DDIT (E), Delhi V. M/s. All India Football Federation, New Delhi

ITA 6352/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97405 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: SUNIL ARORA CA SH
• Keywords: Capital asset; Depreciation; Charitable institution; Question of law
• Section: 12AA; 12; 11

Judgement Text

1 ITA NO. 63 52/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH:A NEW DELHI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO. 6352/DE L/2013 (ASSESSMENT YEAR-2009- 10) DDIT(E), INV. CIR.-I, DELHI. VS ALL INDIA FOOTBALL FEDERATION, SECTOR-19, PHASE-I, DWARKA, NEW DELHI. AADTS1441C APPELLANT BY SH. K.K. JAISWAL, DR RESPONDENT BY SH. SUNIL ARORA, CA SH. PANKAJ JAIN, CA MS. RUCHIKA JAIN, CA ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FRO M THE ORDER OF THE OF LD. CIT(A)S- XXI, NEW DELHI DATED 16.09.201 3 FOR A.Y. 2009- 10 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS. 44,69,445/- ON ACCOUNT OF INCOME ASSESSED BY THE AO WHILE INVOKING THE PROVISO TO SECTION 2(15) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS. DATE OF HEARING 07.09.2015 DATE OF PRONOUNCEMENT 23.09.2015 2 ITA NO. 63 52/DEL/2013 15,29,325/- MADE BY THE AO ON ACCOUNT OF DISALLOWAN CE OF DEPRECIATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FA CT THAT THE AO DENIED THE CLAIM OF EXEMPTION TO THE ASSESSEE U/ S 11 & 12 OF THE INCOME TAX ACT, 1961. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARIN G. 2. BRIEF FACTS OF THE CASE ARE THAT THE RESPONDENT ASSESSEE HAD FILED ITS RETURN ON 09.03.2010, FOR THE YEAR UNDER CONSIDERATION AT NIL INCOME AND CLAIMED EXEMPTION U/S 11 & 12 OF THE ACT. THE RESPONDENT ASSESSEE IS A FEDERATION OF SIX FOOTBALL ASSOCIATION WHICH WAS ESTABLISHED IN 1937. THE CASE FOR THE AS SESSMENT YEAR UNDER CONSIDERATION WAS TAKEN UP FOR SCRUTINY AND T HE AO DENIED EXEMPTION U/S 11 & 12 BY INVOKING FIRST PROVISO TO SECTION 2(15) OF THE ACT. IT WAS ALLEGED BY THE LD. AO THAT THE INC OME FROM SPONSORSHIP AND TELECASTING, ARE IN THE NATURE OF B USINESS AND THE ACTIVITIES OF THE APPELLANT DO NOT QUALIFY FOR CHAR ITABLE PURPOSE BY VIRTUE OF THE AMENDMENT BROUGHT IN BY FINANCE ACT, 2008 IN THE FORM OF INSERTION TO PROVISO TO SECTION 2(15) OF TH E ACT. THE LD. AO ALSO DISALLOWED THE CLAIM OF DEPRECIATION AMOUNTING AS DEBITED TO THE INCOME AND EXPENDITURE ACCOUNT. IT WAS CONTEND ED BY THE AO THAT THE RESPONDENT ASSESSEE HAS CLAIMED DOUBLE DED UCTION OF DEPRECIATION IN THE FORM OF APPLICATION OF INCOME A T THE TIME OF PURCHASE OF FIXED ASSETS AND SECONDLY BY WAY OF CLA IMING DEPRECIATION AS AMORTIZATION OF WRITTEN DOWN VALUE. 3. AGGRIEVED BY THE ORDER OF THE AO THE RESPONDENT ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 3 ITA NO. 63 52/DEL/2013 4. THE LD. CIT(A) DELETED THE ENTIRE ADDITIONS MADE BY THE LD. AO IN VIEW OF HIS FINDINGS AS UNDER: THE ASSESSEE IS INVOLVED IN THE PROMOTION OF FOOT BALL GAMES AND SPORTS AND AS SUCH IT IS A CHARITABLE WOR K AND THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 11. THE CASE OF THE SPORTS AND ITS PROMOTION COMES UNDER TH E DEFINITION OF CHARITABLE PURPOSES AS PROVIDED IN TH E SIXTH LIMB OF SECTION 2(15) WHICH SPECIFIES AS ADVANCEMEN T OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS PART OF THE CHARITABLE PURPOSES. THE MERE FACT THAT THE ASSESS EE RECEIVES SPONSORSHIP FEES AND THE TELECASTING RIGHT S FEES DOES NOT MEAN THAT THE ASSESSEE IS INVOLVED IN ANY BUSINESS ACTIVITY. THE CASE LAWS OF THE ASSESSEE R ELIED ON BY THE ASSESSEE IS ALSO APPLICABLE. IT IS SEEN THAT IN THE CASE OF HAMSADHWANI VS. DIT(E) (2012) 19 TAXMANN.COM 10 ITAT CHENNAI, THE ASSESSEE WAS PROMOTING MUSIC IN TAMIL NADU FOR WHICH IT WAS RECEIVING SPONSORSHIP AND COACHING FEES AND THE HONBLE TRIBUNAL DID NOT ACCEPT THE ARGUMENT OF DIT (E) THAT THE ASSESSEE WAS INVOLVED IN ANY BUSINESS ACTI VITY AND THE EXEMPTION WAS ALLOWED. AFTER CONSIDERING A LL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF TH E VIEW THAT THE ASSESSEE IS A CHARITABLE INSTITUTION AND ACCORDINGLY THE AO IS DIRECTED TO ALLOW EXEMPTION U /S 11 TO THE ASSESSEE. THE AO HAS DISALLOWED THE DEPRECIATION ON THE GROUND THAT THE ASSESSEE IS CLAIMING DOUBLE DEDUCTI ON VIDE THE ORDER OF THE AO. THE ASSESSEE IS IN APPEA L AGAINST THE ORDER OF THE AO AND IT IS SUBMITTED THA T THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION AS THE SAME I S CLAIMED AND IS ALLOWABLE. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES O F THE CASE, I AM OF THE VIEW THAT THE ASSESSEE IS ELIGIBL E FOR DEPRECIATION AND ACCORDINGLY THE AO IS DIRECTED TO ALLOW THE SAME AND AS SUCH THE APPEAL OF THE ASSESSEE IS ALLOWED. 4 ITA NO. 63 52/DEL/2013 5. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD. DR CONTENDS THAT THE AO HAS CORRECTLY DI SALLOWED INCOME FROM SPONSORSHIP AND TELECASTING ARE IN THE NATURE OF BUSINESS AND THE ACTIVITIES OF THE RESPONDENT ASSES SEE DO NOT QUALIFY FOR CHARITABLE PURPOSES. HE FURTHER EMPHAS IZED ON THE AMENDMENT BROUGHT IN BY FINANCE ACT BY INSERTION OF PROVISO TO SECTION 2(15) W.E.F. 01/04/2009 IN RESPECT OF THE C LAIM OF DEPRECIATION. 7. ON THE CONTRARY THE LD. AR CONTENDS THAT THE RES PONDENT ASSESSEE IS CARRYING OUT ITS OBJECTIVE OF PROMOTION OF FOOTBALL SPORTS AT NATIONAL AND INTERNATIONAL LEVEL. ITS ACTIVITIE S ARE IN NATURE OF ADVANCEMENT OF GENERAL PUBLIC UTILITY AND WILL QUAL IFY AS CHARITABLE PURPOSES IN TERMS OF DEFINITION CONTAINED IN SECTI ON 2(15) OF THE ACT. THE LD. AR FURTHER CONTENDS THAT THE PROVISO TO SECTION 2(15) OF THE ACT AS INSERTED BY THE FINANCE ACT, 2015 W.E .F. 01.04.2009 PROVIDES FOR CERTAIN CIRCUMSTANCES, WHERE ADVANCEME NT OF ANY GENERAL PUBLIC UTILITY SHALL NOT BE TREATED AS CHAR ITABLE PURPOSES AND THE SAME DO NOT GET ATTRACTED TO THE FACTS AND CIRCUMSTANCES OF APPELLANTS CASE. 8. THE LD. AR SUBMITS THAT THE RECEIPT OF FEES FROM SPONSORSHIP RIGHTS AND GRANT OF TELECASTING RIGHTS DO NOT AMOUN T TO ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AS CON TEMPLATED UNDER FIRST LIMB OF THE PROVISO TO SECTION 2(15). FOR THE ABOVE PROPOSITION, THE LD. AR RELIES UPON THE FOLLOWING J UDGMENTS: 5 ITA NO. 63 52/DEL/2013 1. DIRECTOR OF SUPPLIES AND DISPOSES VS. MEMBER BOARD OF REVENUE REPORTED IN AIR (1967) (SC) (1826); 2. STATE OF ANDHRA PRADESH VS. H. ABDUL BAKI BROTHERS REPORTED IN AIR (1965) SC 531; 3. DELHI & DISTRICT CRICKET ASSOCIATION VS. DIT(E) REP ORTED IN ITA NO. 3095/DEL/2012; 4. HAMSADHWANI VS. DIT(E) REPORTED IN [2012] 19 TAXMAN N.COM 10 (CHENNAI TRIB.); 5. TAMILNADU CRICKET ASSOCIATION VS. DIT(E) REPORTED I N [2013] 40 TAXMANN.COM 250. 9. THE LD. AR SUBMITTED THAT THE INCOME FROM SPONSO RSHIP AND GRANT OF COMMERCIAL RIGHTS/TELECASTING RIGHTS RECEI VED BY THE APPELLANT ARE IN ORDER TO ENSURE THE ENFORCEMENT OF ITS OBJECT, OF PROMOTION OF GAME OF FOOTBALL FOR WHICH APPELLANT S OCIETY WAS FORMED AND NO PROFIT MOTIVE WAS INVOLVED. 10. WE HAVE PERUSED THE RECORDS, THE PAPER BOOK FIL ED AND THE DECISIONS RELIED UPON BY THE PARTIES. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE QUESTION THAT COMES UP FOR ADJUDICATION IS WHETHER THE RESPONDENT ASSESSEE IS ENGAGED IN THE ACTIVITIES, WHICH ARE IN THE NATURE OF EDUCATIONAL OR ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY. THEREFORE, IT IS NECESSARY TO CONSIDER TH E OBJECTS OF THE APPELLANT SOCIETY. THE MAIN OBJECTIVE OF THE FEDERA TION IS TO PROMOTE FOOTBALL GAME, TO ORGANIZE TOURNAMENTS, TO ORGANIZE TRAINING FOR PLAYERS, TRAINEES AND COACHES ETC. 10.1 THE RESPONDENT ASSESSEE IS A REGISTERED SOCIE TY UNDER THE SOCIETIES REGISTRATION ACT, 1860. IT IS THE APEX A DMINISTRATIVE BODY GOVERNING THE SPORT OF FOOTBALL IN INDIA AND HAS BE EN RECOGNIZED AS NATIONAL SPORTS FEDERATION FOR THE DISCIPLINE OF FO OTBALL BY THE 6 ITA NO. 63 52/DEL/2013 MINISTRY OF YOUTH AFFAIRS AND SPORTS GOVERNMENT OF INDIA. ALL INDIA FOOTBALL FEDERATION HAS BEEN NOTIFIED SPORTS BODY U /S 10(23) AND, THEREFORE, ITS INCOME WAS EXEMPT TILL THE SAID SECT ION WAS REPEALED. SUBSEQUENTLY RESPONDENT ASSESSEE GOT ITSELF REGISTE RED U/S 12AA OF THE ACT W.E.F. 01/04/2001. 10.2 THE FACT THAT THE RESPONDENT ASSESSEE HAS CAR RIED OUT HIS ACTIVITIES FOR PROMOTION OF THE AFORESAID CHARITABL E OBJECTIVES HAS NOT BEEN DISPUTED BY THE LD. AO AT ANY STAGE. AS P ER CLAUSE (5) OF ARTICLE 63 OF THE CONSTITUTION OF THE RESPONDENT AS SESSEE IT IS PROVIDED THAT; THE FEDERATION FORM SHALL BE IRRECOVERABLE AND THE BENEFITS OF THE FEDERATION SHALL BE OPENED TO ALL IRRESPECTIVE OF CAST/CREED/RELIGION. THE FUND AND T HE INCOME OF THE FEDERATION SHALL BE SOLELY UTILIZED F OR THE ACHIEVEMENTS OF ITS OBJECT AND NO PORTION OF IT SHA LL BE UTILIZED FOR PAYMENT TO EXECUTIVE COMMITTEE/SUB- COMMITTEE/GENERAL BODY MEMBERS BY WAY OF PROFITS, INTEREST AND DIVIDEND. 10.3 FROM THE ABOVE, IT IS VERY CLEAR THAT THE AC TIVITIES CARRIED OUT BY THE RESPONDENT ASSESSEE CERTAINLY AMOUNTS TO CHA RITABLE PURPOSE AS IT IS BEING COVERED UNDER THE LIMB THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY TO THE DEFINITION OF CHARITABLE PURPOSE IS CONTAINED IN SECTION 2(15) OF THE ACT. THE ACTIVITIES UNDER TAKEN BY THE TRUST ARE UNDISPUTEDL Y FOR THE WELL BEING OF THE SECTION OF PUBLIC AT LARGE, IT MEETS T HE REQUIREMENTS OF BOTH THE EXPRESSION I.E. GENERAL PUBLIC AND THE GE NERAL PUBLIC UTILITY. 10.4 THE RECEIPTS FROM SPONSORSHIP RIGHTS AND TELE CASTING RIGHTS DOES NOT CONSTITUTE ANY ACTIVITY. 7 ITA NO. 63 52/DEL/2013 S.NO. PARTICULARS AMOUNT AMOUNT 1. INCOME FROM SPONSORSHIP & GRANT OF COMMERCIAL RIGHTS 23,24,46,625 GRANT OF TELECASTING AND MASTER RIGHTS 21,60,00,000 SPONSORSHIP 1,64,46,625 2. GRANTS AND AIDS RECEIVED 66,30,424 3. FEES AND LEVIES 20,29,100 4. OTHER INCOME 73,09,944 TOTAL 24,84,16,093 11. A BARE PERUSAL OF THE AFORESAID DETAIL WOULD RE VEAL THAT IF THE RESPONDENT ASSESSEE HAD NOT RECEIVED INCOME FORM SPONSORSHIP/GRANT OF RIGHTS, THEN THE RESPONDENT AS SESSEE WOULD NOT HAVE POSSESSED A FRACTION OF FUNDS WHICH IT REQ UIRES FOR ADVANCEMENT OF ITS OBJECTIVES. THE OTHER GRANTS REC EIVED BY THE APPELLANT ARE FROM GOVERNMENT OR FIFA. THESE OTHER GRANTS IN AID ARE NOT EVEN 3% OF THE INCOME FROM SPONSORSHIP/GRAN T OF RIGHTS. FURTHER IN THE RELEVANT PERIOD IF AIFF HAD NOT RECE IVED ANY INCOME BY WAY OF SPONSORSHIP OR GRANT OF RIGHTS IT WOULD H AVE SUSTAINED A HUGE DEFICIT AND WOULD HAVE BEEN COMPELLED TO DRAST ICALLY REDUCED ITS SPORTS PROMOTION ACTIVITY. 12. THUS, IT IS NOTICED THAT THE RECEIPT OF FEES FR OM THE SPONSORSHIP RIGHTS AND TELECASTING RIGHTS DO NOT AMOUNT TO CARR YING OUT OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS BUT IS INCIDENTAL TO CARRYING ON OF THE MAIN OBJECTIVE OF THE RESPONDENT ASSESSEE. 13. MOREOVER, IT IS FURTHER OBSERVED THAT NO PART O F ITS SURPLUS COULD BE DISTRIBUTED TO THE BOARD OF ITS MEMBERS IN THE FORM OF 8 ITA NO. 63 52/DEL/2013 DIVIDEND OR PROFIT. THEREFORE, THE RESPONDENT ASSE SSEE HAS TO BE NECESSARILY CONSIDERED A GENUINE CHARITABLE ORGANIZ ATION ELIGIBLE TO CLAIM EXEMPTION U/S 11 & 12 OF THE ACT AND THE PROV ISIONS OF THE FIRST PROVISO TO SECTION 2(15) DO NOT APPLY TO THE CASE OF THE APPELLANT. 14. SECTION 2(15) OF THE ACT DEFINES 'CHARITABLE PU RPOSE' AS UNDER: (15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE PO OR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONM ENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PR ESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HI STORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY: PROVISO INSERTED THERETO BY THE FINANCE ACT, 2008, WITH EFFECT FROM 01.04.2009, READS AS UNDER: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY; '(EMPHASIS SUPPLIED) 15. THE INTENTION OF THE LEGISLATURE BEHIND INTRODU CTION OF THE AFORESAID PROVISO IN THE DEFINITION OF 'CHARITABLE PURPOSE' IN SECTION 2(15) OF THE ACT CAN BE GATHERED FROM CBDT CIRCULAR NO. 11 DATED 19TH DECEMBER, 2008 REPORTED IN 221 CTR (ST) 1, WHE REIN SCOPE OF THE SAID AMENDMENT HAS BEEN ELABORATED IN THE FOLLO WING WORDS: 9 ITA NO. 63 52/DEL/2013 '3. THE NEWLY AMENDED SECTION 2(15) WILL APPLY ONLY TO THE ENTITIES WHOSE PURPOSE IS 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' I.E. THE FOURTH LIMB OF DEF INITION OF 'CHARITABLE PURPOSE' CONTAINED IN SECTION 2(15). HE NCE, SUCH ENTITIES WILL NOT BE ELIGIBLE FOR EXEMPTION UNDER S ECTION 11 OR UNDER SECTION 10(23C) OF THE ACT' IF THEY CARRY ON COMMERCIAL ACTIVITIES. WHETHER SUCH AN ENTITY IS CARRYING ON A N ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS IS A QUES TION OF FACT WHICH WILL BE DECIDED BASED ON THE NATURE, SCO PE, EXTENT AND FREQUENCY OF ACTIVITY. 3.1 THERE ARE INDUSTRY AND TRADE ASSOCIATIONS WHO C LAIM EXEMPTION FROM TAX UNDER SECTION 11 OR ON THE GROUN D THAT THEIR OBJECTS ARE FOR CHARITABLE PURPOSES AS THESE ARE COVERED UNDER THE 'ANY OTHER OBJECT OF PUBLIC UTILITY'. UND ER THE PRINCIPLE OF MUTUALITY, IF TRADING TAKES PLACE BETW EEN THE PERSONS WHO ARE ASSOCIATED TOGETHER AND CONTRIBUTE TO A COMMON FUND FOR THE FINANCING OF SOME VENTURE OR OB JECT, AND IN THIS RESPECT HAVE NO DEALINGS OR RELATIONS WITH ANY OUTSIDE BODY, THEN THE SURPLUS RETURNED TO SUCH PERSONS IS NOT CHARGEABLE TO TAX. THEREFORE, WHERE INDUSTRY OR TRA DE ASSOCIATION CLAIMS BOTH TO BE CHARITABLE INSTITUTIO NS AS WELL AS MUTUAL MEMBERS, THESE WOULD NOT FALL UNDER THE P URVIEW OF SECTION 2(15) OWING TO THE PRINCIPLE OF MUTUALIT Y. HOWEVER, IF SUCH ORGANIZATIONS HAVE DEALINGS WITH THE NON-ME MBERS, THEIR CLAIM FOR CHARITABLE INSTITUTION WOULD NOW BE GOVERNED BY THE ADDITIONAL CONDITIONS STIPULATED IN PROVISO TO SECTION 2(15). 3.2 IN THE FINAL ANALYSIS, WHETHER THE ASSESSEE HAS FOR ITS OBJECT, THE ADVANCEMENT OF ANY OTHER OBJECT OF GENE RAL PUBLIC UTILITY, IS A QUESTION OF FACT. IF SUCH ASSESSEE IS ENGAGED IN ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS OR RENDERS ANY SERVICE IN CONNECTION TO TRADE, COMMERC E OR BUSINESS, IT WOULD NOT BE ENTITLED TO CLAIM THAT IT S OBJECT IS FOR CHARITABLE PURPOSES. IN SUCH A CASE, THE OBJECT OF 'GENERAL PUBLIC UTILITY' WILL ONLY BE A MASK OR A DEVICE TO HIDE THE TRUE PURPOSE WHICH IS TRADE, COMMERCE, OR BUSINESS OR RE NDERING OF ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BU SINESS. EACH CASE WOULD THEREFORE, HAVE TO BE DECIDED ON IT S OWN 10 ITA NO. 6 352/DEL/2013 FACTS, AND GENERALIZATIONS ARE NOT POSSIBLE. AN ASS ESSEE WHO CLAIMS THAT THEIR OBJECT IS 'CHARITABLE PURPOSE' WI THIN THE MEANING OF SECTION 2(15) WOULD BE WELL ADVISED TO E SCHEW ANY ACTIVITY WHICH IS IN THE NATURE OF TRADE, COMME RCE OR BUSINESS OR RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE COMMERCE OR BUSINESS.' (EMPHASIS SUPPLIED). 15.1 IN THIS REGARD, THE RELIANCE HAS BEEN PLACED O N THE JUDGMENT BY CHANDIGARH BENCH IN THE CASE OF HIMACHAL PRADESH ENVIRONMENT PROTECTION AND POLLUTION CONTROL BOARD VS. CIT REPORTED IN (2010) 42 SOT 343. THE OBSERVATION OF THE TRIBUNAL IN THIS JUDGMENT IS THAT; WHERE AN OBJECT OF GENERAL PUBLIC UTILITY IS NOT M ERELY A MASK TO HIDE TRUE PURPOSE OR RENDERING OF ANY SERVI CE IN RELATION THERETO AND WHERE SUCH SERVICES ARE BEING RENDERED AS PURELY INCIDENTAL TO AS SUB-SERVIENTE TO MAKE OB JECTIVE OF GENERAL PUBLIC UTILITY, CARRYING ON BONAFIDE ACTIVI TIES IN FURTHERANCE OF SUCH ACTIVITIES OF GENERAL PUBLIC UT ILITY WOULD NOT BE HIT BY PROVISO TO SECTION 2(15). 16. THE HONBLE APEX COURT HELD IN THE CASE OF CIT VS. ANDHRA CHAMBER OF COMMERCE 55 ITR 722 THAT ONLY THE PREDOM INANT OBJECT FOR WHICH THE ORGANIZATION WAS CREATED IS ALONE TO BE CONSIDERED FOR THE PURPOSE FOR DETERMINING WHETHER THE NATURE OF A CTIVITIES FALL WITHIN THE SCOPE AND AMBIT OF CHARITY. THE RATIO LAID DOWN IN THIS CASE WAS FOLLOWED AGAIN IN THE CASE OF FIVE JUDGES DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ADDITIONAL COM MISSIONER OF INCOME-TAX, GUJARAT V. SURAT ART SILK CLOTH MANUFAC TURERS ASSOCIATION 121 ITR 1, WHICH HELD AS UNDER VIDE PAG ES NOS.11 AND 12: 11 ITA NO. 6 352/DEL/2013 .THE LAW IS WELL SETTLED THAT IF THERE ARE SEVE RAL OBJECTS OF A TRUST OR INSTITUTION, SOME OF WHICH AR E CHARITABLE AND SOME NON CHARITABLE AND THE TRUSTEES OR THE MAN AGERS IN THEIR DISCRETION ARE TO APPLY THE INCOME OR PROP ERTY TO ANY OF THOSE OBJECTS, THE TRUST OR INSTITUTION WOULD NO T BE LIABLE TO BE REGARDED AS CHARITABLE AND NO PART OF ITS INC OME WOULD BE EXEMPT FROM TAX. IN OTHER WORDS, WHERE THE MAIN OR PRIMARY OBJECTS ARE DISTRIBUTIVE, EACH AND EVERY ONE OF THE OBJECTS MUST BE CHARITABLE IN ORDER THAT THE TRUST OR INSTITUTION MIGHT BE UPHELD AS A VALID CHARITY AS H ELD BY MOHAMMED IBRAHIM RIZA V. CIT [1930] LR 57 IA 260 AN D EAST INDIA INDUSTRIES ( MADRAS)PVT. LTD. V. CIT [19 67] 65 ITR 611(SC). BUT IF THE PRIMARY OR DOMINANT PURPOSE OF A TRUST OR INSTITUTION IS CHARITABLE, ANOTHER OBJECT WHICH BY ITSELF MAY NOT BE CHARITABLE BUT WHICH IS MERELY ANCILLARY OR INCIDENTAL TO THE PRIMARY OR DOMINANT PURPOSE WOULD NOT PREVENT THE TRUST OR INSTITUTION FROM BEING A VALID CHARITY CIT V. ANDHRA CHAMBER OF COMMERCE [1965] 55 ITR 722 . THE TEST WHICH HAS, THEREFORE, TO BE APPLIED IS WHE THER THE OBJECT WHICH IS SAID TO BE NON-CHARITABLE IS A MAIN OR PRIMARY OBJECT OF THE TRUST OR INSTITUTION OR IT IS ANCILLARY OR INCIDENTAL TO THE DOMINANT OR PRIMARY OBJECT WHICH IS CHARITABLE. IT WAS ON AN APPLICATION OF THIS TEST T HAT IN CIT V. ANDHRA CHAMBER OF COMMERCE (SUPRA), THE ANDHRA CHAMBER OF COMMERCE WAS HELD TO BE A VALID CHARITY ENTITLED TO EXEMPTION FROM TAX. THE COURT HELD THAT THE DOMINANT OR PRIMARY OBJECT OF THE ANDHRA CHAMBER OF COMMERCE WAS TO PROMOTE AND PROTECT TRADE, COMMERCE AND INDUSTRY AND TO AID, STIMULATE AND PROMOTE THE DEVE LOPMENT OF TRADE, COMMERCE AND INDUSTRY AND TO WATCH OVER A ND PROTECT THE GENERAL COMMERCIAL INTERESTS OF INDIA O R ANY PART THEREOF AND THIS WAS CLEARLY AN OBJECT OF GENERAL P UBLIC UTILITY AND THOUGH ONE OF THE OBJECTS INCLUDED THE TAKING OF STEPS TO URGE OR OPPOSE LEGISLATION AFFECTING TRADE , COMMERCE 12 ITA NO. 6 352/DEL/2013 OR MANUFACTURE, WHICH, STANDING BY ITSELF, MAY BE L IABLE TO BE CONDEMNED AS NON-CHARITABLE, IT WAS MERELY INCID ENTAL TO THE DOMINANT OR PRIMARY OBJECT AND DID NOT PREVENT THE ANDHRA CHAMBER OF COMMERCE FROM BEING A VALID CHARI TY. THE COURT POINTED OUT THAT IF 'THE PRIMARY PURPOSE BE ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY, I T WOULD REMAIN CHARITABLE EVEN IF AN INCIDENTAL ENTRY INTO THE POLITICAL DOMAIN FOR ACHIEVING THAT PURPOSE, E.G., PROMOTION OF OR OPPOSITION TO LEGISLATION CONCERNING THAT PUR POSE, WAS CONTEMPLATED'. THE COURT ALSO HELD THAT THE ANDHRA CHAMBER OF COMMERCE DID NOT CEASE TO BE CHARITABLE MERELY BECAUSE THE MEMBERS OF THE CHAMBER WERE INCIDENTALL Y BENEFITED IN CARRYING OUT ITS MAIN CHARITABLE PURPO SE. THE COURT RELIED VERY STRONGLY ON THE DECISIONS IN COMM ISSIONER OF INLAND REVENUE V. YORKESHIRE AGRICULTURAL SOCIET Y [1920] 13 TAX CASE 58 AND INSTITUTION OF CIVIL ENGINEERS V . COMMISSIONER OF INLAND REVENUE [1931] 16 TAX CASE 1 58 FOR REACHING THE CONCLUSION THAT MERELY BECAUSE SOM E BENEFITS INCIDENTALLY AROSE TO THE MEMBERS OF THE S OCIETY OR INSTITUTION IN THE COURSE OF CARRYING OUT ITS MAIN CHARITABLE PURPOSE, IT WOULD NOT BY ITSELF PREVENT THE ASSOCIA TION OR INSTITUTION FROM BEING A CHARITY. IT WOULD BE A QUE STION OF FACT' IN SUCH CASE 'WHETHER THERE IS NO SUCH PERSON AL BENEFIT, INTELLECTUAL OR PROFESSIONAL, TO THE MEMBE RS OF THE SOCIETY OR BODY OF PERSONS AS TO BE INCAPABLE OF BE ING DISREGARDED. 17. THE RATIO LAID DOWN IN THE ABOVE CASES ARE THA T IN THE CASE OF AN ENTITY ORGANIZATION WHOSE OBJECTS ARE SEVERAL, S OME OF WHICH ARE CHARITABLE AND NON-CHARITABLE; THE TEST OF PREDOMIN ANT OBJECT FOR WHICH THE ORGANIZATION WAS SET UP IS ALONE TO BE AP PLIED. THEREFORE, IN THE PRESENT CASE, THE MAIN OBJECTIVE OF THE FEDE RATION IS TO PROMOTE FOOTBALL GAME, TO ORGANIZE TOURNAMENTS, TO ORGANIZE 13 ITA NO. 6 352/DEL/2013 TRAINING FOR PLAYERS, TRAINEES AND COACHES ETC THE PRIMARY OBJECT OF PROMOTING THE SPORT OF FOOTBALL BEING THE NATIONAL GAME, FALLS WITHIN THE AMBIT OF EXPRESSION EDUCATION AS DEFINED ABOV E, SINCE THE SAID ACTIVITY INVOLVE SYSTEMATIC INSTRUCTION, TRAINING G IVEN TO THE YOUNG. THEREFORE, THESE OBJECTS CAN BE SAID TO BE FOR ADVA NCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY, WHICH IS A FOURTH LIMB IN THE DEFINITION OF CHARITABLE PURPOSE IN SECTION 2(15) OF THE ACT. 17.1 THE PRINCIPLE ENUNCIATED BY HONBLE APEX COURT IN THE CASE OF ANDHRA CHAMBER OF COMMERCE REPORTED (SUPRA) HOLDS G OOD, WHEN AN OBJECT SEEKS TO PROMOTE OR PROTECT THE INTERESTS OF A PARTICULAR TRADE OR INDUSTRY, THAT OBJECT BECOMES AN OBJECT OF PUBLIC UTILITY , BUT NOT SO, IF IT SEEKS TO PROMOTE THE INTERESTS OF THOSE WHO CONDUCT THE SAID TRADE OR INDUSTRY. THE DISTINCTION BETWEEN THE PROTECTION OF THE INTERESTS OF INDIVIDUALS AND THE PROTECTION OF INTERESTS OF AN ACTIVITY WHICH IS OF GENERAL PUBLIC UTILITY GOES TO THE ROOT OF THE WHOLE PROBLEM AS LAID DOWN IN ANDHRA CHAMBER OF COMMERCE(SUPRA) AND BY HONBLE GUJARAT HIGH COURT I N THE CASE OF ADDL. CIT V. AHMADABAD MILL OWNERS ASSOCIATION, RE PORTED IN (1977) 106 ITR 725, 738 (GUJ)]. APPLYING THE RATIO LAID DO WN IN THE ABOVE CASES TO THE FACTS OF THE PRESENT CASE, WE HAVE NO DEMUR TO HOLD THAT THE OBJECTS OF THE RESPONDENT ASSESSEE ARE AIM ED AT IMPROVING FOOTBALL BEING THE NATIONAL GAME AND AIMING AT BUIL DING OF WORLD CLASS TEAMS HAVING INTERNATIONAL STANDARDS. THE QU ESTION OF PRIVATE GAIN OR PROFIT MOTIVE CANNOT BE ATTRIBUTED TO THE R ESPONDENT ASSESSEE BEING A FEDERATION WHICH PROMOTES FOOTBALL IN ASSOCIATION WITH FIFA. THEREFORE, UNDOUBTEDLY, THE OBJECTS OF T HE TRUST FALL 14 ITA NO. 6 352/DEL/2013 WITHIN THE AMBIT AND SCOPE OF THE EXPRESSION GENER AL PUBLIC UTILITY SERVICES, WHICH IS A FOURTH LIMB OF DEFINITION OF WORD CHARITABLE AS DEFINED UNDER SECTION 2(15) OF THE ACT. 18. A REFERENCE CAN BE MADE TO THE FOLLOWING EXTRAC T FROM THE SPEECH OF THE MINISTER OF FINANCE ON 29.02.2008: . '180. 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND ANY OTHER OBJECT OF G ENERAL PUBLIC UTILITY. THESE ACTIVITIES ARE TAX EXEMPT, AS THEY SHOULD BE. HOWEVER, SOME ENTITIES CARRYING ON REGUL AR TRADE, COMMERCE OR BUSINESS OR PROVIDING SERVICES I N RELATION TO ANY TRADE COMMERCE OR BUSINESS AND EARN ING INCOME HAVE SOUGHT TO CLAIM THAT THEIR PURPOSE WOUL D ALSO FALL UNDER 'CHARITABLE PURPOSE'. OBVIOUSLY, THIS WA Y NOT THE INTENTION OF PARLIAMENT AND, HENCE, I PROPOSE T O AMEND THE LAW TO EXCLUDE THE AFORESAID CASES. GENUI NE CHARITABLE ORGANIZATIONS WILL NOT IN ANY WAY BE AFF ECTED.' 19. FURTHER REFERENCE CAN BE MADE TO THE REPLY OF T HE HONBLE FINANCE MINISTER TO THE DEBATE IN THE LOK SABHA ON THE FINANCE BILL, 2008: '6. CLAUSE 3 OF THE FINANCE BILL, 2008 SEEKS TO AME ND THE DEFINITION OF 'CHARITABLE PURPOSE' SO AS TO EXCLUDE ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION T O ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR A NY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OR USE OF APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. THE INTENTION IS TO LIMIT THE BENEFIT TO ENTITIES W HICH ARE ENGAGED IN ACTIVITIES SUCH AS RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF AND ANY OTHER GENUINE CHARITABLE PUR POSE, AND TO DENY IT TO PURELY COMMERCIAL AND BUSINESS EN TITIES WHICH WEAR THE MASK OF A CHARITY. A NUMBER OF HONB LE MEMBERS HAVE WRITTEN TO ME EXPRESSING THEIR CONCERN ON THE POSSIBLE IMPACT OF THE PROPOSAL ON AGRICULTURAL PRODUCE MARKET COMMITTEES (APMC) OR STATE AGRICULTURAL MARK ETING 15 ITA NO. 6 352/DEL/2013 BOARDS (SAMB). SINCE THERE IS NO INTENTION TO TAX S UCH COMMITTEES OR BOARDS, AND IN ORDER TO REMOVE ANY DO UBTS, I PROPOSE TO INSERT A NEW CLAUSE (26AAB) IN SECTION 10 OF THE INCOME TAX ACT TO PROVIDE EXEMPTION TO ANY INCO ME OF AN APMC OR SAMB CONSTITUTED UNDER ANY LAW FOR THE T IME BEING IN FORCE FOR THE PURPOSE OF REGULATING THE MA RKETING OF AGRICULTURAL PRODUCE. I ONCE AGAIN ASSURE THE HO USE THAT GENUINE CHARITABLE ORGANIZATIONS WILL NOT IN ANY WA Y BE AFFECTED. THE CBDT WILL, FOLLOWING THE USUAL PRACTI CE, ISSUE AN EXPLANATORY CIRCULAR CONTAINING GUIDELINES FOR DETERMINING WHETHER AN ENTITY IS CARRYING ON ANY AC TIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO AN Y TRADE, COMMERCE OR BUSINESS. WHETHER THE PURPOSE IS A CHAR ITABLE PURPOSE WILL DEPEND ON THE TOTALITY OF THE FACTS OF THE CASE. ORDINARILY, CHAMBERS OF COMMERCE AND SIMILAR ORGANIZATIONS RENDERING SERVICES TO THEIR MEMBERS W OULD NOT BE AFFECTED BY THE AMENDMENT AND THEIR ACTIVITI ES WOULD CONTINUE TO BE REGARDED AS 'ADVANCEMENT OF AN Y OTHER OBJECT OF GENERAL PUBLIC UTILITY.' (EMPHASIS SUPPLIED) 20. A RECENT DECISION DEALS SPECIFICALLY WITH THE N EWLY AMENDED SECTION 2(15) OF THE ACT, IN THE CASE OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA V. DIRECTOR GENERAL OF INCOME- TAX (EXEMPTIONS) [2012] 347 ITR 99/202 TAXMAN 1/13 TAXMANN.COM 175 D ELHI HC, LAYING DOWN THE VERY SAME PRINCIPLE HELD AS UNDER: 'THAT THE FUNDAMENTAL OR DOMINANT FUNCTION OF THE I NSTITUTE WAS TO EXERCISE OVERALL CONTROL AND REGULATE THE AC TIVITIES OF THE MEMBERS/ENROLLED CHARTERED ACCOUNTANTS. A VERY NARROW VIEW HAD BEEN TAKEN THAT THE INSTITUTE WAS H OLDING COACHING CLASSES AND THAT THIS AMOUNTED TO BUSINESS . 21. HONBLE DELHI HIGH COURT IN THE CASE OF BUREAU OF INDIAN STANDARDS VS. DIRECTOR GENERAL OF INCOME-TAX (EXEMP TIONS) (2013) 358 ITR 78 HELD AS FOLLOWS VIDE PARA 16 OF THE JUDG MENT : 16 ITA NO. 6 352/DEL/2013 16. WHAT SURVIVES TO BE DETERMINED IS WHETHER ANY OF BIS'S ACTIVITIES FALL WITHIN THE LATTER AND LARGER CATEGORY OF 'INVOLVED IN THE CARRYING ON OF ANY ACTIVITY OF REN DERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS'. THE EXPRESSIONS 'ANY ACTIVITY,' 'RENDERING ANY SERVICE' AND 'IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS' IMPLY THAT THE INTENTION OF THE LEGISLATURE WAS TO MAKE THE LATTER PART OF THE EXCEPTION BROAD AND INCLUSIVE. IT SEEMS THAT TH E EXCEPTION (THE FIRST PROVISO) IS INTENDED TO CATCH WITH ITS AMBIT ANY AND ALL COMMERCIAL ACTIVITY, EXCEPT WHAT FALLS WITHIN THE SECOND PROVISO (WHICH BARS APPLICATION O F THE EXCEPTION IN CASES WHERE THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES MENTIONED THEREIN IS L ESS THAN TEN LAKH RUPEES IN THE RELEVANT PREVIOUS YEAR). THE BUREAU, IT WOULD APPEAR AT THE FIRST BLUSH, RENDERS SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS BY GRANTING CERTIFICATION/QUALITY MARKS IN RETURN OF LICENSE FE E. APPARENTLY, PARLIAMENT INTENDED TO CLARIFY THAT NOT ALL ACTIVITIES OF STATE AGENCIES (SOME OF WHICH MIGHT B E SET UP TO CARRY ON TRADING AND COMMERCIAL ACTIVITIES) CAN BE CONSIDERED CHARITABLE. HONBLE DELHI HIGH COURT IN THE CASE OF GSI INDIA VS. DIRECTOR GENERAL OF INCOME-TAX (EXEMPTION) & ANR. [2014] 360 ITR 138 HELD VIDE PARA 36 OF THE JUDGMENT AS UNDER: .THE OBJECT OF THE PROVISO IS TO DRAW A DISTINCT ION BETWEEN CHARITABLE INSTITUTIONS COVERED BY THE LAST LIMB WHICH CONDUCT BUSINESS OR OTHERWISE BUSINESS ACTIVI TIES ARE UNDERTAKEN BY THEM TO FEED CHARITY. THE PROVISO APPLIES WHEN BUSINESS WAS/IS CONDUCTED AND THE QUANTUM OF RECEIPTS EXCEEDS THE SPECIFIED SUM. THE PROVISO DOES NOT SEEK TO DISQUALIFY CHARITABLE ORGANIZATION COVERED BY THE LAST LIMB, WHEN A TOKEN FEE IS COLLECTED FROM THE BENEFICIARIES IN THE COURSE O F ACTIVITY 17 ITA NO. 6 352/DEL/2013 WHICH IS NOT A BUSINESS BUT CLEARLY CHARITY FOR WHI CH THEY ARE ESTABLISHED AND THEY UNDERTAKE. HONBLE DELHI HIGH COURT IN THE CASE OF INDIA TRADE PROMOTION ORGANIZATION VS. DIRECTOR GENERAL OF INCOME-TAX (EX EMPTIONS) & ORS. [2015] 371 ITR 333, HELD VIDE PARA 58 AS FOLLO WS:- 58. IN CONCLUSION, WE MAY SAY THAT THE EXPRESSION 'CHARITABLE PURPOSE', AS DEFINED IN SECTION 2(15) C ANNOT BE CONSTRUED LITERALLY AND IN ABSOLUTE TERMS. IT HAS T O TAKE COLOUR AND BE CONSIDERED IN THE CONTEXT OF SECTION 10(23C)(IV) OF THE SAID ACT. IT IS ALSO CLEAR THAT IF THE LITERAL INTERPRETATION IS GIVEN TO THE PROVISO TO SECTION 2 (15) OF THE SAID ACT, THEN THE PROVISO WOULD BE AT RISK OF RUNN ING FOWL OF THE PRINCIPLE OF EQUALITY ENSHRINED IN ARTICLE 1 4 OF THE CONSTITUTION OF INDIA. IN ORDER TO SAVE THE CONSTIT UTIONAL VALIDITY OF THE PROVISO, THE SAME WOULD HAVE TO BE READ DOWN AND INTERPRETED IN THE CONTEXT OF SECTION 10(2 3C)(IV) BECAUSE, IN OUR VIEW, THE CONTEXT REQUIRES SUCH AN INTERPRETATION. THE CORRECT INTERPRETATION OF THE P ROVISO TO SECTION 2(15) OF THE SAID ACT WOULD BE THAT IT CARV ES OUT AN EXCEPTION FROM THE CHARITABLE PURPOSE OF ADVANCEMEN T OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND THAT EXCEPTION IS LIMITED TO ACTIVITIES IN THE NATURE OF TRADE, CO MMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE I N RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS OR FE E OR ANY OTHER CONSIDERATION. IN BOTH THE ACTIVITIES, IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR THE ACTIVITY OF REND ERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS, THE DOMINANT AND THE PRIME OBJECTIVE HAS TO BE SEEN . IF THE DOMINANT AND PRIME OBJECTIVE OF THE INSTITUTION, WH ICH CLAIMS TO HAVE BEEN ESTABLISHED FOR CHARITABLE PURP OSES, IS PROFIT MAKING, WHETHER ITS ACTIVITIES ARE DIRECTLY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR INDIRECTLY IN THE RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THEN IT WOULD NOT BE ENTITLED TO CLAIM ITS OBJECT TO BE A 'CHARITABLE PURPOSE'. ON THE FLIP SIDE, WHE RE AN INSTITUTION IS NOT DRIVEN PRIMARILY BY A DESIRE OR MOTIVE TO 18 ITA NO. 6 352/DEL/2013 EARN PROFITS, BUT TO DO CHARITY THROUGH THE ADVANCE MENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, IT CANNOT BUT BE REGARDED AS AN INSTITUTION ESTABLISHED FOR CHARITABLE PURPOS ES. 22. FURTHER IT CANNOT BE CONSTRUED THAT THE APPELLA NT IS ACTIVELY INVOLVED IN RAISING THE SPONSORSHIP FEES AND FEES F ROM THE TELECASTING RIGHTS. THE ONLY ACTIVITY OF THE RESPON DENT IS DEVELOPMENT AND PROMOTION OF FOOTBALL AT THE NATION AL LEVEL WHICH DOES NOT CONSTITUTE ANY COMMERCIAL ACTIVITY. IN TH E CASE OF INDIAN TRADE PROMOTION ORGANIZATION REPORTED IN (2015) 53 TAXMANN.COM 404, HONBLE DELHI TRIBUNAL HAS HELD AS UNDER: 53. FROM THE SAID DECISION, IT IS APPARENT THAT MERELY BECAUSE A FEE OR SOME OTHER CONSIDERATION IS COLLECTED OR RECEIVED BY AN INSTITUTION, IT WOULD N OT LOSE ITS CHARACTER OF HAVING BEEN ESTABLISHED FOR A CHARITABLE PURPOSE. IT IS ALSO IMPORTANT TO NOTE T HAT WE MUST EXAMINE AS TO WHAT IS THE DOMINANT ACTIVITY OF THE INSTITUTION IN QUESTION. IF THE DOMINANT ACTIV ITY OF THE INSTITUTION WAS NOT BUSINESS, TRADE OR COMMERCE , THEN ANY SUCH INCIDENTAL OR ANCILLARY ACTIVITY WOUL D ALSO NOT FALL WITHIN THE CATEGORIES OF TRADE, COMME RCE OR BUSINESS. IT IS CLEAR FROM THE FACTS OF THE PRE SENT CASE THAT THE DRIVING FORCE IS NOT THE DESIRE TO EA RN PROFITS BUT, THE OBJECT OF PROMOTING TRADE AND COMMERCE NOT FOR ITSELF, BUT FOR THE NATION BOTH WITHIN INDIA AND OUTSIDE INDIA. CLEARLY, THIS IS A CHARIT ABLE PURPOSE, WHICH HAS AS ITS MOTIVE THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY TO WHICH THE EXCEPTION CARVED OUT IN THE FIRST PROVISO TO SECTIO N 2(15) OF THE SAID ACT WOULD NOT APPLY. 23. THE RATIO LAID DOWN BY DELHI TRIBUNAL IN THE CA SE OF DELHI AND DISTRICT CRICKET ASSOCIATION VS. DIT(E), REPORTED I N 38 ITR(TRIB.) 326(ITAT DEL) IS UNDER; 19 ITA NO. 6 352/DEL/2013 THUS RESPECTFULLY FOLLOWING THE DECISION OF THE HO N'BLE MADRAS HIGH COURT IN THE CASE OF TAMIL NADU CRICKET ASSOCIATION [2014] 360 ITR 633 (MAD), WE HAVE TO HOLD THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM (A) GROUND BOOKING CHARGES, (B) HEALTH CLUB CHARGES, (C) INCOM E FROM CORPORATE BOXES, (D) LAWN BOOKING INCOME, (E) SPONS ORSHIP MONEY AND SALE OF TICKETS, ADVERTISEMENT, SOUVENIRS AND OTHER SUCH RECEIPTS DO NOT RESULT IN THE ASSESSEE B EING HELD AS UNDERTAKING ACTIVITIES IN THE NATURE OF 'TR ADE, COMMERCE OR BUSINESS'. THESE RECEIPTS ARE INTRINSIC ALLY RELATED, INTERCONNECTED AND INTERWOVEN WITH THE CHA RITABLE ACTIVITY AND CANNOT BE VIEWED SEPARATELY. THE ACTIV ITIES RESULTING IN THE SAID RECEIPTS ARE ALSO CHARITABLE ACTIVITIES AND NOT 'TRADE, COMMERCE OR BUSINESS' ACTIVITIES. CHENNAI BENCH OF ITAT IN THE CASE OF HAMSADHWANI VS . DIT(EXM.) REPORTED IN (2012) 19 TAXMANN.COM 10 HELD AS UNDER; NO DOUBT, IT HAS BEEN SPECIFICALLY PROVIDED IN THE FIRST PROVISO THAT ADVANCEMENT OF ANY OTHER OBJECT OF GEN ERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS, OR RENDERING ANY SERVICE IN CONNECTION WITH TRADE, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION. THE THIRD P ROVISO EXCLUDES FROM THE RESTRAINTS IMPOSED BY FIRST PROVI SO, WHERE SUCH RECEIPTS WERE LESS THAN RS. 10 LAKHS. TH E QUESTION HERE IS WHETHER SPONSORSHIP FEE, WHICH FOR MS SUBSTANTIAL PART OF THE AMOUNTS LISTED ABOVE, CAN B E CONSIDERED AS RECEIPT FROM ACTIVITY IN THE NATURE O F TRADE, COMMERCE AND BUSINESS. IN OUR OPINION, ADVANCEMENT OF TRADITIONAL MUSICAL CULTURE OF TAMIL NADU AND CONDU CTING MUSIC PROGRAMMES FOR THAT PURPOSE, WHERE SUCH MUSIC AND DANCE PROGRAMMES WERE SPONSORED BY VARIOUS PERSONS AND SPONSORSHIP FEE SO RECEIVED, DISTRIBUTE D AMONG THE ARTISTS, CAN NEVER BE CONSIDERED AS AN AC TIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. WHEN A PERSON SPONSORS A MUSIC PROGRAMME AND SPONSORSHIP F EE IS PAID TO ARTIST CONCERNED, WE CANNOT SAY THAT SPONSORSHIP FEE IS A RECEIPT IN THE HANDS OF THE AS SESSEE 20 ITA NO. 6 352/DEL/2013 WHICH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS. SIMILARLY, CONDUCTING MUSIC COACHING FOR THE PURPOS E OF ADVANCEMENT OF VARIOUS TRADITIONAL MUSIC FORMS OF S TATE OF TAMIL NADU, WHICH IS AN INTEGRAL PART OF CULTURAL L IFE OF PEOPLE OF TAMIL NADU, CANNOT ALSO BE CONSIDERED TO BE AN ACTIVITY IN THE NATURE OF TRADE, COMMERCE AND BUSIN ESS. THIS CAN AT THE BEST BE CONSIDERED AS AN EDUCATIONA L PURSUIT. WHEN THERE ARE COLLEGES RUN FOR COACHING M USIC, WE CANNOT SAY THAT TRAINING IMPARTED IN MUSIC IS NO T EDUCATION. IN OUR OPINION, THE LD. DIT(E) TOOK A VE RY NARROW VIEW IN THIS REGARD AND CAME TO A CONCLUSION THAT T HE SPONSORSHIP FEE AND MUSIC COACHING FEE RECEIVED BY THE ASSESSEE WERE FROM THE ACTIVITY IN THE NATURE OF TR ADE, COMMERCE OR BUSINESS. ASSESSEE, IN OUR OPINION, WAS NOT CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, CO MMERCE OR BUSINESS BUT WAS CARRYING ON ITS AVOWED OBJECT O F ADVANCEMENT OF FINE ARTS AND TRADITIONAL ART FORMS, WHICH CANNOT BE CONSIDERED AS A COMMERCIAL OR BUSINESS AC TIVITY. 24. THE DELHI HIGH COURT, IN THE CASE OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA V. DGIT (EXEMPTIONS) [2012] 347 ITR 99/[2011] 202 TAXMAN 1/13TAXMANN.COM 175 CONCURRED WITH THE VIEW TAKEN IN THE ABOVE DECISION AND OBSERVED AS UNDER: (A) THE ACTIVITIES UNDERTAKEN BY THE INSTITUTION AMOUNT ED TO ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTIL ITY IN THE DEFINITION OF CHARITABLE PURPOSE IN SECTION 2(15) O F THE ACT. CHARGING OF AMOUNTS FROM THE GOVERNMENT BODIES FOR UNDERTAKING THESE RESEARCH PROJECTS WOULD NOT MAKE THE ACTIVITY COMMERCIAL. THE PROJECTS WERE UNDERTAKEN AT THE INSTANCE OF THE GOVERNMENT OF INDIA OR THE STATE GO VERNMENTS FOR IMPROVING THE ACCOUNTING AND BUDGETARY SYSTEMS IN THESE LOCAL BODIES. THE EXPERTISE OF THE FOUNDATION IN CA RRYING OUT RESEARCH IN THIS FIELD WAS SOUGHT TO BE UTILIZED. T HEREFORE, IT COULD NOT CONSTITUTE BUSINESS/COMMERCIAL ACTIVITY. MERELY BECAUSE SOME REMUNERATION WAS TAKEN BY THE FOUNDATI ON FOR UNDERTAKING THESE PROJECTS THAT WOULD NOT ALTER THE CHARACTER OF THESE PROJECTS, WHICH REMAINED RESEARCH AND CONS ULTANCY 21 ITA NO. 6 352/DEL/2013 WORK. MOST OF THE AMOUNT RECEIVED QUA THESE PROJECT S WAS SPENT ON THE PROJECT AND THE SURPLUS, IF ANY, IS US ED FOR ADVANCEMENT OF THE OBJECTIVES FOR WHICH THE FOUNDAT ION WAS ESTABLISHED. (B) THE PROJECTS UNDERTAKEN ON BEHALF OF THESE LOC AL BODIES WERE NOT A REGULAR ACTIVITY OF THE FOUNDATION. THE PRIMARY ACTIVITY REMAINED RESEARCH IN ACCOUNTING RELATED FI ELDS. EVEN THESE PROJECTS WHICH WERE TAKEN UP ON BEHALF OF THO SE LOCAL BODIES FIT IN THE DESCRIPTION OF RESEARCH PROJECTS WHICH COULD BE TERMED ANCILLARY ACTIVITY ONLY. (C) THE AMENDED DEFINITION OF CHARITABLE PURPOSE WOULD NOT ALTER THIS POSITION. MERELY ON UNDERSTANDING THOSE THREE RESEARCH PROJECTS AT THE INSTANCE OF THE GOVERNMENT /LOCAL BODIES THE ESSENTIAL CHARACTER OF THE FOUNDATION CO ULD NOT BE CONVERTED INTO THE ONE WHICH CARRIES ON TRADE, COMM ERCE OR BUSINESS OR ACTIVITY OF RENDERING ANY SERVICE IN RE LATION TO TRADE, COMMERCE OR BUSINESS. 24.1 CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE O F HIMACHAL PRADESH ENVIRONMENT PROTECTION & POLLUTION CONTROL BOARD V. CIT [2010] 42 SOT 343 , WHEREIN THE TRIBUNAL HELD THAT PROVISO TO S. 2(15) DOES NOT IMPLY THAT IN EACH AND EVERY CASE WH ERE AN ASSESSEE RECEIVES PAYMENT FOR ANY ACTIVITY, NOT BEING ACTIVI TY FOR TRADE, COMMERCE OR BUSINESS, THE SAME WOULD BE HIT BY THE SAID PROVISO. ACCORDING TO THE TRIBUNAL, IN ACCORDANCE WITH CBDT CIRCULAR NO.11 DATED 19.12.2008 (221 CTR (ST.)1), THE PROVISO APPL IES ONLY WHERE THE OBJECT OF GENERAL PUBLIC ACTIVITY IS A MASK OR DEVICE TO HIDE THE TRUE PURPOSE OF TRADE, BUSINESS OR COMMERCE, OR REN DERING OF ANY SERVICE IN RELATION THERETO, IN OTHER WORDS, THE TR IBUNAL HELD THAT THE PROVISO DOES NOT APPLY TO CASES WHERE THE SERVI CES RENDERED ARE PURELY INCIDENTAL TO OR SUBSERVIENT TO THE MAIN OBJ ECTIVE OF 'GENERAL PUBLIC UTILITY'. 22 ITA NO. 6 352/DEL/2013 24.2 THE RELEVANT OBSERVATIONS OF THE TRIBUNAL READ AS UNDER: 14. AS THE ABOVE CBDT CIRCULAR, WHICH IS BINDING O N THE COMMISSIONER UNDER SECTION 119(1)(A) OF THE ACT, AP TLY PUTS IT, WHETHER THE ASSESSEE HAS, AS ITS OBJECT, ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY IS ESSENTIALLY A QUESTION OF LAW TO BE DECIDED ON T HE FACTS OF THE ASSESSEE'S OWN CASE AND WHERE OBJECT OF GENE RAL PUBLIC ACTIVITY IS ONLY A MASK OR DEVICE TO HIDE TH E TRUE PURPOSE OF TRADE, BUSINESS OR COMMERCE, OR RENDERIN G OF ANY SERVICE IN RELATION THERETO, THE ASSESSEE CANNO T BE SAID TO BE ENGAGED IN CHARITABLE ACTIVITY WITHIN ME ANINGS OF SECTION 2(15) OF THE ACT. AS A COROLLARY TO THIS APPROACH ADOPTED BY TAX ADMINISTRATION, IN OUR CONSIDERED VI EW, IT CANNOT BE OPEN TO LEARNED COMMISSIONER TO CONTEND T HAT WHERE AN OBJECT OF GENERAL PUBLIC UTILITY IS NOT ME RELY A MASK TO HIDE TRUE PURPOSE OR RENDERING OF ANY SERVI CE IN RELATION THERETO, AND WHERE SUCH ' SERVICES ARE BEI NG RENDERED AS PURELY INCIDENTAL TO OR AS SUBSERVIENT TO THE MAIN OBJECTIVE OF 'GENERAL PUBLIC UTILITY', THE CAR RYING ON OF BONA FIDE ACTIVITIES IN FURTHERANCE OF SUCH OBJECTI VES OF 'GENERAL PUBLIC UTILITY' WILL ALSO BE HIT BY THE PR OVISO TO SECTION 2(15). 15. AS CBDT RIGHTLY PUTS IT, SWEEPING 'GENERALIZATI ONS ARE NOT POSSIBLE' AND 'EACH CASE WILL HAVE TO BE DE CIDED ON ITS FACTS'. THE QUESTION THEN ARISES WHETHER ON THE PRESENT SET OF FACTS IT CAN BE SAID THAT THE ASSESS EE WAS ENGAGED IN TRADE, COMMERCE OR BUSINESS OR IN RENDER ING OF A SERVICE TO TRADE, COMMERCE OR BUSINESS. AS FAR AS ASSESSEE BEING ENGAGED IN TRADE, COMMERCE OR BUSINE SS IS CONCERNED, IT IS NOT EVEN LEARNED COMMISSIONER'S CASE THAT RUNNING A ORGANIZATION, SET UP UNDER THE STATU TE LAW, FOR CONTROLLING, PREVENTING AND ABATING POLLUTION, IS PURSUING TRADE, COMMERCE OR BUSINESS. OBVIOUSLY, A TRADE, COMMERCE OR BUSINESS IMPLIES AN ACTIVITY WIT H PROFIT MOTIVE EVEN THOUGH PUBLIC GOOD MAY BE A SECONDARY BENEFIT FROM SUCH AN ACTIVITY. THAT IS NO T THE CASE BEFORE US. THE LEGAL FRAMEWORK UNDER WHICH THE ASSESSEE IS SET UP IS QUITE CLEAR AND UNAMBIGUOUS A ND IT 23 ITA NO. 6 352/DEL/2013 REFLECTS WILL OF THE LAWMAKERS IN NO UNCERTAIN TERM S, WHICH IS TO PREVENT POLLUTION. 16. THE NEXT QUESTION IS WHETHER THE LEARNED COMMISSIONER IS JUSTIFIED IN TAKING A STAND THAT TH E ASSESSEE 'EARNING INCOME OVER THE YEARS IN THE NATU RE OF LICENCE FEES, CONSENT FEES, TESTING CHARGES ETC' AN D 'SINCE THE BASIC OBJECTIVE OF THE PROTECTION OF ENVIRONMEN T PURSUED BY THE BOARD INVOLVES THE CARRYING ON OF SU CH ACTIVITIES AND THE EARNING OF SUCH INCOME', THE ASS ESSEE IS HIT BY SECOND LIMB OF PROVISO TO SECTION 2(15) I .E. 'RENDERING OF SERVICE TO TRADE, COMMERCE OR BUSINES S'. IT IS IMPORTANT TO BEAR IN MIND THE FACT THE EXPRESSIO NS 'RENDERING OF ANY SERVICE TO BUSINESS, TRADE OR COM MERCE' ARE USED IN CONJUNCTION WITH THE WORDS 'BUSINESS, T RADE OR COMMERCE' AND, THEREFORE, FOLLOWING THE PRINCIPL ES OF NOSCITER O SOCCIS, WE MUST INTERPRET THESE TWO EXPRESSIONS IN THEIR COGNATE SENSE AND AS IF THEY T AKE COLOUR FROM EACH OTHER. BROOM'S LEGAL MAXIMS (10TH EDITION) OBSERVES THAT ' IT IS A RULE LAID DOWN BY LORD BACON THAT COPULATION VERBORUM INDICAT ACCEPETATION EM IN EODEM SENSU I.E. THE COUPLING OF WORDS THAT THEY ARE TO BE UNDERSTOOD IN THE SAME SENSE.' A PROFIT MOTIVE I S SURELY THE ESSENCE OF TRADE, COMMERCE OR BUSINESS, AND, THEREFORE, IN A SITUATION IN WHICH SERVICES ARE REN DERED WITHOUT A PROFIT MOTIVE, SUCH RENDERING OF SERVICE WILL NOT HAVE ANYTHING IS COMMON WITH TRADE, BUSINESS OR COMMERCE. THE APPLICATION OF THE PRINCIPLE OF NOSCI TOR O SOCIIS, THEREFORE, WILL REQUIRE THAT IN ORDER TO IN VOKE SECOND LIMB OF EXPLANATION TO SECTION 2(15), 'RENDE RING OF SERVICE TO TRADE, COMMERCE OR BUSINESS' MUST BE SUC H THAT IT HAS A PROFIT MOTIVE. (EMPHASIS SUPPLIED) HYDERABAD TRIBUNAL IN THE CASE OF IDRBT VS. ASST.D IT(E), REPORTED IN 42 ITR (TRIB.) 219 HAS TAKEN AN SIMILAR VIEW AND HELD AS UNDER; THE RATIONAL THAT CAN BE CULLED OUT FROM THE ABOVE DECISIONS IS THAT ONCE THE PRIMARY OBJECTS OF AN INSTITUTION ARE 24 ITA NO. 6 352/DEL/2013 ESTABLISHED TO BE IN THE NATURE OF CHARITY, THEN TH E PROVISO TO SECTION 2(15) OF THE ACT CANNOT BE MADE APPLICAB LE. IN OTHER WORDS, THE EXISTENCE OF THE PROVISO IN SUBSTA NCE WILL NOT MAKE ANY DIFFERENCE. THE PROVISO WILL HIT ONLY SUCH CASES WHERE THE ENTITY OR ORGANIZATION IS CARRYING ON BUSINESS ACTIVITY WITH A PROFIT MOTIVE IN THE GARB OF CHARITABLE PURPOSE. IT WILL NOT HOWEVER AFFECT THE CASE OF INSTITUTION WHICH ARE GENUINELY CARRYING ON CHARITA BLE ACTIVITIES. THE WORDS USED BY THE LEGISLATURE IN TH E PROVISO IN THE NATURE OF TRADE, COMMERCE OR BUSINESS'. IF WE GIVE DUE IMPORTANCE TO THE ABOVE MENTIONED WORDS, THE ON LY CONCLUSION WILL BE THAT THE PROVISO WILL EFFECT ONL Y SUCH CASES WHERE THE ACTIVITIES OF A CHARITABLE INSTITUT ION CAN BE CONSIDERED TO BE IN THE NATURE OF TRADE, COMMERCE O R BUSINESS. IN FACT, THE SAME CONTROVERSY, WHICH HAS BEEN THERE IN THE PAST, WHETHER A CHARITABLE INSTITUTION IS CARRYING ON THE ACTIVITIES ONLY OF CHARITABLE NATUR E OR IS CARRYING ON ACTIVITIES WHICH ARE IN THE NATURE OF B USINESS, IS EMERGING FROM THIS PROVISO ALSO. IN OTHER WORDS, THE PROVISO WILL NOT GIVE RISE TO ANY NEW CONTROVERSY W HICH HAD NOT BEEN IN THE PAST. THE FURTHER WORDS USED IN THE PROVISO, THAT FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, HAVE TO BE READ ALONG WITH THE NATURE OF ACTIVITIES, I.E., TRA DE, COMMERCE OR BUSINESS. WHEN AN INSTITUTION IS CARRYI NG ON ACTIVITIES IN THE NATURE OF TRADE, , COMMERCE OR BU SINESS OBVIOUSLY IT WILL BE CHARGING FEE, ETC. IT MAY BE C HARGING FEE EVEN WHEN RENDERING/PROVIDING SERVICES AS PART OF CHARITABLE ACTIVITY IN ORDER TO SUPPLEMENT ITS INCO ME FOR CARRYING ON CHARITABLE ACTIVITIES. IN THAT CASE THE PROVISO WILL NOT HAVE ANY IMPLICATION AS THE ACTIVITIES WOU LD NOT BE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. ACCOR DINGLY, THE PROVISO INSERTED IN THE DEFINITION OF 'CHARITAB LE PURPOSE' WILL NOT SUBSTANTIALLY HAVE ANY IMPACT ON THE MEANI NG OF CHARITABLE PURPOSE. 25. IN VIEW OF THE ABOVE DISCUSSION AND JUDICIAL PR ONOUNCEMENTS, WHAT NEEDS TO BE EMPHASIZED IS WHETHER THE RECEIP T OF AMOUNTS BY WAY OF SPONSORSHIP FROM VARIOUS PARTIES WOULD MA KE THE ACTIVITY 25 ITA NO. 6 352/DEL/2013 COMMERCIAL AS HELD BY THE ASSESSING OFFICER. THE MERE FACT THAT THE APPELLANT SOCIETY HAD GENERATED SPONSORSHIP FUN DS, DURING THE COURSE OF CARRYING ON THE ANCILLARY OBJECTS, SHALL NOT ALTER THE CHARACTER OF THE MAIN OBJECTS SO LONG AS THE PREDOM INANT OBJECT CONTINUES TO BE CHARITABLE AND NOT TO EARN THE PROF IT. 25.1 THEREFORE, WE HOLD THAT THE RESPONDENT ASSESSE E IS ENTITLED TO EXEMPTION OF INCOME UNDER THE PROVISION OF SECTION 11 OF THE ACT. FURTHER THE PROVISO TO SECTION 2(15) OF THE ACT CAN NOT BE APPLIED TO THE APPELLANT SOCIETY AS IT IS NOT ENGAGED IN ANY A CTIVITY WHICH IS IN THE NATURE OF TRADE, COMMERCE AND BUSINESS. ACCORDI NGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE EXEMPTION UNDER THE PROVISIONS OF SEC. 11 OF THE ACT. 26. WE THEREFORE DISMISS THIS GROUND OF REVENUE. 27. GROUND NO. 2 IS RELATING TO THE DISALLOWANCE OF DEPRECIATION. THE LD. DR CONTENDED THAT THE RESPON DENT ASSESSEE HAS CLAIMED DOUBLE DEDUCTION OF DEPRECIATION IN THE FORM OF APPLICATION OF INCOME AT THE TIME OF PURCHASE OF FI XED ASSETS AND BY WAY OF CLAIMING DEPRECIATION AS AMORTIZATION OF WDV . THE LD. DR SUPPORTED THE FINDINGS OF THE LD. AO IN THE ASSESSM ENT ORDER. THE LD. AR SUBMITTED THAT THE RESPONDENT ASSESSEE I S NOT MAKING ANY DOUBLE CLAIM OF DEPRECIATION. THE INCOME OF APP ELLANT IS ALREADY EXEMPT AND THE APPELLANT IS ONLY CLAIMING THAT THE DEPRECIATION SHOULD BE REDUCED FROM THE INCOME FOR THE PERCENTAG E OF FUNDS WHICH HAVE TO BE APPLIED FOR THE PURPOSES OF THE TR UST. THEREFORE, 26 ITA NO. 6 352/DEL/2013 THERE IS NO DOUBLE DEDUCTION CLAIMED BY THE RESPOND ENT ASSESSEE AS CANVASSED BY THE LD. AO. 28. FOR THE ABOVE PROPOSITION, THE LD. AR RELIES ON THE DECISION OF; A) PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. TINY TOTS EDUCATION SOCIETY IN ITA NO. 93/2010. B) HONBLE DELHI HIGH COURT IN THE CASE OF DIT(E) VS. M/S INDRAPRASTHA CANCER SOCIETY IN ITA NO. 384/2014, 46 3/2014, 464/2014 DATED 18/11/2014. C) WE HAVE PERUSED THE RECORDS, ORDER PASSED BY THE AU THORITIES BELOW AND THE JUDGMENTS RELIED UPON BY THE PARTIES. THE INCOME OF THE RESPONDENT ASSESSEE IS ALREADY EXEMPT AND TH E RESPONDENT ASSESSEE IS ONLY CLAIMING THAT DEPRECIAT ION SHOULD BE REDUCED FROM THE INCOME FOR THE PERCENTAGE OF FU NDS WHICH HAVE TO BE APPLIED FOR THE PURPOSE OF TRUST. THE J UDGMENTS RELIED UPON BY THE APPELLANT AND PUNJAB & HARYANA H IGH COURT AND JURISDICTIONAL HIGH COURT COVERS THE ISSUE AT L ENGTH. THE HONBLE HIGH COURT IN THE CASE OF DIT(E) VS. M/S IN DIAN TRADE PROMOTION ORGANISATION REPORTED IN (2015) 53 TAXMAN .COM 404 (DEL, HELD THAT: APPLICATION OF INCOME MAY INCLUDE PURCHASE OF A CA PITAL ASSET. THE SAID PURCHASE IS VALID AND TAKEN INTO CONSIDERATION FOR THE PURPOSE FOR ENSURING COMPLIAN CE, I.E. APPLICATION OF MONEY OR FUNDS AND IS NOT A FACTOR W HICH DETERMINES AND DECIDES THE QUANTUM OF INCOME DERIVE D FROM PROPERTY HELD UNDER TRUST. COMPUTATION OF INC OME IS SEPARATE AND DISTINCT AND HAS TO BE MADE ON COMMERC IAL BASIS BY APPLYING THE PROVISIONS OF THE ACT. 27 ITA NO. 6 352/DEL/2013 29. SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE HONBLE DELHI HIGH COURT IN DIT(E) VS. INDRAPRASTHA CANCER SOCIETY (2015) 53 TAXMAN.COM 463 (DEL) HELD THAT; A CHARITABLE INSTITUTION, WHICH HAS PURCHASED CAPI TAL ASSET AND TREATED THE AMOUNT SPENT AS APPLICATION O F INCOME, IS FURTHER ENTITLED TO CLAIM DEPRECIATION O N THE SAME CAPITAL ASSET UTILIZED FOR BUSINESS. 29.1 IN ITS LATER JUDGMENT OF INDRAPRASTHA CANCER SOCIETY(SUPRA) THE HONBLE DELHI HIGH COURT CONSIDE RED THE JUDGMENT IN THE CASE OF CHARANJIV CHARITABLE TRUST REPORTED IN (2014) 43 TAXMANN.COM 330(DEL) AND INDIAN TRADE PRO MOTION ORGANIZATION(SUPRA). ON CONSIDERATION OF THESE TWO VIEWS, THE HONBLE HIGH COURT IN THE CASE OF INDRAPRASTHA CANC ER SOCIETY(SUPRA), DECIDED TO ALLOW DEPRECIATION ON CA PITAL ASSET IN THE COMPUTATION OF INCOME APART FROM TREATMENT OF PURCH ASE OF CAPITAL ASSET AS APPLICATION OF INCOME. 30. WE HAVE PERUSED THE RECORDS AND SUBMISSIONS BY BOTH THE PARTIES. IT IS OBSERVED THAT THE RESPONDENT ASSESS EE IS ONLY CLAIMING THAT DEPRECIATION SHOULD BE REDUCED FROM T HE INCOME FOR DETERMINING THE PERCENTAGE OF FUNDS WHICH HAVE TO B E APPLIED FOR THE PURPOSES OF TRUST. IT IS FURTHER OBSERVED THAT THE RESPONDENT ASSESSEE HAS NOT CLAIMED DOUBLE DEDUCTION. 30.1 THE JUDGMENT OF INDRAPRASTHA CANCER (SUPRA) HA S CONSIDERED THE JUDGMENTS OF CHARANJIV CHARITABLE TRUST (SUPRA) AND INDIAN TRADE PROMOTION (SUPRA). ON CONSIDERATION OF THE T WO VIEWS THAT HONBLE JURISDICTIONAL HIGH COURT HAS DECIDED TO AL LOW DEPRECIATION 28 ITA NO. 6 352/DEL/2013 ON CAPITAL ASSET IN THE COMPUTATION OF INCOME APART FROM TREATMENT OF PURCHASE OF CAPITAL ASSET AS APPLICATION OF INCO ME. 30.2 THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN INDRAPRASTHA CANCER (SUPRA) HAS BEEN FOLLOWED BY DE LHI TRIBUNAL IN THE CASE OF HONBLE INTERNATIONAL GOUDIYA VEDANTA T RUST VS. ADIT(E), ITA NO. 1136/DEL/2015 VIDE ORDER DATED 25. 08.2015. 30.3 THEREFORE, FOLLOWING THE JURISDICTIONAL HIGH COURT IN THE CASE OF INDRAPRASTHA CANCER SOCIETY(SUPRA), WE UPHOLD THE O RDER OF THE LD. CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 31. THE APPEAL FILED BY THE REVENUE IS THEREBY DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.09. 2015 SD/- SD/- (INTURI RAMA RAO) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23.9.15 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 29 ITA NO. 6 352/DEL/2013 DATE 1. DRAFT DICTATED ON 07.09.2015/21.09.2015 2. DRAFT PLACED BEFORE AUTHOR 07.09.2015/09.09.2015 / 21.09.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 22.9.15 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 22.9.15 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23.9.15 6. KEPT FOR PRONOUNCEMENT ON 23.9.15 7. FILE SENT TO THE BENCH CLERK 24.9.15 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.