATION IS NECESSARY. THUS WHILE UPHOLDING THE ORDERS OF TH E LOWER AUTHORITIES DENYING THE ASSESSEE EXEMPTION CLAIMED U/S.11 & 12 OF THE ACT, WE REMIT THE ISSUE AS TO WHETHER MISCELLANEOUS EXPENDI TURE WRITTEN OFF ACTUALLY REPRESENTED BAD DEBTS, TO THE FILE OF THE LD. ASSESSING OFFICER FOR VERIFICATION AFRESH. IN CASE THEY ARE BAD DE BTS IT HAS TO BE ALLOWED. ORDERED ACCORDINGLY. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON TUESDAY, THE 31ST DAY OF JANUAR Y, 2017, AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) $ % / ACCOUNTANT MEMBER &'! / CHENNAI ( / DATED: 31ST JANUARY, 2017. KV ) '+, -,' / COPY TO: 1 . / APPELLANT 3. .' () / CIT(A) 5. ,12 '3 / DR 2. / RESPONDENT 4. .' / CIT 6. 24 5! / GF