DDIT (E)II(1), MUMBAI V. THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL, MUMBAI

ITA 5143/MUM/2010

• Counselvise Citation: 514319914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 22-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIWAS RAO
• Assessee Lawyers: P P BHANDARI
• Keywords: Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.5143/MUM/2010 (ASSESSMENT YEAR: 2005-06) D DIT (E) - II(1) ROOM NO.509, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-12 VS. M/S. THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL DIAMOND PLAZA, 391-A, DR. DADASAHEB BHADAMKAH MARG, MUMBAI-400 004 PAN NO: AAATT 3202 H (APPELLANT) (RESPONDENT) ITA NO.5144/MUM/2010 (ASSESSMENT YEAR: 2006-07) DDIT (E) - II(1) ROOM NO.509, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-12 VS. M/S. THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL DIAMOND PLAZA, 391-A, DR. DADASAHEB BHADAMKAH MARG, MUMBAI-400 004 PAN NO: AAATT 3202 H (APPELLANT) (RESPONDENT) & ITA NO.5145/MUM/2010 (ASSESSMENT YEAR: 2007-2008) DDIT (E) - II(1) ROOM NO.509, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-12 VS. M/S. THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL DIAMOND PLAZA, 391-A, DR. DADASAHEB BHADAMKAH MARG, MUMBAI-400 004 PAN NO: AAATT 3202 H (APPELLANT) (RESPONDENT) ITA NO. : 5143 TO 5145/MUM/2010 M/S. THE GEM & JE WELLERY EXPORT PROMOTION COUNCIL 2 APPELLANT BY : SHRI GOLI SRINIWAS RAO RESPONDENT BY : SHRI P. P. BHANDARI DATE OF HEARING : 1 8 .08.2011 DATE OF PRONOUNCEMENT : 26. 08.2011 ORDER PER R. S. PADVEKAR, JM: IN THIS BATCH OF THREE APPEALS THE REVENUE HAS CHA LLENGED THE IMPUGNED ORDERS OF THE LD. CIT (A)-I, MUMBAI FOR TH E ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08 RESPECTIVELY. THE REVE NUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS WHICH ARE ALSO IDENTICA L IN OTHER APPEALS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LEARNED CIT (A), MUMBAI HAS ERRED IN HOLDI NG THAT THE ASSESSEES ACTIVITY OF HOLDING EXHIBITION IS INCIDE NTAL TO THE ATTAINMENT OF THE OBJECT OF THE COUNCIL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A), MUMBAI ERRED IN HOLDING T HAT THE ASSESSEE HAS MAINTAINED SEPARATE BOOKS OF ACCOUNTS FOR EXHIBITION ACTIVITY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A), MUMBAI ERRED IN HOLDING T HAT THE ASSESSEE HAS FULFILLED THE CONDITIONS AS LAID DOWN U/S.11(4A) OF THE I.T. ACT, 1961 AND IS THEREFORE, ENTITLED FOR E XEMPTION U/S.11 OF THE I.T. ACT, 1961. 2. BRIEFLY STATED FACTS OF THE CASE ARE AS UNDER. T HE ASSESSEE IS AN EXPORT PROMOTION COUNCIL PROMOTED BY THE MINISTRY OF COMMERCE AND IS ALSO INCORPORATED AS A COMPANY UNDER SECTION 25 OF THE COMPANIES ACT, 1956. THE ASSESSEE FILED ITS RETURN OF INCOME CLAIM ING EXEMPTION U/S.11 OF THE I.T. ACT, 1961, BUT THE SAME WAS DENIED. AS IN THE OPINION OF THE A.O., THE ASSESSES COUNCIL IS ORGANISING TRADE FAIRS WHI CH IS A DOMINANT ITA NO. : 5143 TO 5145/MUM/2010 M/S. THE GEM & JE WELLERY EXPORT PROMOTION COUNCIL 3 BUSINESS ACTIVITY. HENCE THE BENEFIT OF THE EXEMPTI ON WAS DENIED TO THE ASSESSEE. THE A.O. HELD THAT THE ACTIVITIES UNDERTA KEN BY THE ASSESSEES COUNCIL ARE NON CHARITABLE ACTIVITIES AND HENCE, NO BENEFIT OF THE EXEMPTION U/S.11 CAN BE GIVEN. THE ASSESSEE CHALLEN GED THE ACTION OF THE A.O. BEFORE THE LD. CIT (A) AND THE LD. CIT(A) FOLL OWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE HAS ALLOWED THE APP EAL AND DIRECTED THE A.O. TO GIVE THE BENEFIT OF EXEMPTION TO THE ASSESS EE U/S.11 OF THE ACT. 3. NOW THE REVENUE IS IN APPEAL BEFORE US IN ALL TH E THREE YEARS. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD S. THE LD. COUNSEL SUBMITS THAT NOW THE ISSUE OF EXEMPTION U/S.11 STAN DS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'B LE HIGH COURT OF BOMBAY IN ASSESSEES OWN CASE BEING DIT VS. M/S. GEM & JEW ELLERY EXPORT PROMOTION COUNCIL, ITA (LOD) NO. 1113 OF 2010. THE LD. COUNSEL ALSO FILED THE COPY OF THE JUDGEMENT OF HON'BLE HIGH COURT WHI CH IS PLACED ON RECORD. THE LD. CIT DR FAIRLY CONCEDED THAT THE ISS UE OF THE EXEMPTION U/S.11 IS NOW COVERED IN FAVOUR OF THE ASSESSEE AS SUBMITTED BY THE LD. COUNSEL. WE FIND THAT THE HON'BLE HIGH BOMBAY COURT HAS CONFIRMED THE ORDER OF THE TRIBUNAL IN ASSESSES OWN CASE. THE HO N'BLE HIGH COURT HAS FRAMED THE FOLLOWING TWO SUBSTANTIAL QUESTIONS OF L AW:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE A SSESSEE HAS FULFILLED THE CONDITIONS AS LAID DOWN U/S.11(4A) OF THE I.T. ACT, 1961 AND IS THEREFORE, ENTITLED FOR EXEMPTION U/S.1 1 OF THE I.T. ACT, 1961 ? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE TRIBUNAL WAS RIGHT IN DIRECTING THE AO T O SET OFF THE DEFICIT OF EARLIER YEARS TO THE SURPLUS OF THIS YEA R AND CONSIDER SUCH ADJUSTMENT AS APPLICATION OF INCOME FOR CHARIT ABLE PURPOSE? THE RELEVENT OPERATIVE PART OF THE JUDGEMENT IS AS UNDER:- ITA NO. : 5143 TO 5145/MUM/2010 M/S. THE GEM & JE WELLERY EXPORT PROMOTION COUNCIL 4 3. FROM THE ABOVE FINDING OF FACT AND IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX V/S. THANTHI TRUST REPOR TED IN 247 ITR 785, THE DECISION OF THE TRIBUNAL HOLDING THAT THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS OF SECTION 11(4A) OF THE INCOME TAX ACT CANNOT BE FAULTED. MOREOVER, THE TRIBUNAL H AS RECORDED FINDING OF FACT THAT THE ASSESSEE HAS MAINTAINED SE PARATE BOOKS OF ACCOUNT IN RESPECT OF EXHIBITION ACTIVITY. IN THIS VIEW OF THE MATTER, THE FIRST QUESTION RAISED BY THE REVENU E CANNOT BE ENTERTAINED. 4. AS REGARDS SECOND QUESTION IS CONCERNED, COUNSEL ON BOTH SIDES AGREE THAT THE SAID QUESTION IS COVERED AGAIN ST THE REVENUE BY THE DECISION OF THIS COURT IN THE CASE O F COMMISSIONER OF INCOME TAX V/S. INSTITUTE OF BANKIN G REPORTED IN [2003] 264 I.T.R. 110. IN THIS VIEW OF THE MATTE R, WE SEE NO MERIT IN THE APPEAL AND THE SAME IS DISMISSED WITH NO ORDER AS TO COSTS. 5. WE, THEREFORE, FIND NO INFIRMITY IN THE ORDERS O F THE LD. CIT (A) IN ALL THE THREE ASSESSMENT YEARS BEFORE US. WE RESPECTFUL LY FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN ASSESS EES OWN CASE VIZ. M/S. GEM & JEWELLERY EXPORT PROMOTION COUNCIL (SUPRA) CONFIRM THE ORDERS OF THE LD. CIT (A). 6. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED ON THIS 26 TH DAY OF AUGUST, 2011. SD/- SD/- ( PRAMOD KUMAR ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 26 TH AUGUST, 2011 ITA NO. : 5143 TO 5145/MUM/2010 M/S. THE GEM & JE WELLERY EXPORT PROMOTION COUNCIL 5 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, H- BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI