ITO, New Delhi V. M/s Indian Golf Union, New Delhi

ITA 4348/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3658 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 03-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Charitable institution
• Section: 143(3); 12A; 11

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4348/DEL/2015 (ASSESSMENT YEAR: 2011 - 12 ) ITO, WARD - 2(3), NEW DELHI VS. INDIAN GOLF UNION, 24, FIRST FLOOR, ADHCHINI, NEW DELHI PAN:AAATT3232B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ATIQ AHMAD, SR. DR ASSESSEE BY: NONE DATE OF HEARING 09/11 / 2017 DATE OF PRONOUNCEMENT 3 1 / 01 / 201 8 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - 40(EXEMPTION), NEW DELHI DATED 21.01.2015 FOR THE AY 2011 - 12. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) HAS ERRED IN IGNORING THAT ASSESSEES ACTIVITY FALLS UNDER THE CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND THE LAST PROVISO TO SECTION 2(15) IS CLEAR LY APPLICABLE TO IT AS INCOME FROM SPONSORSHIP/ ROYALTY IS EXPLICITLY BUSINESS RECEIPT IN NATURE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN IGNORING THAT THE ACTIVITIES OF THE ASSESSEE IS COMMERCIAL IN NATURE AND FAILS UNDER THE LAST LIMB OF SECTION 2(15) THAT HIT BY THE PROVISO TO SECTION 2(15) AND ACCORDINGLY PROVISION OF SECTION 13(8) IS APPLICABLE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF LIFE MEMBERS SUBSCRIPTION WITHOUT DISCUSSING ANY FACTS IN THE ORDER. 3. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A SOCIETY ENGAGED IN ORGANIZING GOLD TOURNAMENT IN INDIA AND ABROAD FOR PROMOTION OF THE GAME OF GOLF. IT I S ALSO REGISTERED U/S 12A OF THE ACT. IT FILED ITS RETURN OF ITO VS. INDIAN GOLF UNION, ITA NO. 4348/DEL/2015 (ASSESSMENT YEAR: 2011 - 12) INCOME ON 17.11.2011 SHOWING NIL INCOME CLAIMING EXEMPTION U/S 11 AND 12 OF THE ACT FOR APPLICATION OF ITS INCOME. THE LD ASSESSING OFFICER NOTED THAT IT HAS RECEIVED ADVERTISEMENT, SPONSORSHIP A ND RENTAL INCOME WHICH ARE COMMERCIAL IN NATURE AND THEREFORE, ACCORDING TO HIM THE ASSESSEE IS DOING BUSINESS IN THE GUISE OF CHARITABLE ACTIVITY. HE THEREFORE, DENIED THE EXEMPTION U/S 11 AND 12 OF THE ACT AND DETERMINE TOTAL INCOME OF RS. 3420075/ - . HE FURTHER MADE AN ADDITION OF LIFE MEMBERSHIP SUBSCRIPTION OF RS. 2013500/ - WHICH IS DIRECTLY CREDITED TO THE BALANCE SHEET AS INCOME OF THE ASSESSEE. CONSEQUENTLY, ASSESSMENT U/S 143(3) OF THE ACT WAS PASSED ON 26.03.2014 AT TOTAL INCOME OF RS. 5433575/ - . T HE ASSESSEE AGGRIEVED WITH THE ORDER OF THE LD AO PREFERRED APPEAL BEFORE THE LD CIT(A) (EXEMPTION), WHO VIDE ORDER DATED 21.04.2015 ALLOWED THE CLAIM OF THE ASSESSEE RELYING ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN CASE OF INDIA TRADE PROMOTION ORGANIZATION VS. DGIT (EXEMPTION) 53 TAXMANN.COM 404 (DEL). 4. REVENUE AGGRIEVED WITH THE ORDER OF THE LD CIT(A)(EXEMPTION) PREFERRED APPEAL BEFORE US. 5. THE LD DR SUBMITTED THAT ASSESSEE IS CARRYING ON BUSINESS BY INVITING HUGE SPONSORSHIP AS WELL AS EARNING ADVERTISEMENT. HE FURTHER SUBMITTED THAT ASSESSEE IS CARRYING ON THE OBJECT OF GENERAL PUBLIC UTILITY AND THEREFORE, THE PROVISO TO SECTION 2(15) OF THE ACT APPLICABLE FROM ASSESSMENT YEAR 2009 - 10 APPLIES TO THE ASSESSEE. HE THEREFORE, SUBMITTED THAT THE O RDER OF THE LD CIT(A) DESERVES TO BE SET ASIDE. 6. DESPITE NOTICE NONE APPEA R ED ON BEHALF OF THE ASSESSEE, THEREFORE, THE ISSUE IS DECIDED ON MERITS AS PER MATERIAL AVAILABLE ON RECORD. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. ASSESSEE IS ENGAGED IN PROMOTION OF SPORTS OF GOLF AND REGISTERED U/S 12A OF THE ACT. DURING THE YEAR IT HAS RECEIVED CERTAIN ADVERTISEMENT SOUVENIR REVENUE AND SPONSORSHIP FEES HENCE, THE LD ASSESSING OFFICER HELD THAT THE ASSESSEE IS CARRYING ON THE ACTIVITIES OF BUSINESS A ND THEREFORE, IT LOSES EXEMPTION U/S 11 AND 12 OF THE ACT AS PER THE PROVISO TO SECTION 2(15) OF THE ACT. THE LD CIT(A) RELYING ON THE DECISION OF THE HON'BLE DELHI HIGH COURT HAS HELD THAT MERELY RECEIPT OF ADVERTISEMENT SOUVENIR DOES NOT SHOW THAT ITO VS. INDIAN GOLF UNION, ITA NO. 4348/DEL/2015 (ASSESSMENT YEAR: 2011 - 12) ASSESS EE IS CARRYING ON BUSINESS ACTIVITY. THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE COORDINATE BENCH IN 87 TAXMANN.COM 313 (MUM) IN DAHISAR SPORTS FOUNDATION VS. ITO RECENTLY, WHEREIN, IT HAS BEEN HELD THAT MERELY BECAUSE THE TRUST COLLECTED CERTAIN CHARGES F ROM COACHING CAMPS MEANT FOR PROMOTION OF SPORTS IN GAMES ONLY COULD NOT ALTER ITS CHARACTER OF BEING CHARITABLE IN NATURE. IN THE PRESENT CASE BEFORE US THE ASSESSEE HAS RECEIVED SPONSORSHIP FEES AS WELL AS SOUVENIR ADVERTISEMENT FOR THE PROMOTION OF GOLF , IT DOES NOT SHOW THAT THE ASSESSEE IS CARRYING ON ANY BUSINESS. IN VIEW OF THIS WE CONFIRM THE FINDING OF THE LD CIT(A) WHICH IS BASED ON THE DECISION OF THE HON'BLE DELHI HIGH COURT 53 TAXMANN.COM 404. IN THAT DECISION HON'BLE DELHI HIGH COURT HAS HELD THAT WHERE THERE IS NO DESIRE TO EARN ANY PROFIT BUT OBJECT OF PROMOTION TRADE AND COMMERCE NOT FOR ITSELF BUT FOR NATION IT WAS CLEARLY A CHARITABLE PURPOSES. IN VIEW OF THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/ 01/2018 . - SD/ - - SD/ - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31/ 01/2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI