ITO(E), Ghaziabad V. Rajkiya Audyogik Krishi Pradarshani Avam Govt. Industrial & Agriculture Exhibition, Aligarh

ITA 6735/DEL/2014

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8562 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Assessee Lawyers: SUNIL TYAGI
• Keywords: Charitable institution
• Section: 143(3); 72; 12; 11

Judgement Text

ITA NO.- 6735/DEL/2014 RAJKIYA AUDYOGIC KRISHI PRADARSHANI AVAM PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: F: NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 6735/DEL/2014 ( ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER (EXEMPTION), WARD, GHAZIABAD. VS. M/S RAJKIYA AUDYOGIC & KRISHI PRADARSHANI AVAM GOT. INDUSTRIAL & AGRICULTURAL EXHIBITION GROUND, G.T. ROAD, ALIGARH. PAN NO: AAATG9972B APPELLANT RESPONDENT REVENUE BY : SHRI SARAS KUMAR, SR. DR ASSESSEE BY : SHRI SUNIL TYAGI, CA ORDER PER ANADEE NATH MISSHRA, AM [A] THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE IMPUGNED APPELLATE ORDER DATED 05.09.2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS), GHAZIABAD, [IN SHORT, LD.CIT(A)] PERTAINING TO AS SESSMENT YEAR 2010-11, ON THE FOLLOWING GROUNDS: 1.WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A)WAS CORRECT IN DELETING THE ADDITION OF RS. 1,44,000/- ON ACCOU NT OF HOLI MILAN AND ROZA IFTAR CELEBRATION, RELYING ON THE FACT THAT IT WAS REGIST ERED U/S 12A, IGNORING THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS NOT RELATE D TO GENERAL PUBLIC UTILITY AND ITA NO.- 6735/DEL/2014 RAJKIYA AUDYOGIC KRISHI PRADARSHANI AVAM PAGE 2 OF 7 THEREFORE, IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE IT ACT., 1961. 2. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS.4,00,000/- ON ACCOUNT O F POLICE KANLYAN NIDHI, RELYING ON THE FACT THAT IT WAS REGISTERED U/S 12A, IGNORIN G THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS NOT RELATED TO GENERAL PUBLIC U TILITY AND THEREFORE, IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE IT ACT., 1961. 3. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A)WAS CORRECT IN DELETING THE ADDITION OF RS.6,38,881/- ON ACCOUNT O F ATITHI SATKAR/HOTEL SAMMAN, RELYING ON THE FACT THAT IT WAS REGISTERED U/S 12A, IGNORING THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS NOT RELATED TO GENERAL PUBLIC UTILITY AND THEREFORE, IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE IT ACT., 1 961. 4. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A)WAS CORRECT IN DELETING THE ADDITION OF RS.97,933/- ON ACCOUNT OF GENERAL/STAGE DECORATION, RELYING ON THE FACT THAT IT WAS REGISTERED U/S 12A, IGNORING THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS HOT RELATED TO GENERAL PUBLIC UTILITY AND THEREFORE, IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE IT ACT., 1 961. 5. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A)WAS CORRECT IN DELETING THE ADDITION OF RS.31,96,697/- ON ACCOUNT OF EXPENDITURE FOR LIGHT AND SOUND SYSTEM 8I EXPENSES ON CULTURAL SHOWS NIGHTS, RELYING ON THE FACT THAT IT WAS REGISTERED U/S 12A, IGNORING THAT THE EXPENDITURE I NCURRED BY THE ASSESSEE WAS NOT RELATED TO GENERAL PUBLIC UTILITY AND THEREFORE , IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE IT ACT., 1961. 6. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A)WAS CORRECT IN DELETING THE ADDITION OF RS.55,94,570/- ON ACCOUNT OF DISALLOWANCE OUT OF THE OTHER EXPENSES, RELYING ON THE FACT THAT IT WAS REG ISTERED U/S 12A, IGNORING THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS NOT RE LATED TO GENERAL PUBLIC UTILITY AND THEREFORE, IS NOT ENTITLED FOR EXEMPTION U/S 11 OF THE IT ACT., 1961. 7. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS.7,23,145/- ON ACCOUNT O F TAX DEDUCTION AT SOURCE CLAIMED AS EXPENDITURE. 8. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS. 1,28,46,205/- ON ACCOU NT OF SURPLUS DURING THE YEAR AS PER INCOME AND EXPENDITURE ACCOUNT RELYING ON TH E FACT THAT IT WAS REGISTERED U/S 12A, IGNORING THAT THE ASSESSEE WAS NOT DOING A NY CHARITABLE ACTIVITY. 9. THE ORDER OF LD. CIT(A) BE CANCELLED AND THE ORD ER OF THE AO BE RESTORED. 10. APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR ADD A NY ONE OR MORE GROUNDS OF APPEAL. ITA NO.- 6735/DEL/2014 RAJKIYA AUDYOGIC KRISHI PRADARSHANI AVAM PAGE 3 OF 7 (B) ASSESSMENT ORDER DATED 25.03.2013 WAS PASSED BY TH E ASSESSING OFFICER (AO, FOR SHORT) UNDER SECTION 143(3) OF INCOME TAX ACT, 1961 (I.T. ACT, FOR SHORT) WHEREIN TOTAL INCOME WAS ASSESSED AT RS. 2,36,42,330/- AS A GAINST RETURNED INCOME OF NIL. THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 11 OF I.T. ACT WAS DENIED BY THE AO WHICH RESULTED IN THE AFORESAID ADDITION OF RS. 2,3 6,42,330/-. THE ASSESSING OFFICER FOLLOWED THE ORDER FOR ASSESSMENT YEAR 2005-06 IN M AKING THE AFORESAID ADDITION AND IN DENYING EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 11 OF I.T. ACT. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). V IDE IMPUGNED APPELLATE ORDER DATED 05.09.2014, THE LD. CIT(A) FOLLOWING THE ORDERS OF HIS PREDECESSORS AND ALSO THE ORDERS OF CO-ORDINATE BENCH OF ITAT, IN ASSESSEES OWN CAS E ON IDENTICAL FACTS, FOR ASSESSMENT YEARS 2005-06 & 2006-07, 2008-09 AND 2009-10, ALLOW ED THE ASSESSEES APPEAL AND DELETED THE ADDITIONS / DISALLOWANCE MADE BY THE AO . THIS PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST THE AFORESAID IMPUGNED APP ELLATE ORDER DATED 05.09.2014 OF LD. CIT(A). ALTHOUGH THE NUMEROUS GROUNDS OF APPEA L HAVE BEEN RAISED IN THIS APPEAL, WHICH HAVE BEEN REPRODUCED EARLIER IN THIS ORDER; T HE CORE ISSUE IS WHETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF I.T. ACT (C) AT THE TIME OF HEARING BEFORE US, THE LEARNED AUTH ORIZED REPRESENTATIVE (LD. AR, FOR SHORT) OF THE ASSESSEE SUBMITTED AT THE OU TSET, THAT THE ISSUES IN DISPUTE IN THE PRESENT APPEAL ARE COVERED IN FAVOUR OF THE ASSESSE E BY ORDERS OF CO-ORDINATE BENCH OF ITAT, IN IDENTICAL FACTS AND CIRCUMSTANCES, IN ASSE SSEES OWN CASE, VIDE ORDER DATED 31.08.2012 FOR ASSESSMENT YEAR 2005-06 & 2006-07 IN ITA NO.- 72& 73/AGR/2011; ORDER DATED 07.09.2012 FOR ASSESSMENT YEAR 2008-09 IN ITA NO. 04/AGR/2012 AND ORDER ITA NO.- 6735/DEL/2014 RAJKIYA AUDYOGIC KRISHI PRADARSHANI AVAM PAGE 4 OF 7 DATED 15.03.2013, FOR ASSESSMENT YEAR 2009-10 IN IT A NO.- 500/AGR/2012. THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR, FOR SHORT) A GREED THAT THE ISSUE IN DISPUTE IN THE PRESENT APPEAL ARE COVERED IN FAVOUR OF THE ASS ESSEE, VIDE THE AFORESAID ORDERS DATED 31.08.2012, 07.09.2012 AND 15.03.2013 OF CO-O RDINATE BENCH OF ITAT IN IDENTICAL FACTS AND CIRCUMSTANCES. HOWEVER, THE LD. DR PLACED RELIANCE ON THE AFORESAID ASSESSMENT ORDER DATED 25.03.2013. (D) WE HAVE HEARD BOTH SIDES. IT IS NOT IN DISPUTE TH AT FACTS AND CIRCUMSTANCES IN THE PRESENT APPEAL BEFORE US ARE IDENTICAL TO FACTS AND CIRCUMSTANCES FOR ASSESSMENT YEARS 2005-06 & 2006-07, 2008-09 AND 2009-10 FOR WH ICH VIDE AFORESAID ORDERS DATED 31.08.2012, 07.09.2012 AND 15.03.2013 OF CO-ORDINAT E BENCH OF ITAT HAS ALREADY DECIDED THE ISSUES IN DISPUTE IN ASSESSEES FAVOUR, IN IDENTICAL FACTS AND CIRCUMSTANCES. NEITHER SIDE HAS BROUGHT ANY DISTINGUISHING FACTS A ND CIRCUMSTANCES FOR OUR CONSIDERATION TO PERSUADE US TO TAKE A VIEW DIFFERE NT FROM THE VIEW ALREADY TAKEN BY CO-ORDINATE BENCH OF ITAT, IN ASSESSEES OWN CASE B Y AFORESAID ORDERS DATED 31.08.2012, 07.09.2012 AND 15.03.2013 OF CO-ORDINAT E BENCH OF ITAT. WE ALSO FIND THAT CO-ORDINATE BENCH OF ITAT, IN AFORESAID ORDERS DATED 07.09.2012 AND 15.03.2013 HAS FOLLOWED THE ORDER DATED 31.08.2012 OF CO-ORDIN ATE BENCH OF ITAT, IN ITA NOS. 72 & 73/AGR/2011 FOR ASSESSMENT YEARS 2005-06 & 2006-0 7. THE RELEVANT PORTION OF THE AFORESAID ORDER DATED 31.08.2012 OF CO-ORDINATE BEN CH OF ITAT IS REPRODUCED AS UNDER: 7. WE HAVE HEARD THE ID. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. WE NOTICE THAT THE ASSESSEE HAS GRANTED REGISTRATION UNDER SE CTION 12A/12AA OF THE ACT DATED ITA NO.- 6735/DEL/2014 RAJKIYA AUDYOGIC KRISHI PRADARSHANI AVAM PAGE 5 OF 7 09.10.2000 W.E.F. 01.04.99. THIS REGISTRATION HAS N OT BEEN FOUND CANCELLED. THE OBJECTS OF THE SOCIETY ARE CHARITABLE AS ITS AIMS AND ACTIVITIES A RE TO PROMOTE SMALL SCALE INDUSTRIES, AGRICULTURISTS, ARTISTS ETC. THE CIT(A) NOTED THAT THE CLAUSES OF MEMORANDUM & ARTICLE OF ASSOCIATION MENTIONS THAT INCOME OR FUNDS ARE NOT D IVISIBLE AMONGST THE MEMBERS OF THE TRUST AND NO BENEFITS ARE TO GO TO ANY INDIVIDUAL, THE EN TIRE FUNDS OR ANY SURPLUS GENERATED ARE DOVETAILED INTO THE AVOWED OF CHARITABLE ACTIVITIES OF THE SOCIETY. THE CIT(A) HAS ALSO NOTED THE FACT THAT THE ENTIRE RENTAL INCOME GENERATED IS BEING PLOUGHED BACK FOR THE PURPOSES OF THE SOCIETY. THE GIT(A) HAS FOLLOWED HIS PREDECESSO RS ORDER FOR A.Y. 2006-07 IN ASSESSEES OWN CASE WHEREIN IT-WAS STATED THAT THE A.O. CANNOT SIMPLY OVERRIDE THE ORDER OF CIT, AGRA BY POINTING OUT CERTAIN DEFECTS IN CONSTITUTION OF THE SOCIETY AND PROCEED TO DISALLOW THE CLAIM OF EXEMPTION U/S 11 & 12 OF THE ACT. ACTION OF THE A.O . WAS BEYOND JURISDICTION. IT HAS ALSO BEEN NOTICED IN THAT ORDER THAT THE SOCIETY WAS ALLOWED REGISTRATION UNDER SECTION 12A/12AA OF THE ACT DATED 9 TH OCTOBER, 2000 AND THE ASSESSEES CASES WERE SCRUTI NIZED FOR THE A.YS. 1989-90, 1990-91 & 1995-96 WHEREIN IT WAS HELD THAT INCOME O F THE SOCIETY WAS EXEMPT. AS REGARDS THE CONTENTION OF THE ID. AUTHORISED REPRESENTATIVE REGARDING SOCIETYS PROPERTY, WE AGREE WITH THE CONTENTION OF THE ID. AUTHORISED REPRESENT ATIVE THAT PROPERTY WORD USED IN SECTION 11 IS A TERM OF WIDEST IMPORT, AND SUBJECT TO ANY L IMITATION OR QUALIFICATION WHICH THE CONTEXT MIGHT REQUIRE, IT SIGNIFIES EVERY POSSIBLE INTEREST WHICH A PERSON CAN ACQUIRE, HOLD AND ENJOY. BUSINESS WOULD UNDOUBTEDLY BE PROPERTY, UNLESS THERE IS SOMETHING TO THE CONTRARY IN THE ENACTMENT. THERE IS NOTHING IN THE LANGUAGE OF SECT ION 11 WHICH RESTRICTS IN ANY MANNER THE NORMAL AND ACCEPTED MEANING OF THE WORD PROPERTY. IN THIS REGARD, WE MAY REFER THE JUDGMENT OF APEX COURT IN THE CASE OF J.K. TRUST VS . CIT, 32 ITR 535 (SC). HONBLE BOMBAY HIGH COURT IN THE CASE OF A.J. PATEL VS. CIT, 97 ITR 683 (BOM) HELD THAT THE RIGHT TO EXPLOIT SPACE ON EITHER SIDE OF AN OVERBRIDGE FOR ADVERTISEMENTS IS A PROPERTY. IN THE LIGHT OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY SUBSTANCE IN THE SUB MISSIONS OF THE ID. DEPARTMENTAL REPRESENTATIVE, THEREFORE, THE SAME IS DISMISSED. 8. AS REGARDS THE OBJECTION OF THE LD. DEPARTMENTAL REPRESENTATIVE IN RESPECT OF DISALLOWANCE OF EXPENDITURE, WE NOTICE THAT THE CIT (A) HAS RIGHTLY HELD THAT THE A.O. HIMSELF ACCEPTED THOSE EXPENSES INCURRED FOR THE PURPOSES O F THE OBJECT OF THE SOCIETY AS HE MADE ADHOC DISALLOWANCE IN PART. THE CIT(A) AFTER VERIFY ING THE FACTS SATISFIED THAT EXPENSES WERE INCURRED FOR CHARITABLE PURPOSES IN ACCORDANCE WITH THE OBJECT OF THE SOCIETY. 9. IN THE LIGHT OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE ORDER OF THE CIT(A) IS, THEREFORE, CONF IRMED. 10. AS STATED ABOVE THAT SINCE THE FACTS OF THE CA SE FOR A.Y. 2006-07 ARE IDENTICAL TO THE CASE FOR A.Y. 2005-06 OF WHICH DETAILED DISCUSSION HAS BEEN MADE ABOVE, IN THE LIGHT OF THE SAME, ORDER OF THE CIT(A) FOR A.Y. 2006-07 IS ALSO CONFIRMED. (D.1) AS FACTS AND CIRCUMSTANCES OF THE PRESENT APPEAL B EFORE US ARE IDENTICAL TO FACTS AND CIRCUMSTANCES FOR ASSESSMENT YEARS 2005-06 & 20 06-07, 2008-09 AND 2009-10 FOR WHICH CO-ORDINATE BENCH OF ITAT HAS ALREADY TAKEN V IEW IN FAVOUR OF THE ASSESSEE, VIDE ITA NO.- 6735/DEL/2014 RAJKIYA AUDYOGIC KRISHI PRADARSHANI AVAM PAGE 6 OF 7 AFORESAID ORDERS DATED 31.08.2012, 07.09.2012 AND 1 5.03.2013; WE ALSO DECIDE THE ISSUES IN DISPUTE BEFORE US IN FAVOUR OF THE ASSESS EE; RESPECTFULLY FOLLOWING THE AFORESAID ORDERS DATED 31.08.2012, 07.09.2012 AND 1 5.03.2013 OF CO-ORDINATE BENCH OF ITAT. ACCORDINGLY, WE DECLINE TO INTERFERE WITH TH E IMPUGNED APPELLATE ORDER DATED 05.09.2014 OF LD. CIT(A). (E) IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16.01.20. SD/- SD/- (H.S. SIDHU) (A NADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 16.01.20 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 6735/DEL/2014 RAJKIYA AUDYOGIC KRISHI PRADARSHANI AVAM PAGE 7 OF 7 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER