ITO (Exemptions), New Delhi V. M/s. Indian Olympic Association, New Delhi

ITA 434/DEL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3058 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Capital asset; Depreciation; Charitable institution; Benefit of exemption
• Section: 12A; 32

Judgement Text

1 ITA NO. 434/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 434/DEL/2016 ( A.Y 2009-10) ITO (EXEMPTIONS) WARD-1(2), ROOM NO. 2417, 24 TH FLOOR, E-2-BLOCK, PRATYAKSH KAR BHAWAN, DR. SHYAMA PRASAD MUKHERJEE CIVIL CENTRE, JAWAHAR LAL NEHRU MARG NEW DELHI (APPELLANT) VS INDIAN OLYMPIC ASSOCIATION OLYMPIC BHAWAN, B-29. QUTUB INSTITUTIONAL AREA NEW DELHI AAAT13010J (RESPONDENT) APPELLANT BY MS. ASHIMA NEB, SR. DR RESPONDENT BY SH. NIRBHAY MEHTA, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 9/11/2015 PASSED BY CIT(A)-40, NEW DELHI FOR ASSESSMENT YEAR 2009-10. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) IS ERRED IN IGNORING THE FACT THAT THE ACTIV ITIES OF THE ASSESSEE INVOLVE RENDERING OF SERVICE IN RELATION TO CARRYIN G ON A COMMERCE OR BUSINESS AND HENCE, PROVISO TO SECTION 2(15) IS APP LICABLE IN THIS CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. DATE OF HEARING 27.08.2018 DATE OF PRONOUNCEMENT 28.08.2018 2 ITA NO. 434/DEL/2016 CIT (A) IS ERRED IN ALLOWING DEPRECIATION BY IGNORI NG THE FACT THAT CLAIM OF DEPRECIATION U/S 32 COMES UNDER THE CHAPTER IV O F THE I.T. ACT, WHEREAS CHARITABLE OR RELIGIOUS INSTITUTIONS ARE GO VERNED BY INDEPENDENT CODE IN ITSELF UNDER CHAPTER III OF THE I.T. ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF INCOME IN RESPECT OF DEPRECIATION IN VIEW OF THE CASE LAWS HO N'BLE SUPREME COURT IN THE CASE OF ESCORTS & OTHERS REPORTED IN 1 99 ITR 43 AND RECENT DECISION OF THE HON'BLE DELHI COURT IN THE C ASE OF DIT(E) VS. CHARANJIV CHARITABLE TRUST DATED 18.03.2014. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 3. THE ASSESSEE ORGANIZATION WAS REGISTERED UNDER S OCIETIES ACT, 1860 ON 12/6/1965. IT IS REGISTERED U/S 12A OF THE INCOME TAX ACT VIDE REGISTRATION GRANTED BY THE DIT (E) VIDE ORDER DATED 20/8/2002 W .E.F. 27/2/2002. THE INDIAN OLYMPIC ASSOCIATION IS AN APEX SPORTS BODY I N INDIA WHICH REPRESENTED THE COUNTRY AND IS A MEMBER OF INTERNATIONAL OLYMPI C ASSOCIATION. ASSOCIATION OF DIFFERENT DISCIPLINES IN SPORTS IN INDIA ARE MEM BERS AFFILIATED TO IOA, THE ACTIVITY OF THE ASSOCIATION INCLUDES ORGANIZING THE SPORTS ACTIVITIES UNDER THE AEGIS OF MINISTRY OF YOUTH AFFAIRS AND SPORTS OF GO VERNMENT OF INDIA AND INTERNATIONAL OLYMPIC ASSOCIATION. UTILIZATION CER TIFICATES WERE REGULARLY SUBMITTED BY IOA IN CONNECTION WITH SUCH GRANTS. RE TURN FOR THE ASSESSMENT YEAR 2009-10 WAS FILED ON 30/09/2009 DISCLOSES THE NIL INCOME. THE CASE WAS SELECTED FOR SCRUTINY AS PER NORMS AND NOTICE U /S 143(2) WAS ISSUED ON 20/9/2010 IN RESPONSE TO THE SAME NOTICES AND SUBSE QUENT NOTICES U/S 142(1), CHARTERED ACCOUNTANTS AND AUTHORIZED REPRES ENTATIVE OF THE ASSESSEE TRUST APPEARED FROM TIME TO TIME AND SUBMITTED DETA ILS AND PARTICULARS IN SUPPORT OF THE RETURN WHICH ARE EXAMINED BY THE ASS ESSING OFFICER. THE ASSESSING OFFICER OBSERVED THAT DURING THE ASSESSM ENT YEAR 2009-10, THE ASSESSEE WAS IN RESPECT OF INCOME FROM THE FOLLOWIN G MAJOR SOURCES ARE AS UNDER:- 3 ITA NO. 434/DEL/2016 INCOME AMOUNT (RS.) GRANTS RECEIVED FROM MOYAS FOR GAMES 12,820,586/ - GRANTS RECEIVED FROM INTERNATIONAL OLYMPIC COMMITTEE 24,087,333/ - DONATIONS 12,000,000/ - SPONSORSHIP FOR BEIJING OLYMPIC GAMES (BY SAMSUNG) 2,312,000/ - 4. THE ASSESSING OFFICER HELD THAT THE CASE OF THE ASSESSEE IS COVERED BY PROVISO TO SECTION 2(15) AND HENCE DOES NOT HAVE WI THIN THE CATEGORY OF CHARITABLE ORGANIZATION FROM ASSESSMENT YEAR 2009-1 0 ONWARDS. ACCORDINGLY, FOR THE YEAR UNDER ASSESSMENT THE BENEFIT U/S 11/12 WAS NOT ALLOWED TO THE ASSESSEE BY THE ASSESSING OFFICER. THE ASSESSING O FFICER FURTHER MENTIONED THAT THE REGISTRATION GRANTED TO THE ASSESSEE U/S 1 2A (1) OF THE INCOME TAX ACT BY THE DIT (EXEMPTIONS DELHI) CLEARLY STATED THAT S UCH REGISTRATION DOES NOT AUTOMATICALLY EXAMINED THE INCOME OF THE TRUST/ASSO CIATION AND THAT THE TAXABILITY OF THE INCOME SHALL BE EXAMINED AND DECI DED BY THE ASSESSING OFFICER ON THE BASIS OF ACTIVITY CARRIED OUT FROM YEAR TO Y EAR. THUS, THE ASSESSING OFFICER MADE ADDITION OF RS.1,72,82,290/- BY DENYI NG THE BENEFIT OF EXEMPTION U/S 12A OF THE INCOME TAX ACT AS WELL AS NOT ALLOWI NG THE CLAIM FOR DEPRECATION. 5. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE A SSESSEE. THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 6. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY MADE ADDITIONS AND DISALLOWED CLAIM FOR DEPRECATION AS T HE ACTIVITIES OF THE ASSESSEE INVOLVED RENDERING OF SERVICE IN RELATION TO CARRYI NG ON COMMERCE OR BUSINESS AND HENCE PROVISO TO SECTION 2(15) IS APPLICABLE IN THIS CASE. THE LD. DR FURTHER SUBMITTED THAT THE HONBLE DELHI HIGH COURT IN CASE OF DIT (EXEMPTION) 4 ITA NO. 434/DEL/2016 VS. M/S INDERPRASTHA CANCER SOCIETY HELD THAT WHEN AN INCOME IS REQUIRED TO BE APPLIED, ACCUMULATED OR SET APART FOR APPLICATIO N, THEN FOR SUCH PURPOSES, THE INCOME SHALL BE DETERMINED WITHOUT ANY DEDUCTIO N OR ALLOWANCE BY WAY OF DEPRECIATION OR OTHERWISE IN RESPECT OF AN ASSET, A CQUISITION OF WHICH HAS BEEN CLAIMED AS APPLICATION OF INCOME UNDER THIS SECTION , THE SAME OR ANY OTHER PREVIOUS YEAR. 7. THE LD. AR SUBMITTED THAT THIS ISSUE HAS BEEN DE CIDED IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 WHERE IN THE DEPARTMENT HAS FILED APPEAL BEFORE THE TRIBUNAL ORD ER DATED 19/7/2018 BEING ITA NO. 1130/DEL/2016. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT IN ASSESSMENT YEAR 2011-12 SIMILAR FACTS WERE CONTESTED BEFORE THE TRIBUNAL IN ASSESSEES OW N CASE BY THE REVENUE. THE TRIBUNAL HELD AS UNDER:- 15. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY REASON FOR DENYING THE CLAIM OF EXE MPTION IS PROVISO TO SECTION 2(15) OF THE ACT. 16. SECTION 2(15) AS IT STOOD IN THE STATUTE AFTER THE REPEAL OF THE 1922 ACT READ AS UNDER: SECTION 2(15) CHARITABLE PURPOSE INCLUDES RELI EF OF THE POOR, EDUCATION, MEDICAL RELIEF AND THE ADVANCEMENT OF ANY OTHER OBJ ECT OF GENERAL PUBLIC UTILITY NOT INVOLVING THE CARRYING ON OF ANY ACTIVI TY OF PROFIT. THIS PROVISION REMAINED UNCHANGED TILL ITS AMENDMENT BY THE FINANC E ACT, 1983 AND WITH EFFECT FROM 1.4.1984 NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY OF PROFIT WAS OMITTED. THE SECTION REMAINED UNCHANGED TILL IT WAS AMENDED BY THE FINANCE ACT, 2008 W.E.F 1.4.2009. THIS MEANS THAT T ILL THE AMENDMENT BROUGHT BY THE FINANCE ACT, 2008 THE REVENUE WAS CO NVINCED THAT THE 5 ITA NO. 434/DEL/2016 ASSESSEE-TRUST WAS NOT CARRYING OUT ANY COMMERCIAL ACTIVITY IN THE GARB OF CHARITABLE PURPOSE. THE ACTIVITIES OF THE TRUST WER E GENUINE AND WERE FOR THE CHARITABLE PURPOSE. 17. NOW LET US CONSIDER THE PROVISIONS OF SEC. 2(15 ) AS THEY STAND NOW. CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST]AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIV E OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY: [PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS (TWENTY FIVE LAKH RUPEES) OR LESS IN THE PREVIOUS YEAR]. 18. THIS PROVISO WAS ADDED ONLY IN RESPECT OF THE L AST LIMB OF THE PROVISIONS OF SEC. 2(15) WHICH RELATES TO THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES CARRYING ON OF AN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS FOR A CESS OR FEE. THE SECOND LIMB IS NOT RELEVANT TO THE FACT UNDER CONSI DERATION. A CLOSE PERUSAL OF THE AFOREMENTIONED PROVISO SHOWS THAT THE SPIRIT OF THE SECTION IS SAME AS PER THE SECTION 2(15) AS IT STOOD PRIOR TO THE AMENDMEN T BROUGHT BY FINANCE ACT, 1983 AS MENTIONED HEREINABOVE. 19. ALL THAT HAS TO BE DECIDED NOW IS WHETHER THE S PONSORSHIP CONTRACT WITH SAMSUNG INDIA ELECTRONICS PVT. LTD CONSTITUTES CARR YING ON OF ANY ACTIVITY IN 6 ITA NO. 434/DEL/2016 THE NATURE OF TRADE, COMMERCE OR BUSINESS, WHICH AC TIVITIES THE TRUST IS CARRYING ON PRIOR TO THE AMENDMENT BROUGHT BY FINAN CE ACT, 1983. GENERAL MEANS PERTAINING TO WHOLE CLASS, PUBLIC MEANS THE BODY OF PEOPLE AT LARGE INCLUDIN G ANY CLASS OF THE PUBLIC, UTILITY MEANS USEFULNESS. 20. THEREFORE, THE ADVANCEMENT OF ANY OBJECT OF BEN EFIT TO THE PUBLIC OR A SECTION OF THE PUBLIC AS DISTINGUISHED FROM INDIVID UAL AND GROUP OF INDIVIDUALS WOULD BE A CHARITABLE PURPOSE. AN OBJECT OF PUBLIC UTILITY NEED NOT BE AN OBJECT IN WHICH THE WHOLE OF THE PUBLIC IS INTERESTED. IT IS SUFFICIENT IF WELL DEFINED SECTION OF THE PUBLIC BENEFITS BY THE OBJECTS WHICH MEANS THAT THE EXPRESSION OBJECT OF GENERAL PUBLIC UTILITY IS NOT RESTRICTE D TO OBJECTS BENEFICIAL TO THE WHOLE MANKIND. AN OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY. IN THE CASE OF CIT VS SWAST IK TRADING CO. LTD. 113 ITR 852, THE HONBLE GUJARAT HIGH COURT HAS HELD THAT E STABLISHING AND MAINTAINING GAUSHALAS AND PANJRAPOLE CONSTITUTES CH ARITABLE PURPOSE. 21. THE HONBLE FINANCE MINISTER WHILE PRESENTING THE FINANCE ACT 2008 IN HIS BUDGET SPEECH STATED AS FOLLOWS: CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF AND ANY OTHER OBJECTS OF GENERAL PUBLIC UTIL ITY. THESE ACTIVITIES ARE TAX EXEMPT AS THEY SHOULD BE. HOWEVER, SOME ENTITIES CA RRYING ON REGULAR TRADE, COMMERCE OR BUSINESS OR PROVIDING SERVICES I N RELATION TO ANY TRADE, COMMERCE OR BUSINESS AND EARNING INCOMES HAVE SOUGH T TO CLAIM THAT THEIR PURPOSE WOULD ALSO FALL UNDER CHARITABLE PURPOSE. OBVIOUSLY, THIS WAS NOT THE INTENTION OF THE PARLIAMENT AND HENCE, I PR OPOSE TO AMEND THE LAW TO EXCLUDE THE AFORESAID CASES. GENUINE CHARITABLE ORGANIZATIONS WILL NOT IN ANY WAY BE AFFECTED. 7 ITA NO. 434/DEL/2016 22. THUS, THE INTENTION OF THE HONBLE FINANCE MINI STER WAS ONLY TO EXCLUDE FROM EXEMPTION, ENTITIES CARRYING ON BUSINESS AND E ARNING INCOMES FOR WHICH EXEMPTION WAS CLAIMED ON THE BASIS THAT THE PURPOSE WOULD FALL UNDER CHARITABLE PURPOSE. 23. THE CBDT CIRCULAR NO. 11/2008 DATED 19.12.2008 HAS EXPLAINED THE IMPLICATIONS ARISING FROM THE AMENDMENT BROUGHT TO THE PROVISIONS OF SEC 2(15) OF THE ACT. THE CBDT CLARIFIES THAT THE NEWLY INSERTED PROVISO TO SEC. 2(15) WILL NOT APPLY IN RESPECT OF THE FIRST THREE LIMBS OF SEC. 2(15) I.E. RELIEF OF THE POOR, EDUCATION OR MEDICAL RELIEF. CONSEQUENTLY WHERE THE PURPOSE OF A TRUST OR INSTITUTION IS RELIEF OF THE POOR, EDUCATI ON OR MEDICAL RELIEF, IT WILL CONSTITUTE CHARITABLE PURPOSE, EVEN IF IT IS INCIDE NTALLY INVOLVES THE CARRYING ON OF COMMERCIAL ACTIVITY. THE BOARD FURTHER CLARIFIED THAT THE NEWLY INSERTED PROVISO TO SEC. 2(15) WILL APPLY ONLY TO ENTITIES W HOSE PURPOSE IS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY I.E. 4TH LIMB OF THE DEFINITION OF THE CHARITABLE PURPOSE CONTAINED IN SEC. 2(15). THE CIR CULAR FURTHER CLARIFIED IN THE FINAL ANALYSIS, WHETHER THE ASSESSEE HAS FOR IT S OBJECTS THE ADVANCEMENT OF ANY OTHER OBJECT OR GENERAL PUBLIC UTILITY IS A QUESTION OF FACT. IF SUCH ASSESSEE IS ENGAGED IN ANY ACTIVITY IN THE NATURE O F TRADE, COMMERCE OR BUSINESS OR RENDERS ANY SERVICE IN RELATION TO TRAD E, COMMERCE OR BUSINESS, IT WOULD NOT BE ENTITLED TO CLAIM THAT ITS OBJECT IS C HARITABLE PURPOSE. IN SUCH A CASE, THE OBJECT OF GENERAL PUBLIC UTILITY WILL BE ONLY A MASK OR DEVICE TO HIDE THE TRUE PURPOSE WHICH IS TRADE COMMERCE OR BUSINES S OR THE RENDERING OF ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS EACH CASE WOULD THEREFORE BE DECIDED ON ITS OWN FACTS AND NO GENERALIZATION I S POSSIBLE. 24. THUS, EVEN THE CBDT DOES NOT LAY DOWN ANY GUIDE LINES FOR DETERMINING WHETHER THE ENTITY IS CARRYING ON ANY COMMERCIAL AC TIVITY. EACH CASE WOULD THEREFORE TO BE DECIDED ON ITS OWN FACTS AND AS THE CBDT HAS CLARIFIED GENERALIZATION IS NOT POSSIBLE. 8 ITA NO. 434/DEL/2016 25. COMING BACK TO THE OBJECTS OF THE IMPUGNED ASSO CIATION, THE FUNDAMENTAL OR DOMINANT FUNCTION OF THE ASSOCIATION IS TO REPRE SENT THE COUNTRY IN INTERNATIONAL FORUMS. ASSOCIATIONS OF DIFFERENT DIS CIPLINES IN SPORTS IN INDIA ARE MEMBERS/AFFILIATED TO IOA. IN FURTHERANCE OF IT S ACTIVITIES, THE ASSOCIATION NOT ONLY REQUIRES GRANTS FROM THE GOVERNMENT, BUT O N MANY OCCASIONS SPONSORSHIPS. THIS CANNOT BE AN ACTIVITY BY ITSELF AMOUNTING TO CARRYING ON OF ANY BUSINESS, TRADE OR COMMERCE. THE IMPUGNED ASSOC IATION IS ENGAGED IN MULTI LEVEL ACTIVITIES OF DIVERSE NATURE BUT THE PR IMARY AND DOMINANT ACTIVITY IS PROMOTING SPORTS ACTIVITIES NOT ONLY IN INDIA BUT A LSO IN INTERNATIONAL FORUM. THE IMPUGNED ASSOCIATION WOULD NOT LOSE ITS CHARACT ER OF CHARITABLE PURPOSE MERELY BECAUSE SOME SPONSORSHIP WAS ACCEPTED. 26. IN THE CASE OF SOLE TRUSTEE, LOKA SHIKSHANA TRU ST V. COMMISSIONER OF INCOME-TAX 101 ITR 234, THE HONBLE JUSTICE J. BAIG SPEAKING FOR THE APEX COURT THUS SAID THAT: IF THE PROFITS MUST NECESSARILY FEED A CHARITABLE PURPOSE, UNDER THE TERMS OF THE TRUST, THE MERE FACT THAT THE ACTIVITI ES OF THE TRUST YIELD PROFIT WILL NOT ALTER THE CHARITABLE CHARACTER OF T HE TRUST. THE TEST NOW IS, MORE CLEARLY THAN IN THE PAST, THE GENUINENESS OF THE PURPOSE TESTED BY THE OBLIGATION CREATED TO SPEND THE MONEY EXCLUSIVELY OR ESSENTIALLY ON CHARITY. 27. THE TEST FOR CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AS MENTIONED IN THE FIRST PROVISO TO SEC. 2(15) WOULD BE SATISFIED IF PROFIT MAKING IS NOT THE REAL OBJECT. THE HONBLE D ELHI HIGH COURT IN THE CASE OF ICAI VS DIRECTOR GENERAL OF INCOME TAX (EXEM) 34 7 ITR 99 HAD THE OCCASION TO CONSIDER THE GRIEVANCE OF THE ICAI WHICH WAS DEN IED EXEMPTION U/S. 10(23C)(IV) OF THE ACT BECAUSE IN THE OPINION OF TH E DGIT (EXEM.) THE INSTITUTE WAS HOLDING COACHING CLASSES AND THEREFORE WAS NOT AN EDUCATIONAL INSTITUTION, CONSEQUENTLY THE INSTITUTE WAS COVERED UNDER THE LAST LIMB OF CHARITABLE PURPOSE I.E. ADVANCE OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY IN 9 ITA NO. 434/DEL/2016 THE LIGHT OF THE AMENDMENT BROUGHT O SEC. 2(15) OF THE ACT AS THE INSTITUTE WAS CHARGING FEES FOR CONDUCTING COACHING CLAUSES AND M AKING HUGE MONEY IN A SYSTEMATIC AND ORGANIZED MANNER. CONSIDERING THE FA CTS IN THE LIGHT OF THE AMENDED PROVISIONS OF SEC. 2(15), THE HONBLE DELHI HIGH COURT HELD THAT THE ORDER DENYING THE EXEMPTION WAS NOT VALID. 28. RELIANCE BY THE LD. DR ON VARIOUS DECISIONS TO BUTTRESS HIS SUBMISSIONS ARE MISPLACED IN AS MUCH AS THE DOMINANT ACTIVITY C ANNOT BE BRUSHED ASIDE LIGHTLY EVEN AFTER THE AMENDMENT. 26. AFTER CONSIDERING THE ENTIRE FACTS IN TOTALITY IN THE LIGHT OF DISCUSSION HEREINABOVE AND ALSO DRAWING SUPPORT FROM THE SPEEC H OF THE FINANCE MINISTER AND SUBSEQUENT CLARIFICATION ISSUED BY THE CBDT WITHIN THE FRAMEWORK OF AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT, IN OUR CONSIDERED OPINION, THERE WAS NO MATERIAL WHICH MAY SUGGEST THAT THE ASSESSEE ASSOCIATION WAS CONDUCTING ITS AFFAIRS SOL ELY ON COMMERCIAL LINES WITH THE MOTIVE TO EARN PROFIT. THERE IS ALSO NO MA TERIAL WHICH COULD SUGGEST THAT THE ASSESSEE ASSOCIATION HAS DEVIATED FROM ITS OBJECTS WHICH IT HAS BEEN PURSUING SINCE PAST MANY DECADES. IN OUR HUMBLE OPI NION AND UNDERSTANDING OF LAW, PROVISO TO SECTION 2(15) OF THE ACT IS NOT APPLICABLE TO THE FACTS OF THE CASE AND THE ASSESSEE-ASSOCIATION DESERVES BENEFIT U/S 11/12 OF THE ACT. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. GROUND NO. 1 IS ACCORDINGLY DI SMISSED. 27 . NEXT GRIEVANCE RELATES TO ALLOWANCE OF DEPREC IATION. 28. THIS ISSUE IS NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE JUDGMENT OF THE HON'BLE SUPREME COUR T IN THE CASE OF RAJASTHAN AND GUJARAT CHARITABLE FOUNDATION 402 ITR 441 WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT EVEN THOUGH THE EXPENDITURE INCURRED FOR ACQUISITION OF CAPITAL ASSETS WAS TREATED AS APPLIC ATION OF INCOME FOR 10 ITA NO. 434/DEL/2016 CHARITABLE PURPOSES U/S 11A(1) OF THE ACT, YET DEPR ECIATION WOULD BE ALLOWED ON ASSETS SO PURCHASED. GROUND NO. 2 IS, ACCORDINGL Y, DISMISSED. 29. GRIEVANCE RAISED VIDE GROUND NO. 3 IS RELATED TO AND CONSEQUENTIAL TO THE GRIEVANCE RAISED VIDE GROUND NO. 1. 30. SINCE VIDE GROUND NO. 1 WE HAVE DIRECTED THE AO TO ALLOW BENEFIT OF EXEMPTION U/S 11/12 OF THE ACT, THE AO IS DIRECTED ACCORDINGLY. 31. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 1130/DEL/2016 IS DISMISSED.: THE FACTS ARE IDENTICAL IN THE PRESENT ASSESSMENT Y EAR AS WELL. THE SAME WAS NEVER DISPUTED BY THE LD. DR. THEREFORE, THE RE VENUES APPEAL IS DISMISSED. 9. IN RESULT, THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST, 2018 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 28/08/2018 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 11 ITA NO. 434/DEL/2016 DATE OF DICTATION 28.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 29.08.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 29 .08.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29.08.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER