The Income Tax Officer, Jammu V. M/s. J.K. Educational Society, Jammu

ITA 556/ASR/2013

• Counselvise Citation: 55620914 RSA 2013
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-01-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 29-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: P N ARORA
• Keywords: Charitable institution; Capital expenditure
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.556(ASR)/2013 ASSESSMENT YEAR:2010-11 PAN :AABHJ0268C INCOME TAX OFFICER, VS. M/S. J.K. EDUCATIONAL SOCI ETY, WARD 1(1), JAMMU. KUNJWANI, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.AMRIK CHAND, DR RESPONDENT BY:SH.P.N.ARORA, ADV. DATE OF HEARING:08/01/2014 DATE OF PRONOUNCEMENT:17/01/2014 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), JAMMU, DATED 07.06.2013 FOR THE ASSESSMENT YEAR 201 0-11. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.34,35,170/- ON ACCOUNT OF EXEMPTION U/S 11 TO THE APPELLANT TRUST. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN FOLLOWING THE DECISION OF HONBLE JURISDI CTIONAL ITAT AMRITSAR BENCH AND HONBLE HIGH COURT OF PUNJAB & H ARYANA IN THE CASE UNDER CONSIDERATION IN CONSIDERING THE EXPENDITURE ITA NO.556(ASR)/2013 2 INCURRED FOR THE PURCHASE OF THE FIXED ASSETS FOR T HE PURPOSE OF ACHIEVING OBJECTIVE OF THE TRUST AS APPLICATION OF MONEY. 3. THAT THE APPELLANT CRAVES TO AMEND OR ADD ANY ON E OR MORE GROUNDS OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN RECEIPTS OF R S.6,60,79,784/- ON ACCOUNT OF ADMISSION FEE, TUITION FEE ETC. AND BANK INTEREST. NO OTHER SOURCE OF INCOME HAS BEEN ADMITTED. AGAINST THE ABOVE RECE IPTS THE EXPENDITURE OF RS.5,27,32,649/- HAVE BEEN INCURRED THEREBY LEAVING SURPLUS OF RS.1,33,47,139/-. THE ASSESSEE HAS BEEN REGISTERED U/S 12AA OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 11.01.1995. THE ASSE SSEE VIDE ORDER SHEET ENTRY DATED 19.10.2012 WAS ASKED TO EXPLAIN AS TO W HY EXEMPTION CLAIMED U/S 11 OF THE ACT IN RESPECT OF EXPENSES NOT INCURR ED UPTO 85% OF THE RECEIPTS BE DISALLOWED. 3. THE AO AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AND RELYING UPON THE DECISION OF HONBLE UTTRAKHAND HIGH COURT IN THE CASE OF CIT VS. QUEENS EDUCATIONAL SOCIETY REPORTED IN 223 CTR 395 MADE AN ADDITION OF RS. 34,35,170/- AS UNDER: PARTICULARS AMOUNT (RS.) GROSS RECEIPTS 66079784/- 85% OF THE ABOVE INCOME REQUIRED TO BE UTILIZED 561 67816/- EXPENSES AS PER INCOME & EXP. STATEMENT 52732645/- ITA NO.556(ASR)/2013 3 INCOME NOT UTILIZED FOR CHARITABLE PURPOSES 3435170 /- 4. THE LD. CIT(A) AFTER ACCEPTING THE EXPLANATION O F THE ASSESSEE AND RELYING UPON THE DECISION OF THE HONBLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUS T V. UNION OF INDIA REPORTED IN 370 ITR 73 AND DECISION OF ITAT, AMRITS AR BENCH IN THE CASE OF ITO VS. K.C. EDUCATIONAL SOCIETY IN ITA NO.405(ASR) /2012 ASSESSMENT YEAR 2009-10 DATED 28.12.2012 ALLOWED THE CLAIM OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE A.O. 5. THE LD. DR, AT THE OUTSET, RELIED UPON THE ORDE R OF THE ASSESSING OFFICER. 6. THE LD. COUNSEL FOR THE ASSESSEE, RELIED UPON TH E ORDER OF THE CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEW OF THE LD. CIT(A) WHO HAS F OLLOWED THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST V. UNION OF INDIA (S UPRA), WHERE IT HAS BEEN HELD THE CAPITAL EXPENDITURE HAS TO BE DEDUCTED FRO M THE GROSS INCOME OF THE EDUCATIONAL INSTITUTION IN DETERMINING WHETHER 85% OF THE INCOME HAS BEEN APPLIED FOR ITS OBJECTS. FURTHER, THE ITAT BENCH IN THE CASE OF MODERN SOCIETY HAS ALSO RELIED ON THE JUDGMENT IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST AND HAS HELD THAT TH E AMOUNT INCURRED FOR THE ITA NO.556(ASR)/2013 4 CONSTRUCTION OF BUILDING IS THE APPLICATION OF MONE Y FOR THE OBJECT OF SOCIETY. THE ITAT, AMRITSAR BENCH IN THE CASE OF ITO VS. K.C . EDUCATIONAL SOCIETY IN ITA NO.405(ASR)/2012 AY 2009-10 HAS HELD IN ITS ORDER DATED 28.12.2012 THAT THE CAPITAL EXPENDITURE IN REPAIR A ND MAINTENANCE OF BUILDING IS AN APPLICATION OF INCOME FOR CHARITABLE PURPOSES IN FURTHERANCE OF OBJECTS AND PURPOSES OF SOCIETY. ACCORDINGLY, IN TH E FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE FIND NO INFIRMITY IN THE OR DER OF THE LD. CIT(A) AND THE SAME IS UPHELD. HENCE, ALL THE GROUNDS OF THE R EVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.556(ASR)/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH JANUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17TH JANUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. J.K. EDUCATIONAL SOCIETY, JAMMU 2. THE ITO WARD 1(1), JAMMU 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR