THE ADVERTISING CLUB BOMBAY, MUMBAI V. ADIT (E) -II(2), MUMBAI

ITA 5531/MUM/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9890 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAVLD
• Assessee Lawyers: HIRO RAI LD AR
• Keywords: Business income; Charitable institution; Source of fund
• Section: 143(3); 12A; 11

Judgement Text

ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. NO.5531/MUM/2015 ( ASSESSMENT YEAR:2010-11) THE ADVERTISING CLUB BOMBAY 504,RADHE VALLABH SOCIETY FRENCH BRIDGE CORNER, OPERA HOUSE MUMBAI-400 004 VS. ASSISTANT DIRECTOR OF INCOME TAX (EXEMPTION)-II (2) 5 TH FLOOR, PIRAMAL CHAMBERS LALBUGH, PAREL, MUMBAI-400 004 !' # PAN/GIR NO.AAATA-8602-J ( '$ APPELLANT ) : ( %'$ RESPONDENT ) REVENUE BY : RAJESH KUMAR YADAV, LD.DR ASSESSEE BY : HIRO RAI, LD.AR &' DATE OF HEARING : 10/07/2018 ()*' / DATE OF PRONOUNCEMENT : 26/09/2018 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [A Y] 2010-11 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-1 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-I/IT/E-2 (56)/2013-14 DATED 14/09/2015. THE ORIGINAL GROUNDS AS WELL AS ADDITI ONAL GROUNDS FILED ON 28/03/2018 AS URGED BEFORE US READS AS UNDER:- 2 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 1. THE LEARNED CIT (APPEALS)-1 WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE LEARNED ADIT DENYING THE EXEMPTION U/S 11 OF THE AC T TO THE APPELLANT. HE HAS ERRED IN HOLDING THAT THE PROVISO TO SECTION 2(15) WAS APPLICABLE TO THE CASE OF THE APPELLANT. THE REASONS GIVEN BOTH BY THE LEARNED CI T (APPEALS) AND THE LEARNED ADIT IN THIS REGARD, PARTICULARLY THEIR READING OF THE PROVISO TO SECTION 2(15), ARE INCORRECT AND UNJUSTIFIED. 2. THE LEARNED ASSESSING OFFICER AND THE LEARNED CI T (APPEALS) SHOULD HAVE REDUCED THE INCOME OF THE APPELLANT BY RS.78,85,845 /- ALREADY TAXED IN THE AY 2009-10. AS EVIDENT FROM GROUNDS OF APPEAL, THE ASSESSEE IS PRIMARILY AGGRIEVED BY DENIAL OF EXEMPTION U/S 11. THE ASSESSMENT FOR IMPU GNED AY WAS FRAMED BY LD. ASSISTANT DIRECTOR OF INCOME TAX (E) II(2), MU MBAI U/S 143(3) OF THE INCOME TAX ACT,1961 ON 28/03/2013 WHEREIN THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT RS.82.34 LACS AFTER DENIAL OF EXEMPTION U/S 11 AS AGAINST NIL RETURN FILED BY THE ASSESSEE ON 29/09/2010 ALONG WI TH INCOME & EXPENDITURE ACCOUNT, BALANCE SHEET AND AUDIT REPORT IN FORM NO. 10B. THE ASSESSEE HAS BEEN ASSESSED AS AN ASSOCIATION OF PERSON (TRUST) AND IS AN ENTITY DULY REGISTERED U/S 12A WITH EFFECT FR OM 01/04/1990 VIDE CERTIFICATE DATED 14/01/2000, A COPY OF WHICH HAS B EEN PLACED ON RECORD. 2. THE ROOT OF DENIAL OF DEDUCTION U/S 11 LIES IN T HE FACT THAT THE ACTIVITIES OF THE ASSESSEE TRUST CARRIED OUT DURING IMPUGNED A Y, IN THE OPINION OF, LD. AO CONSTITUTED BUSINESS ACTIVITY IN TERMS OF PROVIS O TO SECTION 2(15) AND 11(4) OF THE INCOME TAX ACT, 1961. THE ASSESSEE DEF ENDED THE SAME VIDE REPLY DATED 11/03/2013, INTER-ALIA, BY SUBMITTING THAT VARIOUS PROGRAMS/ACTIVITIES BEING CARRIED OUT BY THE ASSESS EE COULD NOT BE CONSIDERED AS BUSINESS ACTIVITIES BUT WERE INCIDENT AL TO THE ATTAINMENT OF THE OBJECTIVES FOR THE ASSESSEE TRUST. HOWEVER, NOT CONVINCED, LD. AO, 3 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 RELYING ON THE DECISION OF THIS TRIBUNAL FOR AY 197 8-79 IN ASSESSEES OWN CASE, HELD THAT IT WAS MUTUAL CONCERN AND THEREFORE , SUBSCRIPTION AND ENTRANCE FEES WERE EXEMPT ON THE DOCTRINE OF MUTUAL ITY WHEREAS OTHER MISCELLANEOUS RECEIPTS WERE CHARGEABLE TO TAX. RESU LTANTLY, THE SURPLUS OF RS.82.34 LACS AS REFLECTED IN THE INCOME AND EXPENDITURE ACCOUNT WAS ASSESSED AS BUSINESS INCOME IN THE HANDS OF THE ASSESSEE. 3. AGGRIEVED THE ASSESSEE CONTESTED THE SAME WITHOU T ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 14/09/2 015 AND REITERATED THE CONTENTIONS THAT THE ACTIVITIES WERE WITHIN THE OVE RALL OBJECTIVES OF THE TRUST SINCE THE PROGRAMS / AWARD FUNCTIONS BEING CARRIED OUT BY THE ASSESSEE WERE WITH A VIEW TO RECOGNIZE AND ENCOURAGE TALENTS IN THE FIELD OF ADVERTISING. FURTHER, THE SURPLUS BEING GENERATED O UT OF THE SAID ACTIVITIES WAS PLOUGHED BACK IN FURTHERANCE OF TRUSTS OBJECTS . RELIANCE WAS PLACED ON CERTAIN JUDICIAL PRONOUNCEMENTS. IT WAS POINTED OUT THAT THE DECISION OF THE TRIBUNAL AS RELIED UPON BY LD. AO COULD NOT BE APPLIED SINCE SUBSEQUENT TO THE SAID DECISION, THE TRUST OBTAINED REGISTRATION U/S 12A AND THE CLAIM WAS TO BE EXAMINED AT THE REALM OF THE ST ATUTORY PROVISIONS AS CONTAINED U/S 11 & 12. HOWEVER, NOT CONVINCED, LD. CIT(A) UPHELD THE STAND OF LD. AO BY OBSERVING AS UNDER:- 5.2 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES O F THE CASE, GONE THROUGH THE ASSESSMENT ORDER OF THE A.O AND THE SUBMISSIONS OF THE APPELLA NT AND ALSO DISCUSSED THE CASE WITH THE AR OF THE APPELLANT. THE CONTENTIONS AND SUBMISSIONS O F THE APPELLANT ARE BEING DISCUSSED AND DECIDED HEREIN IN UNDER: I. THE APPELLANT CONTENDED THAT IN ITS OPINION THER E IS NO ELEMENT OF BUSINESS NATURE IN ANY ACTIVITIES CARRIED OUT BY IT AND HENCE, PROVISIONS OF SECTION 11(4A) OR PROVISO TO SECTION 2(15) ARE NOT APPLICABLE. IN THIS REGARD IT IS CLARIFIED THAT THE ASSESSMENT YEAR BEING 2010-11, THE PROVISO TO SECTION 2(15) IS RELEVANT FOR THIS YEAR. ACCORDI NGLY, ON PERUSAL OF THE INCOME AND EXPENDITURE 4 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 ACCOUNT AND THE BALANCE SHEET RILED BY THE APPELLAN T FOR THE YEAR UNDER CONSIDERATION IT WAS NOTED THAT DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS ORGANIZED AWARD FUNCTIONS BEING ABBY AWARDS, EFFIE AWARDS, EMVIE AWARDS AND Y OUNG ACHIEVER AWARDS. IN ADDITION, CERTAIN OTHER PROGRAMMES HAVE ALSO BEEN ORGANIZED. THE APPELLANT WAS ASKED TO GIVE DETAILS OF THE ITS ACTIVITIES INCLUDING THE RECEIPT AND EXPEND ITURE. WITH REFERENCE TO THESE DETAILS FILED REGARDING EFFIE AWARDS, IT IS NOTED THAT THE TOTAL RECEIPTS OF RS. 77,14,700/- FROM THIS ACTIVITY INCLUDE THE SPONSORSHIP INCOME WHICH INCLUDES RS. 1 2.50 LAKHS FROM MARICO LTD. RS. 6 LAKHS FROM BENNETT COLMAN LTD. AND PS. 25 LAKHS FROM YAHO O INDIA. AGAINST THIS, THE EXPENDITURE OF RS. 31.5 LAKHS HAS BEEN MADE ON EVENT MANAGEMENT FE ES, RS. 11.19 LAKHS FOR SUPPLY OF FOOD AND RS. 7.06 LAKHS FOR LAWN BOOKING. SIMILARLY, IN CASE OF ENVIE AWARDS, THE SPONSORSHIP INCOME OF RS. 35 LAKHS INCLUDE RS, 10 LAKHS FROM AN KIT ADVERTISING, RS. 5 LAKHS FROM RASIK PUBLICITY, RS. 10 LAKHS FROM MAHESH ADVERTISING AND RS. 5 LAKHS EACH FROM B.Y PADHYE PUBLICITY AND CONCEPT COMMUNICATIONS. AGAINST THIS, THE EXPENDITURE INCURRED INCLUDES RS.23.24 LAKHS FOR EVENT MANAGEMENT, RS. 19.25 LAKH S FOR BALL ROOM BOOKING, DINNER ETC. AGAINST THE RECEIPT OF RS. 21.30 LAKHS FOR ORGANIZI NG YOUNG ACHIEVER AWARD, THE SPONSORSHIP INCOME IS RS. 20 LAKHS. AGAINST THIS EXPENDITURE IN CLUDES EVENT MANAGEMENT FEES OF RS.16.79 LAKHS AND BALL ROOM BOOKING AND DINNER RS. 8.29 LAK HS. FOR THE EVENT M AD QUIZ, THE TOTAL RECEIPT OF RS. 17.23 LAKHS INCLUDESRS.10LAKHS ON AC COUNT OF SPONSORSHIP TO M/S. SUNSHINE COMMUNICATION PS.2.5 LAKHS FROM BIRLA SUNLIFE AND P S. 3.5 LAKHS FROM ASL LTD. AGAINST THIS THE EXPENDITURE INCLUDES PS. 5.5 LAKHS ON ACCOUNT OF EV ENT RS. 1.86 LAKHS AS DINNER CHARGES ETC. ON THE ANALYSIS OF THIS DATA IT IS EVIDENT THAT THE AC TIVITIES OF THE APPELLANT ARE IN THE NATURE OF EVEN T MANAGEMENT WHERE THE BOOKINGS FOR SHOW ARE BEING MA DE AND SPONSORSHIP IS RECEIVED AND THE EVENT IS BEING MANAGED BY THE OUTSIDE AGENCIES. THE RE IS NO VISIBLE CHARITY IN THIS ACTIVITY OF THE APPELLANT. UNDER THESE CIRCUMSTANCES PROVISO TO SEC TION 2(15) SQUARELY APPLIES TO THE FACTS OR THE APPELLANT'S CASE. II. THE PROVISO TO SECTION 2(15) IS ATTRACTED EVEN IN A CASE WHERE THE ASSESSEE IS NOT CARRYING OUT BUSINESS, TRADE, COMMERCE BY ITSELF. THE CHARGI NG OF TEES AND CONSIDERATION 'IN RELATION TO' SERVICES (OR ANY TRADE, BUSINESS AND COMMERCE OR 'I NVOLVEMENT' IN TRADE, COMMERCE AND BUSINESS IS SUFFICIENT TO ATTRACT THE PROVISO TO SE CTION 2(15). THE DECISION IN THE CASE OF SUBHRAM TRUST VS. DIT (E) (2009) 317 ITR (AT)(BANG. ) THAT 'THE TERM IN RELATION TO SHOULD BE BROADLY INTERPRETED I.E. TO SAY IF ANY ACTIVITY WHI CH DIRECTLY OR INDIRECTLY FACILITATES THE RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS, IS CARRIED ON BY TRUST, THEN IT WILL BE COVERED UNDER PROVISO TO SECTION 2(15)1 IS RELEVANT IN DECIDING THAT THE CARRYING OUT OF TRADE, COMMERCE, BUSINESS BY THE ASSESSEE ITSELF IS NOT NE CESSARY FOR APPLICABILITY OF PROVISO TO SECTION 2(15). THEREFORE, THE ARGUMENTS OF THE APPE LLANT THAT IT IS NOT ENGAGED IN CARRYING OUT BUSINESS, COMMERCE, TRADE PER SE IS NOT RELEVANT TO THE ISSUE IN HAND AND SUCH ARGUMENTS ARE AGAINST THE LEGAL PROVISION OF SECTION 2(15) AND IT S APPLICABILITY UNDER THE FACTS AND CIRCUMSTANCES AS IN THE CASE OF THE APPELLANT. THE LEGAL QUESTION INVOLVED IN APPLICABILITY OF SECTION 2(15) OF THE I.T. ACT, 1961 IS NOT THE CARR YING OUT OF BUSINESS, TRADE OR COMMERCE PER SE, RATHER CHARGING OF FEES IN RELATION TO TRADE, COMME RCE, BUSINESS AND / OR INVOLVEMENT IN BUSINESS TRADE, COMMERCE IS SUFFICIENT FOR ATTRACTI NG PROVISO TO SECTION 2(15). THE OBSERVATION OF THE HIGH COURT OF KERALA AT ERNAKULAM IN WP(C).NO. 6899 OF 2009(F) IN THE CASE OF M/S.INFOPARKS, KERALA, KUSUMAGIRI PO IS APPLICABLE AND DECIDING FACTOR ON THE ISSUE, WHICH IS REPRODUCED FOR THE SAKE OF CONVENIENCE, AS FOLLOWS- -YET ANOTHER, IMPORTANT ASPECT TO BE NOTED IN THIS CONTEXT IS THAT, AFTER THE AMENDMENT BY INCORPORATING A PROVISO TO SECTION 2(15), THE FOURT H LIMB AS TO THE ADVANCEMENT OF 'ANY 5 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 OTHER OBJECT OF GENERAL PUBLIC UTILITY' WILL NO LON GER REMAIN AS CHARITABLE PURPOSE, IF IT INVOLVES CARRYING ON OF, (A) ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE O R BUSINESS; (B) ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATI ON TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR A FEE OR ANY OTHER CONSIDERATION, IRR ESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH AC TIVITY. THE FIRST LIMB OF EXCLUSION FROM CHARITABLE PURPOSE UNDER CLAUSE (A) WILL BE ATTRACT ED, IF THE ACTIVITY PURSUED BY THE INSTITUTION INVOLVES ANY TRADE, COMMERCE OR BUSINES S. BUT THE SITUATION CONTEMPLATED UNDER THE SECOND LIMB [CLAUSE (B)] STANDS ENTIRELY ON A DIFFERENT PEDESTAL, WITH REGARD TO THE SERVICE IN RELATION TO THE TRADE, COMMERCE OR B USINESS MENTIONED THEREIN. TO PUT IT MORE CLEAR, WHEN THE MATTER COMES TO THE SERVICE IN RELATION TO THE TRADE, COMMERCE OR BUSINESS, IT HAS TO BE EXAMINED WHETHER THE WORDS ' ANY TRADE, COMMERCE OR BUSINESS' AS THEY APPEAR IN THE SECOND LIMB OF CLAUSE (B) ARE IN CONNECTION WITH THE SERVICE REFERRED TO THE TRADE, COMMERCE OR BUSINESS PURSUED BY THE INSTITUTIONS TO WHICH THE SERVICE IS GIVEN BY THE ASSESSEE. IF THE SAID WORDS ARE ACTUALLY IN RESPECT OF THE TRADE COMMERCE OR BUSINESS OF THE ASSESSEE ITSELF, THE SA ID CLAUSE (SECOND LIMB OF THE STIPULATION UNDER CLAUSE (B) IS RATHER OTIOSE. SINC E THE ACTIVITY OF THE ASSESSEE INVOLVING ANY TRADE COMMERCE OR BUSINESS, IS /READY EXCLUDED FROM THE CHARITABLE PURPOSE BY VIRTUE OF THE FIRST LIMB (CLAUSE (A)) ITSELF, THERE IS NO NECESSITY TO STIPULATE FURTHER, BY WAY OF CLAUSE (B), ADDING THE WORDS 'OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS.' UNDER THE CIRCUMSTANCES, AND FACTS OF THE CASE THE ACTIVITIES OF THE APPELLANT ARE NOT WITHIN THE AMBIT OF- CHARITABLE PURPOSE. THE DECISION IN THE C ASE OF ACIT VS THE TRIBUNE TRUST,ITAT (CHANDIGARH) IN ITA NO. 1273/CHD/2012 IS ALSO RELEVANT WHERE IT WAS HELD THAT PUBLISHING OF JOURNALS / NEWSPAPERS AND DERIVING INCOME FROM ADVE RTISEMENT ETC. IS NOT CHARITABLE PURPOSE / ACTIVITY. IT IS NOTICED FROM THE SOURCES OF INCOME AND REVENUES DERIVED BY THE APPELLANT THAT THEY ARE IN THE NATURE OF REALIZATION OF FEES FOR VARIOU S SERVICES RENDERED BY WAY OF ORGANIZING AWARD FUNCTIONS, INCOME FROM EXHIBITIONS, SEMINARS, WORKS HOPS AND SO ON, FROM YEAR TO YEAR ON REGULAR BASIS IN FURTHERANCE OF THE INTEREST OF A P ARTICULAR INDUSTRY / BUSINESS INTEREST DEVOID OF CARRYING OUT ANY CHARITABLE ACTIVITIES AS DEFINED I N SECTION 2(15) OF THE I.T. ACT, 1961. THUS FROM THE ABOVE DISCUSSION AND FACTS OF THE CASE IT IS CL EAR THAT THE PROVISO TO SECTION 2(15) OF THE I.T. ACT, 1961 IS APPLICABLE FOR THE YEAR ON FACTS AND A S PER LAW. III. FURTHER IT WOULD BE RELEVANT TO MENTION HERE T HAT IF A CHARITABLE ORGANIZATION CARRYING OUT OBJECTS OF 'ADVANCEMENT OF GENERAL PUBLIC UTILITY' IS INVOLVED IN CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE, BUSINESS OR IS CHARGING FEES FOR SERVICES IN RELATION TO ANY TRADE, COMMERCE, BUSINESS, IS EXCLUDED FROM BEING 'CHARITA BLE.' THE CASE OF THE APPELLANT IS EXCLUDED FROM BEING CHARITABLE ALSO BECAUSE THE CHARITABLE A CTIVITY CLAIMED BY IT IS IN THE DOMAIN OF 'ADVANCEMENT OF GENERAL PUBLIC UTILITY' ONLY. THE P ROFIT MOTIVE BEHIND SUCH BUSINESS, COMMERCE OR TRADE ACTIVITY IS NOT REQUIRED TO BE SEPARATELY EXAMINED AND PROVED FOR APPLICABILITY OF PROVISO TO SECTION 2(15). THE SPECIFIC AMENDMENT BY WAY OF PROVISO TO SECTION 2(15) WET. A.Y. 2009-10 DOES NOT PROVIDE FOR CARRYING OUT BUSINESS TRADE OR COMMERCE PER E FOR APPLICABILITY OF PROVISO, RATHER THE STIPULATION IN THE PROVISO IS 'IN RELATI ON TO' WHICH IS TO BE INTERPRETED AND APPLIED IN TH AT CONTEXT - IN A WIDER TERM AND NOT TO BE CONFINED TO CARRYING OUT TRADE, BUSINESS AND PROFESSION AS HELD IN THE CASE OF SUBHRAM TRUST VS. DIT (E) (2 009) 317 ITR (AT) (BANG) REFERRED TO ABOVE. ACCORDINGLY, CONTENTION OF THE APPELLANT IS NOT ACC EPTABLE. IV. THE APPELLANT CONTENDED THAT ITS INCOME FROM OR GANIZING AWARD SHOWS IS MERELY INCIDENTAL. IN THIS REGARD IT IS MENTIONED THAT AS PER THE DATA DI SCUSSED IN THE PRECEDING PARAGRAPH, ITS MAIN 6 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 ACTIVITY IS ORGANIZING THESE SHOWS WHICH IS PREDOMI NANT AND NOT ANCILLARY. THIS IS ALSO EVIDENT FROM THE FACT THAT THE TOTAL RECEIPTS FROM AWARD FU NCTIONS, PROGRAMS, SEMINARS AND WORKSHOPS IS RS.157.20 LACS, WHILE THE RECEIPTS FROM MEMBERSHIP SUBSCRIPTION AND ENTRANCE FEES IS ONLY RS.6.09 LACS. ACCORDINGLY, THE CASE LAWS RELIED ON BY THE APPELLANT ARE NOT APPLICABLE TO THE APPELLANTS CASE. V. IT WAS STATED THAT THE ITAT ORDER RELIED UPON BY THE AO RELATED TO THE YEAR WHEN IT WAS NOT GRANTED REGISTRATION US/ 12A AND THE SAID ORDER WAS ON THE POINT OF MUTUALITY AND HENCE NOT RELEVANT. I AGREE WITH THE APPELLANT THAT DURING TH E YEAR UNDER CONSIDERATION, THE FINDINGS OF HON. ITAT ARE NOT RELEVANT. THIS IS ALSO BECAUSE IN THE YEAR BEFORE HONBLE ITAT, PROVISO TO SECTION 2(15) WAS NOT THERE ON THE STATUTE. VI. IN VIEW OF THE FACTS AND ABOVE LEGAL POSITION AS DISCUSSED, IT IS HELD THAT THE APPELLANT IS NOT ELIGIBLE FOR EXEMPTION U/S. 11. ACCORDINGLY GROUNDS NUMBER 1, 2 AND 3 RAISED BY THE APPELLANT ARE DISMISSED. 6. THE APPEAL IS THEREFORE DISMISSED. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE MAIN PLEA OF LD. AUHTORIZED REPRESENTATIVE F OR ASSESSEE [AR], SHRI HIRO RAI REVOLVES AROUND THE FACT THAT THE ACTIVITIES BEING CARRIED OUT BY THE ASSESSEE TRUST WERE INCIDENTAL TO THE ATTAINMEN T OF THE MAIN OBJECTIVE AND THERE WAS NO PROFIT MOTIVE SINCE THE SURPLUS WE RE PLOUGHED BACK IN FURTHERANCE OF MAIN OBJECTIVES OF THE ASSESSEE TRUS T. IT WAS FURTHER SUBMITTED THAT RELIANCE OF THE DECISION OF THIS TRI BUNAL FOR AY 1978-79 WAS MISPLACED SINCE THE ASSESSEE, SUBSEQUENTLY, OBTAINE D REGISTRATION U/S 12A. AN ALTERNATIVE SUBMISSION HAS ALSO BEEN PUT FORWARD ED IN THE SHAPE OF THE FACT THAT AN AMOUNT OF RS.78.85 LACS AS CREDITED IN THE PROFIT & LOSS ACCOUNT DURING IMPUGNED AY HAD ALREADY BEEN OFFERED TO TAX IN EARLIER YEARS AND THEREFORE, THE SAME WAS EXCLUDIBLE WHILE COMPUTING THE SURPLUS EARNED BY ASSESSEE DURING IMPUGNED AY. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE, SHRI RAJESH KUMAR YADAV SUBMITTED THAT THE ASSESSEE DID NOT CARRY OUT ANY CHARITABLE ACTIVITIES DURING THE YEAR AND WAS OPERATING 7 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 MORE LIKE AN EVENT MANAGEMENT ENTITY AND THEREFORE, THE LOWER AUTHORITIES WERE JUSTIFIED IN BRINGING THE SURPLUS TO TAX. 5.1 WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS A ND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLACED IN TH E PAPER BOOK AND JUDICIAL PRONOUNCEMENTS AS CITED BEFORE US. AT THE OUTSET WE ARE OF THE OPINION THAT THE RATIO OF THIS TRIBUNAL RENDERED IN ASSESSEES OWN CASE FOR AY 1978-79 COULD NOT BE APPLIED SINCE THE ASSESSEE, POST THAT DECISION, OBTAINED REGISTRATION U/S 12A VIDE CERTIFICATE NO. INS/31155 DATED 14/01/2000 WITH EFFECT FROM 01/04/1990, A COPY OF W HICH HAS BEEN PLACED ON RECORD. THEREFORE, THE CLAIM OF THE ASSESSEE FOR THE IMPUGNED AY WAS TO BE EXAMINED AT THE THRESHOLD OF STATUTORY PROVISION S OF SECTION 11 & 12. HENCE, THE APPROACH OF LD. AO, TO THAT EXTENT, WAS ERRONEOUS. 5.2 AT THE SAME TIME, THE OBSERVATION OF THE LD. CI T(A) THAT THE ASSESSEE WAS OPERATING MORE LIKE AN EVENT MANAGEMENT ENTITY WHERE THE BOOKING OF THE SHOWS WERE BEING MADE AND SPONSORSHIP FEES WAS BEING RECEIVED AND THE EVENT WAS BEING MANAGED BY OUTSIDE AGENCIES, AL SO REMAIN UN- REBUTTED. UPON PERUSAL OF FINANCIAL STATEMENTS FOR IMPUGNED AY AS PLACED BEFORE US, WE CONCUR WITH THIS STAND OF LD. CIT(A) SINCE THE BROAD BREAK-UP OF THE ASSESSEES GROSS RECEIPTS COULD BE CATEGORIZ ED AS FOLLOWS:- NO. NATURE OF RECEIPTS AMOUNT (RS.) 1. MEMBERSHIP SUBSCRIPTIONS, ENTRANCE FEES, MISC. INCOMES 6,25,950/- 2. INTEREST & OTHERS 17,69,828/- 3. AWARD FUNCTIONS 1,57,22,000/- 4. PROGRAMS, SEMINARS & WORKSHOPS 36,67,957/- 5. PREMISES FUND WRITTEN BACK 98,35,845/- TOTAL 3,16,21,580/- 8 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 IT IS CLEAR FROM THE ABOVE TABLE THAT THE ASSESSEE S MAJOR ACTIVITIES DURING THE IMPUGNED AY WERE CONFINED TO CONDUCTING AWARD F UNCTIONS / PROGRAMS ONLY. THE ONLY PLEA IN SUPPORT OF THE SAME AS RAISE D BY LD. AR IS THE ASSERTION THAT THE SAID ACTIVITIES WERE INCIDENTAL TO CARRYING OUT THE MAIN OBJECTIVES OF THE ASSESSEE TRUST AND SECONDLY, THER E WAS NO PROFIT MOTIVE IN CARRYING OUT THE SAME. IN SUPPORT, CERTAIN JUDICIAL PRONOUNCEMENTS HAVE BEEN CITED BEFORE US. THE LD. AR HAS ALSO RAISED AN ALTERNATIVE PLEA THAT THE AMOUNT OF RS.78.85 LACS AS WRITTEN-OFF BY WAY O F CREDIT TO PROFIT & LOSS ACCOUNT HAD ALREADY BEEN OFFERED TO TAX IN EARLIER YEARS AND THEREFORE, THE SAME IS EXCLUDIBLE WHILE COMPUTING THE SURPLUS FOR IMPUGNED AY. IN OUR OPINION, THESE SUBMISSIONS REQUIRE PROPER APPRECIAT ION OF FACTUAL MATRIX WHICH HAS NOT BEEN DONE BY LD. AO PARTICULARLY THE SUBMISSIONS THAT THE ACTIVITIES BEING CARRIED OUT BY THE ASSESSEE WERE I NCIDENTAL TO CARRYING OUT THE OBJECTIVES ON THE BASIS OF WHICH REGISTRATION W AS GRANTED TO THE ASSESSEE. 5.3 KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMS TANCES, KEEPING ALL ISSUES OPEN, WE DEEM IT FIT TO RESTORE THE MATTER B ACK TO THE FILE OF LD. AO FOR RE-ADJUDICATION OF THE SAME WITH A DIRECTION TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM AS ARGUED BEFORE US FAILING WHICH LD. AO SHALL BE AT LIBERTY TO DECIDE THE SAME AS PER LAW ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 6. THE APPEAL STAND ALLOWED FOR STATISTICAL PURPOSE S IN TERMS OF OUR ABOVE ORDER. 9 ITA NO.5531/MUM/2015 THE ADVERTISING CLUB BOMBAY ASSESSMENT YEAR-2010-11 ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2018. SD/- SD/- (C.N.PRASAD) (MANOJ KUM AR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 26.09.2018 SR.PS:-THIRUMALESH ( COPY OF THE ORDER FORWARDED TO : 1. )*+,-. ( THE APPELLANT 2. 234-. ( THE RESPONDENT 3. 84984 :; < )*+, = ( THE CIT=A< 4. 84984 :; ( CIT CONCERNED 5. DEFG+42H;HIJ K 849)*+,L4)IJ9M K ( DRK ITATK MUMBAI 6. GNOP, ( GUARD FILE '# $ %'&/ BY ORDERK ( / %)'*+,-'& =DY.(ASSTT.REGISTRAR< *&-.*/0&1 2 / ITAT2 MUMBAI