2012 (9) TMI 990 - AT - Income Tax

Summary

Issues involved: Allowability of exemption u/s 11(4A) of the Income Tax Act for income from organizing exhibitions.

Summary:
The Appellate Tribunal ITAT Mumbai heard an appeal by the revenue against the CIT(A) order for the assessment year 2008-09, focusing on the allowability of exemption u/s 11(4A) of the Income Tax Act for income from exhibitions organized by the assessee trust.

The Assessing Officer (AO) observed that the assessee trust's main object was to promote trade, commerce, and industries, particularly in electrical and electronics sectors. The AO noted significant income from various sources, including an exhibition named Elecrama 2008. Despite previous years' treatment of exhibition income as taxable, the CIT(A) in this year's case deleted the addition, considering it incidental to the trust's objects. However, the AO contended that holding exhibitions was a non-charitable, dominant activity requiring separate books of account as per section 11(4A), which the assessee failed to maintain adequately.

The assessee argued that holding exhibitions was ancillary to its main charitable object of promoting trade and industries, citing previous Tribunal decisions supporting this view. The CIT(A) upheld the assessee's claim based on Tribunal precedents, directing the AO to allow the exemption, leading to the revenue's appeal before the Tribunal.

During the Tribunal proceedings, the assessee's representative highlighted previous Tribunal decisions and High Court rulings supporting the exemption claim for exhibition income. The Tribunal reviewed the case records and rival contentions, emphasizing that the exhibition activity was incidental to the trust's main charitable objectives, as established in previous Tribunal and High Court decisions. Therefore, the Tribunal upheld the CIT(A)'s order granting relief to the assessee, dismissing the revenue's appeal.

In conclusion, the Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s decision to allow the exemption for income from organizing exhibitions, as established by previous Tribunal and High Court judgments.

(Order pronounced on 26.09.2012)