M/s Acharya Shri Tulsi Kalyan Kendra, Ludhiana V. Assistant Commissioner of Income Tax, Ludhiana

ITA 551/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8735 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 03-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: JASVINDER SINGH
• Keywords: Business income; Depreciation; Charitable institution
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 13

Judgement Text

ITA NO.551/ASR./2016 1 IN THE INCOME-TAX APPELLATE TRIBUNAL, (CIRCUIT BENCH AT JALANDHAR) BEFORE : SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 551(ASR.)/2016 ASST. YEAR: 2012-13 ACHARYA SHRI TULSI KALYAN KENDRA, VS. A.C.I.T., CI RCLE-II, 300, CHAURI SARAK, LUDHIANA. LUDHIANA. (PAN: AACTA0299B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. JASVINDER SINGH, ADVOCATE REVENUE BY : SMT. BALVINDER KAUR, D.R. DATE OF HEARING : 24.01.2017 DATE OF PRONOUNCEMENT : 28.02.2017 ORDER PER A.D. JAIN, JUDICIAL MEMBER: THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012- 13 AGAINST THE CIT(A)S ACTION IN UPHOLDING THE ACTION OF THE AO IN DENYING TO THE ASSESSEE DEPRECIATION AND OTHER EXPENSES CLAIME D AGAINST RENTAL INCOME FROM DHARAMSHALA AND TAXING THE RENTA L INCOME AS INCOME FROM HOUSE PROPERTY, AS AGAINST UNDER THE HEAD INCOME FROM OTHER SOURCES, AS CLAIMED. ITA NO.551/ASR./2016 2 2. THE FACTS ARE AS FOLLOWS. 3. THE ASSESSEE-SOCIETY IS ENGAGED IN VARIOUS CHARI TABLE ACTIVITIES. IN THE RETURN OF INCOME FILED, THE ASSE SSEE DECLARED LOSS OF RS.23,26,610/-. VIDE ORDER DATED 24.03.2015 PASS ED U/S. 143(3) OF THE INCOME-TAX ACT, THE AO ASSESSED THE INCOME O F THE ASSESSEE- SOCIETY AT RS.4,17,820/-. THE AO TOOK THE RENTAL IN COME DECLARED BY THE ASSESSEE AS INCOME FROM HOUSE PROPERTY AND TAXED IT AFTER ALLOWING MANDATORY DEDUCTION U/S. 24 OF THE ACT, AS THE ASSESSEE- TRUST WAS NOT FOUND TO BE REGISTERED U/S. 12/12AA O F THE ACT. 4. THE LD. CIT(A) CONFIRMED THE ASSESSMENT ORDER. 5. ON BEHALF OF THE ASSESSEE, IT HAS BEEN, INTER AL IA, STATED THAT THE ACTIVITIES OF THE ASSESSEE ARE MEANT FOR RELIGI OUS AND CHARITABLE PURPOSES, WITHOUT ANY MOTIVE OF EARNING PROFIT; THA T THE ASSESSEE HAD LET OUT ROOMS AND HALLS ALONGWITH AMENITIES SUC H AS AIR CONDITIONERS, BED SHEETS, BLANKETS, BATH TOWELS, CL EANING OF ROOMS AND TOILETS, ELECTRICITY CHARGES INCLUDED, MORNING TEA, ETC., AND THAT ITA NO.551/ASR./2016 3 THESE WERE LET OUT ON A DAILY BASIS AND NOT ON A PE RMANENT BASIS; AND THAT THE MOTIVE OF THE ASSESSEE IS NOT TO GIVE ITS HALLS OR ROOMS ON RENT TO ONE PERSON PERMANENTLY, BUT TO SERVE VAR IOUS PEOPLE OF THE SOCIETY, WITH ITS CHARITABLE SERVICES. 6. HAVING HEARD THE PARTIES AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE, AS NOTICED BY TH E AO AS WELL AS LD. CIT(A), WAS ENGAGED IN THE FOLLOWING ACTIVITIES : A. MANAGING THE HOMEOPATHY DISPENSARY FOR THE WELFARE OF THE GENERAL PUBLIC. B. HOLDING OF BLOOD DONATION CAMPS TO FACILITATE AND H ELP VARIOUS HOSPITALS IN THE AVAILABILITY OF BLOOD WITH THEM. C. HOLDING OF YOGA CLASSES FOR CHILDREN AND ELDERS. D. HOLDING OF VARIOUS HEALTH CARE CAMPS FOR GENERAL PUBLIC. E. THE HALL AND ROOMS MADE BY THE SOCIETY (DHARAMSHALA ) ARE GIVEN ON RENT TO GENERAL PUBLIC FOR HOLDING OF PUBLIC GATHERINGS AND STAYING IN THE BHAWAN AT NORM AL RATES. ITA NO.551/ASR./2016 4 7. IT REMAINS UNDISPUTED THAT THE RENTAL INCOME OF THE ASSESSEE IS COMING FROM ITS DHARAMSHALA, THE HALLS AND ROOMS OF WHICH ARE GIVEN ON RENT ON A DAILY BASIS, TO THE GENERAL PUBL IC AND NOT TO REGULAR TENANTS, FOR HOLDING OF PUBLIC GATHERINGS A ND STAYING, AT NOMINAL RATES. IT IS ALSO NOT UNDER CHALLENGE THAT THE ASSESSEE IS INCURRING CERTAIN EXPENSES ON THE MAINTENANCE OF TH E DHARAMSHALA/BHAWAN, INCLUDING ELECTRICITY EXPENSES, LIFT EXPENSES (LIFT HAS BEEN INSTALLED FOR USE BY THE OCCUPANTS O F ROOMS ON THE THIRD FLOOR) AND STAFF SALARIES FOR CLEANING AND MA INTAINING THE DHARAMSHALA, WHICH EXPENSES ARE MET OUT OF THE RENT RECEIVED. MEDICAL DISPENSARIES, YOGA CLASSES AND BLOOD DONATI ON CAMPS ARE HELD FOR THE GENERAL PUBLIC. ALL THESE ACTIVITIES O F THE ASSESSEE FALL UNDER OBJECT OF GENERAL PUBLIC UTILITY WITHIN THE MEANING OF SECTION 2(15) OF THE IT ACT. OBVIOUSLY, THE FIRST P ROVISO TO SECTION 2(15) DOES NOT GET ATTRACTED, SINCE THERE IS NO PRO FIT MOTIVE INVOLVED, MUCH LESS PROVED. MOREOVER, HOTELS AND BA NQUETS OPERATING WITH PROFIT MOTIVE, AS OPPOSED TO THE ASS ESSEE, ARE BEING ASSESSED UNDER THE HEAD OF BUSINESS INCOME AND AR E BEING ALLOWED ALL EXPENSES AND DEPRECIATION OUT OF THEIR INCOME. ITA NO.551/ASR./2016 5 8. FOR THE ABOVE DISCUSSION, THE GRIEVANCE OF THE A SSESSEE IS FOUND TO BE JUSTIFIED. IT IS ACCEPTED. THE RENT REC EIVED IS DIRECTED TO BE ASSESSED AS INCOME FROM OTHER SOURCES AND N OT AS INCOME FROM HOUSE PROPERTY, AS HAS BEEN DONE. ALL EXPENSE S INCLUDING DEPRECIATION ARE DIRECTED TO BE ALLOWED. 9. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2017. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.02.2017 *AKS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR