2009 (5) TMI 616 - AT - Income Tax

Summary

Issues involved:
The judgment involves issues related to the exemption claimed by the assessee u/s 11 of the Income-tax Act for holding exhibitions, fulfillment of conditions as per section 11(4A), and set off of deficits against surplus income.

Exemption for holding exhibitions:
The Revenue challenged the assessee's claim that holding exhibitions was incidental to its objectives and fulfilled conditions for exemption u/s 11(4A). The Revenue argued that the Finance Act, 2008 amended section 2(15) to restrict activities involving trade/commerce/business from exemption. However, the Tribunal held that the proviso to section 2(15) was applicable only from 1-4-2009 and not for the assessment year 2004-05. The Tribunal dismissed the Revenue's grounds based on the legislative change, citing that the proviso did not apply retrospectively.

Set off of deficits against surplus income:
The issue of setting off deficits from earlier years against the surplus of the current year was raised. The Tribunal ruled in favor of the assessee, citing a decision of the jurisdictional High Court supporting the set off. The Tribunal dismissed this ground in favor of the assessee based on the High Court's decision.

Cross Objection by the Assessee:
The Assessee raised objections regarding the treatment of exhibition activity as a business activity, denial of exemption for membership subscriptions, and TDS credit. However, as the Tribunal had already dismissed the Revenue's grounds related to exhibition activities, the Cross Objections were deemed infructuous and subsequently dismissed.

In conclusion, the Tribunal upheld the assessee's claim for exemption for holding exhibitions and the set off of deficits against surplus income. The Cross Objections raised by the assessee were dismissed as they became irrelevant following the dismissal of the Revenue's grounds.