The Choice Foundation, Cochin V. The DCIT, Cochin

ITA 465/COCH/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7538 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 29-09-2016
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: K M JOSE
• Keywords: Business income; Depreciation
• Section: 10; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER I.T.A. NO S . 465 , 466 & 467 /COCH/201 6 ASSESSMENT YEAR S : 2009 - 10 TO 2011 - 12 THE CHOICE FOUNDATION, CHOICE HOUSE, P.V.SREEDHARAN ROAD, KUMBALAM, ERNAKULAM, KERALA-682506. [PAN: AAATC 1588P] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX(EXEM.), RANGE-4, KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI K.M. JOSE, CA REVENUE BY SHRI A. DHANARAJ, SR. DR DATE OF HEARING 12 / 0 1 / 201 7 DATE OF PRONOUNCEMENT 24 TH / / 0 1 /201 7 O R D E R PER GEORGE GEORGE K.,JUDICIAL MEMBER : THESE APPEALS, AT THE INSTANCE OF THE ASSESSEE, AR E DIRECTED AGAINST THREE SEPARATE ORDERS OF THE CIT(A)-III, KOCHI, ALL DATED 07/07/2016. THE RELEVANT ASSESSMENT YEARS ARE 2009-10 TO 2011-12. 2. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPE ALS, THEY WERE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDE R FOR THE SAKE OF CONVENIENCE AND BREVITY. I.T.A. NOS.465-467/COCH/2016 2 3. THE ISSUES INVOLVED IN THESE APPEALS ARE AS FOL LOWS: I.T.A. 465/COCH/2016 : AY 2009-10 CLAIM FOR DEPRECIATION. I.T.A. 466/COCH/2016 : AY 2010-11 1. ELIGIBILITY FOR ASSESSMENT OF THE INCOME OF JTPAC AND CFAC U/S. 11(1) OF THE INCOME TAX ACT, 1961. 2. CLAIM FOR DEPRECIATION. I.T.A. 467/COCH/2016 : AY 2011-12 1. ELIGIBILITY FOR ASSESSMENT OF THE INCOME OF JTPAC AND CFAC U/S. 11 (1) OF THE INCOME TAX ACT, 1961. 2. CLAIM FOR DEPRECIATION. 3.1. I SHALL TAKE FOR ADJUDICATION THE CLAIM OF DEPRECIATION WHICH IS A COMMON ISSUE FOR ALL THE THREE APPEALS. 4. CLAIM OF DEPRECIATION THE BRIEF FACTS OF THE ISSUE ARE AS FOLLOWS: FOR THE ASSESSMENT YEAR 2009-10 TO 2011-12, T HE ASSESSEE HAD CLAIMED DEPRECIATION. THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF DEPRECIATION FOR THE REASON THAT THE COST OF ASSET ON WHICH DEPRECIA TION CLAIMED WAS ALREADY ALLOWED AS APPLICATION OF INCOME AND ANY FURTHER AL LOWANCE FOR DEPRECIATION WAS UNWARRANTED. THE ASSESSING OFFICER RELIED ON THE D ICTUM LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LI SSIE MEDICAL INSTITUTION REPORTED IN 348 ITR 344 (KER). I.T.A. NOS.465-467/COCH/2016 3 4.1 ON FURTHER APPEAL, THE CIT (A) CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER. 4.2 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEPRECIATION, THOUGH THE COST OF ASSET WAS ALLOWED AS APPLICATION OF INCOME. THE LD. COUNSEL RELIED ON THE FOLLOWING JU DICIAL PRONOUNCEMENTS IN SUPPORT OF HIS CONTENTION:- 1. CIT VS. RAIPUR PALLOTTINE SOCIETY (1989) 180 ITR 57 9 (MP) 2. CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE (1984) 1 46 ITR 28 (KARN.) 3. CIT VS. MARKET COMMITTEE, PIPLI (2011) 330 ITR 16 ( P&H) 4. CIT VS. INSTITUTE OF BANKING (2003) 264 ITR 110 (BO M.) 5. DIT(E) VS. FRAMJEE CAWASJEE INSTITUTE (1993) 109 CTR 463 (BOM.) 6. CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BAVAN TRU ST (1992) 198 ITR 598 (GUJ.) 7. CIT VS. TINY TOTS EDUCATION SOCIETY (2011) 330 ITR 21 (P&H) 8. CIT VS. RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIE S (1982) 135 ITR 485 (MAD.) 4.3 THE LD. DR SUBMITTED THAT THE HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS (SUPRA) HAS CATEGORI CALLY HELD THAT THE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF DEPRECIATION WHEN THE COST OF THE ASSETS ARE ALLOWED AS APPLICATION OF INCOME. 4.4 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LI SSIE MEDICAL INSTITUTIONS (SUPRA) I.T.A. NOS.465-467/COCH/2016 4 HAS CATEGORICALLY HELD THAT WHEN THE COST OF ASSET IS TREATED AS APPLICATION OF INCOME, THE DEPRECIATION ON THE SAID ASSET CANNOT B E ALLOWED AS DEDUCTION SINCE IT WILL TANTAMOUNT TO DOUBLE DEDUCTION. FOLLOWING T HE DICTUM LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LI SSIE MEDICAL INSTITUTIONS (SUPRA), I HOLD THAT THE ORDER OF THE CIT(A) IS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. IT IS ORDERED ACCORDIN GLY. 5. ELIGIBILITY FOR ASSESSMENT OF THE INCOME OF JTP AC AND CFAC U/S. 11(1) OF THE INCOME TAX ACT, 1961. THE ABOVE ISSUE ARISES FOR MY CONSIDERATION FOR THE AYS 2010-11 AND AY 2011-12. 5.1 THE BRIEF FACTS OF THE ISSUE ARE AS FOLLOWS: THE ASSESSEE HAS AN AUDITORIUM JT.PAC W HERE STAGING/CONDUCTING MUSICAL PERFORMANCES WERE CONDUCTED FOR A FEE WHICH WAS TREATED BY THE ASSESSEE AS EDUCATIONAL ACTIVITY. HOWEVER, IT WAS THE CASE OF THE ASSESSING OFFICER THAT IT WAS AN ACTIVITY CONDUCTING VARIOUS MUSIC/ART PROGRAMMES AND PERFORMANCES BY COMMERCIAL ARTISTS WHICH THE ASSESS EE STAGED IN ITS AUDITORIUM FOR A FEE. THE ASSESSEE, ACCORDING TO THE AO, ALSO COLLECTED YEARLY SUBSCRIPTION FROM THOSE PERSONS WHO WISHED TO ATTEND THOSE PROGR AMMES THROUGHOUT THE YEAR. THERE WAS ALSO NOMENCLATURE OF SPONSORSHIP, HOWEVER, THERE WAS NO SUCH SPONSORSHIP, BUT, IT WAS AMOUNT OF TICKETS PAID IN ADVANCE FOR ONE YEAR TO ATTEND I.T.A. NOS.465-467/COCH/2016 5 THE MUSICAL EXTRAVAGANZA. IT WAS THE STAND OF THE AO THAT THE ACTIVITY OF THE ASSESSEE CANNOT BE TREATED AS EDUCATION AS IT HAD C OMMERCIAL DIMENSIONS AND, THUS, DID NOT FIT THE MOULD OF RELIEF TO POOR, MED ICAL RELIEF OR EDUCATION. AFTER HAVING CONSIDERED THE EXPLANATION OFFERED BY THE AS SESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS DETAILED IN HIS ASSESSMEN T ORDERS, THE AO WAS OF THE VIEW THAT 6.13. AS THIS ACTIVITY OF JT.PAC (AUDITORIUM) IS TR EATED TO BE AN ACTIVITY FALLING UNDER THE FOURTH LIMB OF SEC. 2(15), I.E., GENERAL PUBLIC UTILITY, THE PROVISIONS OF SECTION 13(8) WILL APPLY WHICH STATES THAT NOTHING CONTAINED IN SECTION 11 OR 12 SHALL OPERATE SO AS TO EXCLUDE ANY INCOME FROM THE TOTAL INCOME OF PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF. IF THE PROVISIONS OF THE FIRST PROVISO TO CLAUSE 15 OF SEC. 2 BECOME APPLICABLE IN THE CASE OF SUCH PERSONS IN THE SAID PREVIOUS YEAR. A CCORDINGLY, THE ACTIVITY OF THE JT.PAC WAS TREATED AS GENERAL PUBLIC UTILITY. CAFC (SIC) CFAC: 7. ASSESSEE IS HAVING SWIMMING POOL, BADMINTON C OURT AND OTHER FACILITIES UNDER THE CAFC. THE ASSESSEE HAS CLAIMED IT FOR TH E BENEFIT OF STUDENTS AND PART OF CHOICE FOUNDATION. HOWEVER, FROM THE D ETAILS CALLED FOR AND VERIFIED IT IS SEEN THAT CAFC IS ALLOWING EVEN OUTS IDERS TO UTILIZE ITS FACILITIES ON PAYMENT OF FEES. THIS ACTIVITY ALSO CLEARLY FAL LS UNDER THE FOURTH LIMB OF SEC. 2(15) I.E., GENERAL PUBLIC UTILITY, THE PROVIS IONS OF SECTION 13(8) WILL APPLY. I.T.A. NOS.465-467/COCH/2016 6 5.2 AGGRIEVED, THE ASSESSEE TOOK UP THE ISSUE, AMON G OTHERS, FOR BOTH THE AYS UNDER CONSIDERATION BEFORE THE CIT (A) FOR CONS IDERATION. AFTER HAVING CONSIDERED THE ARGUMENTS PUT-FORTH BY THE ASSESSEE S COUNSEL AS WELL AS THE REASONING OF THE AO IN DENYING THE EXEMPTION U/S 11 AS CLAIMED BY THE ASSESSEE BY INVOKING THE PROVISIONS OF S. 2(15) OF THE ACT A ND ALSO EXTENSIVELY QUOTING THE PROVISIONS OF S. 2 (15 ) OF THE ACT, THE CIT (A) H AD, IN HIS IMPUGNED ORDER UNDER CONSIDERATION, HELD THAT THE ASSESSEE WAS NOT COVER ED BY FIST (SIC) FIRST PROVISO TO S. 2 (15) OF THE ACT. FOR APPRECIATION OF FACTS, T HE RELEVANT PORTIONS OF HIS REASONING ARE REPRODUCED AS UNDER: 14..IT IS ALSO OBSERVED THAT THE APPELLANT H AS NOT MAINTAINED SEPARATE BOOKS OF ACCOUNTS FOR THE BUSIN ESS ACTIVITIES CARRIED ON IN THE NAME OF JT PAC. AS PER THE PROVISIONS OF SUB-SECTION 4(A) OF SECTION 11 AMENDED WITH EFFECT FROM 01.04.1992 ALL THAT IS REQUIRED FOR THE BUSINESS INCOME OF THE TRUST/INSTITUTIONS TO BE EXEMPT FROM TAX IS THAT THE BUSINESS SHOULD BE INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVE OF THE TRUST/INSTITUTIONS IN RESPECT OF BUSINESS AS WELL A S CHARITABLE ACTIVITIES. SINCE THE APPELLANT DID NOT FULFILL THE CONDITIONS LAID DOWN IN SECTION 11(4A) OF THE IT ACT, THE INCOME DERIVED FROM THE A CTIVITIES OF JTPAC IS NOT ENTITLED TO EXEMPTION U/S 11 OF THE IT ACT. 15. THE APPELLANT IS ALSO HAS CONSTRUCTED A SWIMMIN G POOL, BADMINTON COURT AND OTHER FACILITIES UNDER THE NAME CAFC AND CLAIMED EXEMPTION U/S 11 FOR THE INCOME EARNED OUT OF THESE ACTIVITIE S. THE ASSESSING OFFICER IN THE IMPUGNED ORDER HAS DENIED EXEMPTION U/S 11 FOR THIS INCOME BY TREATING THESE ACTIVITIES AS BUSINESS ACT IVITIES SINCE THE APPELLANT WAS PERMITTING OUTSIDERS TO UTILIZE THESE FACILITIES ON PAYMENT OF FEES. THE ASSESSING OFFICER HAS ALSO STATED THA T THESE ACTIVITIES FALLS UNDER THE FOURTH LIMB OF SECTION 2(15) OF THE IT AC T I.E., ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. 16. I HAVE CONSIDERED THIS ISSUE. SIMILAR ISSUE HA S ALREADY BEEN DISCUSSED IN DETAIL IN PARA 10 AND 11 OF THIS ORDER AND THE SAME IS SQUARELY APPLICABLE TO THE ACTIVITIES OF CAFC ALSO. THEREFORE, IT IS HELD I.T.A. NOS.465-467/COCH/2016 7 THAT THE ACTIVITIES OF CAFC ARE ALSO NOT COVERED BY THE FIRST PROVISO TO SECTION 2(15) OF THE IT ACT. HOWEVER, I AGREE WITH THE VIEWS OF THE ASSESSING OFFICER THAT THE ACTIVITIES OF CAFC HAS T O BE TREATED ON\LY AS COMMERCIAL ACTIVITIES. IT IS ALSO HELD THAT SINCE THE APPELLANT DID NOT FULFILL THE CONDITIONS LAID DOWN IN SECTION 11 (4A) OF THE IT ACT, THE INCOME DERIVED FROM THE ACTIVITIES OF CAFC IS ALSO NOT ENTITLED TO EXEMPTION U/S 11 OF THE IT ACT. 17. IN THE ABOVE CIRCUMSTANCES, IT IS HELD THAT EX CEPT THE INCOME EARNED FROM THE ACTIVITIES OF JTPAC AND CAFC, THE REST OF THE INCOME EARNED BY THE APPELLANT IS ELIGIBLE FOR EXEMPTION UNDER SE CTION 11 OF THE IT ACT. THE INCOME EARNED FROM THE ACTIVITIES OF JTPAC AND CAFC ARE BUSINESS INCOME AND SQUARELY COVERED BY THE PROVISI ONS OF SECTION 11(4A) AND, THEREFORE, NOT ENTITLED TO EXEMPTION U/ S 11 OF THE IT ACT. I HEREBY DIRECT THE ASSESSING OFFICER TO RE-COMPUTE T HE TOTAL INCOME OF THE APPELLANT ACCORDINGLY. 5.3 AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL WITH THE PRESENT APPEALS FOR THE ASSESSMENT YEARS 2010-11 AND 2011-1 2. DURING THE COURSE OF HEARING, THE ELABORATE SUBMISSIONS MADE BY THE LEAR NED COUNSEL FOR THE ASSESSEE ARE SUMMARIZED AS UNDER: - THAT THE PREDOMINANT ACTIVITY OF THE ASSESSEE WAS O NLY EDUCATION AND THE AUDITORIUM OF THE SCHOOL WAS USED DURING TH E YEAR PREDOMINANTLY FOR THE SCHOOL FUNCTIONS CATERING TO OVER 2500 STUDENTS, 200 TEACHERS AND OTHER STAFF; AND THAT DU RING THE SCHOOL HOLIDAYS ONLY THE AUDITORIUM WAS ALLOWED TO BE USED FOR A TOTAL 36 AND 21 EVENINGS FOR THE YEARS-ENDED 31.3.2010 AND 3 1.03.2011 RESPECTIVELY FOR SOME PROGRAMMES ATTENDED BY THE GE NERAL PUBLIC; - THAT THE TOTAL RECEIPTS OF REVENUE OF THE ASSESSEE OF RS.12.96 CRORES AND RS.14.64 CRORES FOR THE YEARS-ENDED 31.3 .2010 AND 31.3.2011 AND THAT ONLY RS.46.41 LAKHS AND RS.1.18 CRORES WERE DERIVED FROM CONDUCTING OF PROGRAMMES AT JTPAC WHIC H WERE AT 3.58% AND 8.08% [OF ITS TOTAL REVENUE] RESPECTIVELY CANNOT DETERMINE THE OBJECT OF THE ASSESSEE AS COMMERCIAL IN NATURE; - THAT JTPAC WAS THE AUDITORIUM PRIMARILY MEANT FOR T HE ACTIVITIES OF THE SCHOOL IN CONNECTION WITH SCHOOL ASSEMBLIES, DRAMAS, MUSIC AND OTHER PROGRAMMES. SIMILARLY, CFAC WAS FOR THE INDOOR SPORTS AND GAMES FOR THE SCHOOL AND, THEREFORE, AN INTEGRA L PART OF THE SCHOOL AND THE EDUCATION IMPARTED THEREIN; I.T.A. NOS.465-467/COCH/2016 8 - THAT ADDITIONAL REVENUE EARNED BY THE ASSESSEE WAS AN INCOME ASSESSABLE U/S 11(1) AND NOT U/S 11(4A) SINCE SUCH INCOME WAS ARISING OUT OF AN INCIDENTAL ACTIVITY FOR THE ATTAINMENT OF THE OBJECTS OF THE ASSESSEE TRUST; CFAC: - THAT THE PHYSICAL EDUCATION FORMS AN INTEGRAL PART OF AN EDUCATIONAL INSTITUTION AND FOR THIS PURPOSE THAT C FAC HAS BEEN CONCEIVED AND IMPLEMENTED; - THAT CFAC INCLUDES A FULL-FLEDGED GYMNASIUM FACILIT Y, AMONG OTHERS, FOR THE STUDENTS AND THE ADULTS AS WELL; AN D THAT THE ABOVE FACILITIES WERE MADE AVAILABLE TO ALL THE STU DENTS AND IT WAS ONLY DURING THE NON-SCHOOL HOURS THAT SOME OF THE P ERSONS IN THE NEIGHBOUR-HOOD WERE ALLOWED TO AVAIL THE FACILITIES IN CFAC; - THAT THE CIT (A) WAS ERRED IN STATING THAT NO SEPAR ATE BOOKS OF ACCOUNT WAS MAINTAINED BY THE ASSESSEE WHEREAS THE ASSESSEE HAD, IN FACT, MAINTAINED, SEPARATE BOOKS OF ACCOUNT FOR THE SCHOOL, JT PAC AND CFAC. 5.3.1 IN CONCLUSION, IT WAS PLEADED THAT SINCE JT PAC AUDITORIUM AND CFAC PHYSICAL EDUCATION FACILITY WERE MEANT PRIMARI LY FOR THE STUDENTS OF THE SCHOOL IN CARRYING ON ITS CHARITABLE OBJECT OF EDUCATION AND ANY INCIDENTAL INCOME WHICH WAS EARNED FROM THE OUTSIDE RS DID NOT AMOUNT TO CARRYING ON OF ANY BUSINESS THEREBY ATTRACTING THE PROVISIONS OF S 4 AND (4A) OF THE ACT, SUCH INCOME SHOULD HAVE BEEN ASSESSED U /S 11(1) OF THE ACT 5.4. ON THE OTHER HAND, THE LEARNED D R SUBMITTED THAT SINCE THE ASSESSEE HAD ALLOWED JTPAC/CAFC FOR OUTSIDERS/PUBLI C TO CONDUCT PROGRAMMES SUCH AS ROCK BAND, BEATLE MANIA, OSIBISA , MUSICAL PROGRAMMES, DRAMAS, KATHAKALI ETC, FOR A FEE, AS RI GHTLY POINTED OUT BY THE CIT (A), SUCH FEE (INCOME) WAS SQUARELY COVERED BY THE PROVISIONS OF S. I.T.A. NOS.465-467/COCH/2016 9 11(4A) OF THE ACT. THEREFORE, THE LEARNED DR PLEAD ED THAT THE STAND OF THE CIT (A) - THAT THE INCOME EARNED FROM THE ACTIVITIE S OF JTPAC AND CAFC WERE BUSINESS INCOME WHICH WAS SQUARELY COVERED BY THE PROVISIONS OF S. 11(4A) OF THE ACT - REQUIRES TO BE SUSTAINED. 5.5 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS, PERUSED THE RELEVANT MATERIALS ON RECORD AND ALSO THE PAPER BOO K FURNISHED BY THE ASSESSEES COUNSEL DURING THE COURSE OF APPEAL PROC EEDING BEFORE ME. 5.5.1 IT IS AN ADMITTED FACT THAT THE ASSESSEE-TR UST WAS PRIMARILY ENGAGED IN PROVIDING EDUCATION AND THAT THE AUDITOR IUM OF THE SCHOOL [JTPAC] WAS UTILIZED, DURING THE YEARS UNDER DISPUT E, FOR THE SCHOOL FUNCTIONS CATERING TO THE STUDENTS. ADMITTEDLY, TH E AUDITORIUM AND CFAC WERE ALLOWED TO BE USED BY THE OUTSIDERS SPARELY, T HAT IS TO SAY, FOR 36 AND 21 EVENINGS DURING THE YEARS-ENDED 2010-11 AND 2011 .12 RESPECTIVELY. ANOTHER SALIENT FEATURE WHICH I HAVE NOTICED THAT JTPAC WAS ALLOWED TO BE USED BY THE OUTSIDERS ONLY IN THE EVENINGS WELL A FTER THE SCHOOL TIMINGS - THEREBY THE PREDOMINANT ACTIVITY OF THE ASSESSEE WA S, OBVIOUSLY, EDUCATION. THE TOTAL REVENUE RECEIPTS OF THE ASSESSEE FOR THE PERIODS UNDER DISPUTE WERE, ADMITTEDLY, AMOUNTING TO RS12.96 CRORES AND R S.14.64 CRORES WHEREAS THE INCOME FOR LETTING OUT JT PAC/CFAC WERE PARTIALLY RS.46.41 LAKHS AND RS1.18 CRORES WHICH WORKED OUT TO 3.58% A ND 8.08% I.T.A. NOS.465-467/COCH/2016 10 RESPECTIVELY WHEN COMPARED TO ITS TOTAL RECEIPTS OF RS.12.96 AND RS.14.64 CRORES. THIS EXPLICITLY SHOWS THAT THE INCOME EAR NED OUT OF JTPAC AND CFAC WAS ARISING OUT OF INCIDENTAL ACTIVITY OF THE ASSESSEE TRUST. THE CIT (A), IN HIS IMPUGNED ORDER, HAS STATED THAT [A T THE COST OF REPETITION] 14 IT IS ALSO OBSERVED THAT THE APPELLANT HAS NOT MAI NTAINED SEPARATE BOOKS OF ACCOUNTS FOR THE BUSINESS ACTIVITIES CARRI ED ON IN THE NAME OF JT PAC. AS PER THE PROVISIONS OF SUB-SECTION 4(A) OF S ECTION 11 AMENDED WITH EFFECT FROM 01.04.1992 ALL THAT IS REQUIRED FOR THE BUSINESS INCOME OF THE TRUST/INSTITUTIONS TO BE EXEMPT FROM TAX IS THAT TH E BUSINESS SHOULD BE INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVE OF TH E TRUST/INSTITUTIONS AND THAT SEPARATE BOOKS OF ACCOUNTS ARE MAINTAINED BY S UCH TRUST OR INSTITUTIONS IN RESPECT OF BUSINESS ASS WELL AS CHARITABLE ACTIV ITIES. SINCE THE APPELLANT DID NOT FULFILL THE CONDITIONS LAID DOWN IN SECTION 11(4A) OF THE IT ACT, THE INCOME DERIVED FROM THE ACTIVITIES OF JTPAC IS NOT ENTITLED TO EXEMPTION U/S 11 OF THE IT ACT. HOWEVER, DURING THE COURSE OF HEARING BEFORE ME, THE LEARNED COUNSEL FOR THE ASSESSEE HAD EMPHATICALLY C ONTESTED THE CIT (A)S ABOVE AVERMENTS BY DRAWING MY ATTENTION TO THE FACT THAT THE ASSESSEE HAD FOR INTERNAL MIS PURPOSE MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR THE SCHOOL, JTPAC AND CFAC ETC, TO SUBSTANTIATE HIS C LAIM, THE COUNSEL HAD FURNISHED A PAPER BOOK WHICH CONTAINED, AMONG OTHER S, COPIES OF THE AUDITED STATEMENTS OF ACCOUNTS FOR THE YEARS-ENDED 31.03.2010 AND 31.03.2011 RESPECTIVELY [REFER: PAGES 13 32 AND 3 3 56 OF PB]. I.T.A. NOS.465-467/COCH/2016 11 5.5.2 TAKING INTO ACCOUNT THE RELEVANT FACTS AND CIRCUMSTANCES OF THE ISSUE AS DELIBERATED UPON IN THE FORE-GOING PARAGRA PHS AND ALSO OF THE FACT THAT THE INCOME DERIVED FROM CONDUCT OF PROGRAMMES WAS ONLY AT 3.58% AND 8.08% OF ITS TOTAL RECEIPTS (OF REVENUE) FOR TH E YEARS ENDED 31.03.2010 AND 31.03.2011 RESPECTIVELY WHICH WAS NOTHING BUT I NCIDENTAL, I AM OF THE VIEW THAT THE ACTIVITIES OF JTPAC AND CFAC CANNOT B E TERMED AS COMMERCIAL DIMENSIONS AS VOUCHED BY THE AUTHORITIES BELOW IN T HEIR IMPUGNED ORDERS. IN ESSENCE, THE INCOME DERIVED FROM SUCH ACTIVITIES WAS NOTHING BUT AN INCIDENTAL. THEREFORE, THE INCOMES EARNED BY THE ASSESSEE FO R THE AYS 2010-11 AND 2011-12 FROM THE ACTIVITIES OF JTP AC AND CAFC WERE ENTITLED FOR EXEMPTION U/S 11(1) OF THE ACT. IT IS ORDERED ACCORDINGLY. 6. IN THE RESULT: (I) THE APPEAL OF THE ASSESSEE FOR THE AY 2009-10 IS DISMISSED ; (II)THE APPEALS OF THE ASSESSEE FOR THE AYS 2010-11 AND 2011-12 ARE PARTLY ALLOWED . PRONOUNCED IN THE OPEN COURT ON 24 TH -01-2017. SD/- (GEORGE GEORGE K.) JUDICIAL MEMBER PLACE: KOCHI DATED: 24 TH JANUARY, 2017 I.T.A. NOS.465-467/COCH/2016 12 GJ COPY TO: 1. THE CHOICE FOUNDATION, CHOICE HOUSE, P.V. SREEDH ARAN ROAD, KUMBALAM, ERNAKULAM, KERALA-682506. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX (EXEM.), RA NGE-4, KOCHI. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-III, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX (EXEMPTION), KOCHI . 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T., COCHIN