Sanjo Charitable Society, Ghaziabad V. JCIT, Ghaziabad

ITA 4771/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6964 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 07-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 21-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: R K KALR A
• Keywords: Business income
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SRI G.D. AGARWAL, HONBLE V.P. AND SRI C.M. GARG, JM ITA NO. 4771/DEL./2015 : ASSTT. YEAR : 2010-11 SANJO CHARITABLE SOCIETY SANJO CMI BHAWAN, MARIAM NAGAR GHAZIABAD VS JCIT RANGE-2 GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. AABTS1772N ASSESSEE BY : SH. R.K.KALR A, CA REVENUE BY : SH. P. DAM KA NUNJNA, SR. DR DATE OF HEARING : 10.12.2015 DATE OF PRONOUNCEMENT : 19.02.2016 ORDER PER C.M.GARG, J.M. THIS APPEAL BY THE ASSESSEE HAS BEEN PREFERRED AGAI NST THE ORDER OF CIT(A), GHAZIABAD DATED 06.05.2015 PASSED IN APPEAL NO. 32/2013-14/GZB. 2. THE SOLE GROUND RAISED BY THE ASSESSEE-APPELLA NT READS AS FOLLOWS :- 1. THAT THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ORDER OF ASSESSING OFFICER TREATING SURPLUS ARISING FROM PROVIDING BUS FACILITY FOR COMING TO SCHOOL AND GOING BACK TO HOME TO THE STUDENTS OF THE SCHOOL AS BUSINESS INCOME WITHOUT A PPRECIATING THE FACTS AND MATERIAL AVAILABLE ON RECORDS. ITA NO. 4771/DEL/2015 SANJO CHARITABLE SOCIETY 2 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND C AREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD BEFO RE US. THE LD. AR CONTENDED THAT THE AUTHORITIES BELOW WERE NOT JU STIFIED IN HOLDING THAT THE SURPLUS FROM PROVIDING BUS FACILIT Y FOR COMING TO SCHOOL AND GOING BACK TO HOME TO THE STUDENTS OF TH E SCHOOL AS BUSINESS INCOME, WITHOUT PROPERTY APPRECIATING THE FACTS AND MATERIAL AVAILABLE ON RECORD PLACED BY THE ASSESSEE . 4. REPLYING TO THE ABOVE THE LD. DEPARTMENTAL REPRESENTATIVE (DR) CONTENDED THAT THE INCOME FROM BUS OPERATIONS IS A BUSINESS INCOME WHICH IS NOT ENTITLED EXEMPTIO N U/S 11(1), (2), (3) & (3A) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT.) THE LD. DR FURTHER CONTENDED THAT AS PER SUB SECTION (4A) O F SECTION 11 OF THE ACT SAID PROVISIONS OF SUB SECTION (1) TO (3A) OF SECTION 11 OF THE ACT DO NOT APPLY TO INCOME WHICH IS OF BUSINESS INCOME IN NATURE, HENCE, THE AO WAS QUITE CORRECT IN MAKING A DDITIONS IN THIS REGARD AND THE CIT(A) RIGHTLY UPHELD THE SAME. 5. THE LD. AR PLACING REJOINDER TO THE ABOVE CONTEN TIONS OF THE REVENUE, SUBMITTED THAT THE INCOME AROSE FROM B US FACILITIES PROVIDING ACTIVITIES IN AN INCIDENTAL TO THE ATTAIN MENT OF THE OBJECTIVES OF THE INSTITUTION OR SOCIETY HENCE, EXE MPTION U/S 11(1) OF THE ACT IS AVAILABLE FOR THE ASSESSEE SOCIETY AND T HUS AO MAY BE DIRECTED TO ALLOW THE SAME. 6. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS OF BOTH THE SIDES AT THE OUTSET, IT IS PERTINENT TO NO TE THAT AS PER SUB SECTION (4A) OF SECTION 11 OF THE ACT EARLIER SUB S ECTIONS (1) TO (3A) SHALL NOT APPLY IN RELATION TO ANY INCOME OF A TRUS T OR AN INSTITUTION, BEING PROFITS AND GAINS OF BUSINESS, UNLESS THE BUS INESS IS INCIDENTAL ITA NO. 4771/DEL/2015 SANJO CHARITABLE SOCIETY 3 TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST OR INSTITUTION. ADMITTEDLY AND UNDISPUTEDLY, THE PRESENT ASSESSEE S OCIETY IS RUNNING SCHOOL AND THE BUS FACILITY IS BEING PROVIDED TO TH E STUDENTS FOR COMING TO SCHOOL AND GOING BACK TO HOME WITHOUT ANY PROFIT MOTIVE ON REASONABLE CHARGES, AND THE SAME IS NOTHING BUT INCIDENTAL BUSINESS ACTIVITY WHICH OBVIOUSLY INCIDENTAL TO THE ATTAINMENT OF OBJECTIVES OF IMPARTING AND DISBURSING EDUCATION. I N THIS SITUATION, THE INCOME AROSE THEREFROM CAN NOT BE TREATED AS BU SINESS INCOME AND THE SAME QUALIFY THE EXCEPTIONAL SITUATION CARV ED OUT BY THE LEGISLATION IN THE SECOND LIMB OF SUB SECTION (4A) OF SECTION 11 OF THE ACT. 7. THUS, WE ARE INCLUDED TO HOLD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION OF TAX ON THE INCOME ACCRUED DURING T HE RELEVANT PERIOD FROM BUS FACILITY PROVIDING ACTIVITIES AND T HE AO WAS NOT CORRECT IN DISMISSING THE CLAIM OF THE ASSESSEE AND THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF THE AO IN THIS REGARD. ACCORDINGLY, SOLE GROUND OF THE ASSESSEE IS ALLOWED AND AO IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 19/02/2 016 SD/- SD/- ( G.D.AGARWAL ) (C.M.GARG) VICE PRESIDENT J UDICIAL MEMBER DATED:19 / 02/2016 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) ITA NO. 4771/DEL/2015 SANJO CHARITABLE SOCIETY 4 DATE INITIAL 1. DRAFT DICTATED ON 08.02.2016 2. DRAFT PLACED BEFORE AUTHOR 08.02.2016 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON 19.02.2016 PS 7. FILE SENT TO THE BENCH CLERK 19.02.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.