ITO 1(1), MUMBAI V. MATOSHRI ARTS & SPORTS TRUST, MUMBAI

ITA 8161/MUM/2010

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3005 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K GOPTAL
• Keywords: Business income; Charitable institution
• Section: 80G; 12A; 12; 11

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.8161/MUM/2010 ASSESSMENT YEAR 2007-08 DY. DIT(E)-I(1), R. NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI-400012 / VS. MATOSHRI ARTS & SPORTS TRUST MATOSHRI MEENATAI THAKERAY GROUND, JOGESHWARI, VIKHROLI LINK ROAD, ANDHERI(E), MUMBAI-400093 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AAATM2559G / REVENUE BY SHRI VIJAY KUMAR SONI-DR !'# $ / ASSESSEE BY SHRI K.GOPTAL % & $ ' / DATE OF HEARING : 19/10/2015 & $ ' / DATE OF ORDER: 19/10/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 23/07/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO G RANTING EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 (HEREI NAFTER THE ACT) WITHOUT APPRECIATING THE FACT THAT THE ASS ESSEE IS NOT MAINTAINING SEPARATE BOOKS OF ACCOUNTS AS REQUIRED UNDER PROVISION OF SECTION 11(4A) OF THE ACT. MATOSHRI ARTS & SPORTS TRUST ITA NO.8161/MUM/2010 2 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI VIJAY KUMAR SONI, ADVANCED ARGUMENTS, WHICH ARE IDENTICAL TO THE GROUND RAISED BY CONTENDING THAT THE ASSESSEE IS NO T MAINTAINING THE SEPARATE BOOKS OF ACCOUNTS AND THE ASSESSEE HAS VIOLATED TERMS AND CONDITIONS OF TRUST DEED, TH US, NOT ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. 2.1. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE, SHRI K. GOPAL, DEFENDED THE CONCLUSION ARRIVED AT I N THE IMPUGNED ORDER. THE ASSESSEE HAS ALSO FILED PAPER B OOK RUNNING INTO 54 PAGES, WHICH IS KEPT ON RECORD. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A CHARITABLE TRUST, REGIST ERED WITH THE CHARITY COMMISSIONER AND ALSO WITH THE DEPARTMENT U /S 12A OF THE INCOME TAX ACT. IT IS NOTED THAT RIGHT FROM THE DATE OF INCEPTION ITSELF, THE ASSESSEE TRUST HAD BEEN ASSES SED ACCORDINGLY UP TO A.Y. 2006-07. THE MAIN ACTIVITY O F THE ASSESSEE TRUST ARE FOR THE DEVELOPMENT OF ARTS & SP ORTS AND IS STILL CONTINUING. THE ASSESSEE CONSTRUCTED A CL UB ON THE LAND PROVIDED BY BMC IN TERMS OF THE AGREEMENT. THE OWNERSHIP OF THE LAND WAS WITH THE BMC AND THE STRU CTURE CONSTRUCTED THEREUPON WAS TO BE HANDED OVER TO THE BMC AS PER TERMS OF THE AGREEMENT BUT THE ASSESSEE WAS TO CARRY ON AND CONTINUE THE SUPPORTS ACTIVITIES ON THE LAND/PR OPERTY AS PER THE TRUST DEED. AT THE RELEVANT TIME, THE ASSE SSEE DECLARED LOSS OF RS.46,22,140/-. THE ASSESSING OFF ICER ASSESSED THE INCOME OF THE ASSESSEE TRUST AT RS.13, 07,205/-, MATOSHRI ARTS & SPORTS TRUST ITA NO.8161/MUM/2010 3 DISALLOWING THE STATUS OF THE ASSESSEE AS A TRUST A ND TREATED THE SAME AS AOP BROADLY ON THE BASIS THAT THE PROPE RTY WHICH IS IN DISPUTE WITH THE BMC AUTHORITIES, THE A SSESSEE IS DOING BUSINESS ACTIVITIES. WHILE COMING TO THIS CON CLUSION, THE ASSESSING OFFICER RELIED UPON THE DECISION IN T HE CASE OF SIND COOPERATIVE HOUSING SOCIETY VS ITO. THE STAND OF THE ASSESSEE IS THAT WHILE DECIDING THE ISSUE, THE LD. ASSESSING OFFICER COMPLETELY IGNORED THE DECISION FROM HONBL E APEX COURT IN THANTHI TRUST 247 ITR 785. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, THERE IS NO DISPUTE TO THE FACT THAT SPORTS ACTIVITIES ARE CARRIED OUT BY THE ASSES SEE AND EVEN CERTIFICATE U/S 80G WAS GRANTED TO THE ASSESSEE BY THE DEPARTMENT. THE ASSESSEE RECEIVED DONATIONS FROM DI FFERENT DONORS, WHO CONFIRMED OF MAKING THE DONATIONS. THE MAIN GRIEVANCE OF THE ASSESSING OFFICER IS THAT IN VIEW OF SECTION 11(4A) OF THE ACT, THE ASSESSEE TRUST IS NOT MAINT AINING SEPARATE BOOKS OF ACCOUNTS OF ITS ACTIVITIES, THERE FORE, HE TERMED THE ASSESSEE TRUST AS AOP AND ASSESSED THE I NCOME AS BUSINESS INCOME, RESULTANTLY, DENIED EXEMPTION U /S 11 OF THE ACT. THERE IS NO DISPUTE THAT RIGHT FROM INCEPT ION, THE ASSESSEE TRUST WAS GRANTED EXEMPTION U/S 11 OF THE ACT BY THE TAX AUTHORITIES. EVEN, IF, THE PROPERTY IS UNDE R DISPUTE WITH THE BMC AUTHORITIES, CANNOT BE THE SOLE BASES FOR MATOSHRI ARTS & SPORTS TRUST ITA NO.8161/MUM/2010 4 DENYING EXEMPTION TO THE ASSESSEE. SO FAR AS, NON- MAINTENANCE OF SEPARATE BOOKS OF ACCOUNTS FOR DIFFE RENT SPORTS IS CONCERNED, WE ARE IN AGREEMENT WITH THE F INDING OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT D IFFERENT SPORTS ARE SINGLE ACTIVITY OF SPORTS, THEREFORE, CA NNOT BE TREATED AS DIFFERENT ACTIVITIES OF THE TRUST. THIS VIEW FIND SUPPORT FROM THE RATIO LAID DOWN FROM HONBLE APEX COURT IN THANTHI TRUST 247 ITR 785 (SC). THERE IS FURTHER UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT T HE ASSESSEE TRUST IS NOT RUNNING RESTAURANT, BAR, ETC, THUS, THERE IS NO QUESTION OF MAINTAINING SEPARATE REGISTERS. THE ACTIVITIES OF THE ASSESSEE TRUST ARE FOR THE ATTAIN MENT OF OBJECTS OF THE TRUST ENSHRINED IN THE TRUST DEED. T HUS, THE ASSESSEE IS HAVING A VALID REGISTRATION U/S 12A OF THE ACT, GRANTED BY THE DIRECTOR OF INCOME TAX (EXEMPTION) A ND THE ASSESSING OFFICER HAS NOT SPECIFICALLY POINTED OUT ANY VIOLATION OF THE TRUST DEED AS WELL AS THE PROVISIO N OF SECTION 12 & 13, THEREFORE, WE FIND NO INFIRMITY IN THE CON CLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S). FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 19/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 19/10/2015 F{X~{T? P.S/. . . MATOSHRI ARTS & SPORTS TRUST ITA NO.8161/MUM/2010 5 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.