Vizag Defence Academy Educational Society, Visakhapatnam V. THE DCIT, Visakhapatnam

ITA 67/VIZ/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1983 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Assessee Lawyers: C V S MURTHY

Judgement Text

ITA NO.67/VIZAG/2015 VIZAG DEFENCE ACADEMY EDUCATIONAL SOCIETY, VSKP 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.67/VIZAG/2015 ( / ASSESSMENT YEAR: 2008-09) VIZAG DEFENCE ACADEMY EDUCATIONAL SOCIETY VISAKHAPATNAM VS. DCIT , CIRCLE - 4(1) , VISAKHAPATNAM [PAN: AAATV 2212P ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI C.V.S. MURTHY, AR / RESPONDENT BY : SHRI M.K. SETHI, DR / DATE OF HEARING : 29.03.2016 / DATE OF PRONOUNCEMENT : 31.03.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-2, VISAKHAPATNAM DATED 24.12.2014 FOR THE AS SESSMENT YEAR 2008-09. ITA NO.67/VIZAG/2015 VIZAG DEFENCE ACADEMY EDUCATIONAL SOCIETY, VSKP 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE AOP IS A SO CIETY REGISTERED UNDER SOCIETIES REGISTRATION ACT, XXI OF 1860. THE ASSESSEE IS ENGAGED IN PROVIDING TRAINING TO CANDIDATES FOR JOBS IN DEF ENCE DEPARTMENT. THE ASSESSEE FILED A RETURN OF INCOME DECLARING TOTAL I NCOME OF NIL BY CLAIMING EXEMPTION U/S 10(23C)(IIIAD) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). IN THE ASSESSME NT ORDER, A.O. HAS NOTED THAT THE ASSESSEE HAS NOT FILED ANY DETAILS E XCEPT CLAIMING RELIEF UNDER SECTION 10(23C)(IIIAD) OF THE ACT. IN THE AS SESSMENT ORDER, THE A.O. HAS NOTED THAT THE ASSESSEE IS NOT ABLE TO PRO DUCE ANY BOOKS OF ACCOUNTS, ANY BILLS, VOUCHERS IN RESPECT OF EXPENDI TURE INCURRED BY THE ASSESSEE AND REJECTED THE CLAIM OF THE ASSESSEE U/S 10(23C)(IIIAD) OF THE ACT. ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). ON APPEAL, THE CIT(A) CONFIRMED THE ORDER OF THE A.O. BY OBSERVING THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO SHOW THA T ASSESSEE IS AN EDUCATIONAL INSTITUTION AND ENTITLED FOR RELIEF U/S 10(23C)(IIIAD) OF THE ACT. IN SO FAR AS EXPENSES ALSO, NO EVIDENCE IS FI LED. BY OBSERVING THE ABOVE, CIT(A) DIRECTED THE A.O. TO ESTIMATE INCOME AT 45% OF GROSS RECEIPTS OF RS.96,57,180/-. 3. ON BEING AGGRIEVED, THE ASSESSEE CARRIED MATTER BEFORE THE TRIBUNAL. ITA NO.67/VIZAG/2015 VIZAG DEFENCE ACADEMY EDUCATIONAL SOCIETY, VSKP 3 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE IS AN EDUCATIONAL TRAINING INSTITUTE AND GROSS RECE IPTS ARE BELOW RS.1 CRORE AND ENTITLED FOR RELIEF U/S 10(23C)(IIIAD) OF THE ACT. ALTERNATIVELY, SUBMITTED THAT THE INCOME ESTIMATED BY THE A.O. AT 45% IS EXCESSIVE. IT MAY BE REDUCED TO 15%. TO SUPPORT HIS ALTERNATIVE ARGUMENT, HE HAS SUBMITTED THAT FOR THE ASSESSMENT YEAR 2011-12 AND 2012-13, 8.8%, 16.47% RESPECTIVELY ADOPTED BY THE A.O. 5. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT ASSESSEE IS RUNNING A TRAINING CENTRE, IT CANNOT BE CONSIDERED AS AN EDUCATIONAL INSTITUTION, THEREFORE, NOT ENTITLED FOR BENEFIT U/ S 10(23C)(IIIAD) OF THE ACT. SO FAR AS ALTERNATIVE CLAIM OF THE ASSESSEE I S CONCERNED, THE LD. D.R. HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE A.O. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE IS A TRAI NING INSTITUTE RELATING TO JOBS IN DEFENCE DEPARTMENT AND THEREFORE HE IS ENTI TLED FOR BENEFIT U/S 10(23C)(IIIAD) OF THE ACT. WE FIND THAT THE CLAIM U/S 10(23C)(IIIAD) OF THE ACT AVAILABLE TO THE ASSESSEE WHERE IT IS EXIST ED SOLELY FOR THE EDUCATIONAL PURPOSE AND NOT FOR THE PURPOSE OF ANY PROFIT. IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SHOW TH AT THE ASSESSEE IS ITA NO.67/VIZAG/2015 VIZAG DEFENCE ACADEMY EDUCATIONAL SOCIETY, VSKP 4 EXISTED ONLY FOR IMPARTING EDUCATION. THAT APART, T HE ASSESSEE HAS NOT FILED DETAILS IN RESPECT OF THE EXPENDITURE INCURRE D. IT IS ALSO NOT CLEAR WHAT IS THE TRAINING THAT THE ASSESSEE IS GIVING TO THE STUDENTS. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR O PINION, THE ASSESSEE IS NOT ENTITLED FOR THE BENEFIT U/S 10(23C)(IIIAD) OF THE ACT. 7. IN SO FAR AS ALTERNATIVE CLAIM OF THE ASSESSEE I S CONCERNED, THE ASSESSMENT ORDER UNDER CONSIDERATION IS 2008-09. T HE A.O. HAS ESTIMATED THE NET PROFITS AT 8.8% AND 16.47% FOR TH E A.Y. 2011-12 AND 2012-13. KEEPING IN VIEW OF THE ABOVE, WE FIND THA T ESTIMATION OF THE NET PROFITS IN THIS CASE IS 45% WHICH IS EXCESSIVE AND THE SAME IS REDUCED TO 15% TO MEET THE ENDS OF JUSTICE. A.O. I S DIRECTED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31 ST MAR16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 31.03.2016 VG/SPS ITA NO.67/VIZAG/2015 VIZAG DEFENCE ACADEMY EDUCATIONAL SOCIETY, VSKP 5 '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT VIZAG DEFENCE ACADEMY EDUCATIONA L SOCIETY, 38-40- 18/7, 104 AREA, MARRIPALEM, VISAKHAPATNAM 2. / THE RESPONDENT DCIT CIRCLE-4(1), VISAKHAPATNAM 3. ) / THE CIT-2, VISAKHAPATNAM 4. ) ( ) / THE CIT(A), VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM