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2016 (1) TMI 570 - AT - Income TaxExemption u/s 11A denied - assessee is not maintaining separate books of accounts as required under provision of section 11(4A) - Held that - We note that the facts and the issue are uncontrovertedly identical to the A.Y. 2007-08. No contrary decision was brought to our notice by either side and more specifically the Revenue. We further note that the benefit u/s 80G of the Act was granted by the Department to the assessee and the assessee is a registered with the Charity Commissioner along with the benefit of section 12A of the Act to the assessee. The only grievance of the Department is that the assessee trust is not maintaining separate books of accounts of its activities, therefore, he termed the assessee trust as AOP and assessed the income as business income, resultantly, denied exemption u/s 11A of the Act. The Tribunal has already placed reliance upon the decision from Hon ble Apex Court and the ratio laid down therein in the case of Thanthi Trust (2001 (1) TMI 80 - SUPREME Court ). We find no infirmity in the conclusion drawn in the respective appeal by the ld. First Appellate Authority, therefore, the appeals of the Revenue are having no merit, resultantly, dismissed. - Decided in favour of assessee.
Issues:
Appeals by Revenue for Assessment Years 2006-07, 2008-09, and 2009-10 regarding exemption u/s 11 of the Income Tax Act, 1961 due to alleged failure to maintain separate books of accounts. Analysis: For the Assessment Year 2006-07, 2008-09, and 2009-10, the Revenue filed appeals challenging the exemption granted u/s 11 of the Income Tax Act, 1961, asserting that the assessee did not maintain separate books of accounts as required by section 11(4A) of the Act. The primary contention was that the assessee violated the terms of the trust deed and was therefore ineligible for the exemption. During the hearing, the Revenue's arguments emphasized the lack of separate books of accounts and the alleged breach of trust deed terms. In response, the assessee's counsel defended the exemption granted, citing a previous Tribunal decision favoring the assessee for the Assessment Year 2007-08. The Tribunal reproduced relevant portions of the earlier decision to support the current case. The Tribunal noted that the assessee, a charitable trust engaged in Arts & Sports development, had been assessed accordingly up to the relevant years. The trust's main activity was the development of Arts & Sports, including the construction of a club on BMC-provided land. Despite a declared loss, the Assessing Officer treated the trust as an AOP engaging in business activities due to a property dispute with BMC. The assessee argued that the Assessing Officer disregarded relevant legal precedents, including a Supreme Court decision in Thanthi Trust 247 ITR 785. The Tribunal found that the trust's sports activities, certified under section 80G, were integral to its charitable objectives, and the absence of separate books for different sports did not disqualify it from exemption u/s 11. The trust's activities aligned with its trust deed, and there was no violation of relevant tax provisions. In light of the consistent facts and legal position, the Tribunal dismissed the Revenue's appeals for the three assessment years. The Tribunal upheld the exemption granted to the assessee under section 11 of the Act, emphasizing the trust's compliance with its charitable objectives and legal requirements. The decision was based on a thorough analysis of the facts, legal provisions, and precedents, ensuring the trust's continued eligibility for the exemption.
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