2014 (1) TMI 1898 - AT - Income Tax

Exemption u/s 10 (23BBA) - assessee i.e. Shree Bade Mathureshji Temple Board, Kota is having perpetual succession and is constituted u/s 92 of the C.P.C. 1908, by the District Judge, Kota for the better management and looking after day to day functioning of Shree Bade Mathureshji Temple, Kota - HELD THAT - As per the provisions of Section 10(23BBA) any income of any body or authority established, constituted or appointed by or under any Central/State or Provincial Act, which provides for the administration of any public religious or charitable trust or endowments shall not be included in computing the total income. In the present case, Shree Bade Mathureshji Temple Board, Kota has been constituted u/s 92 of the C.P.C. vide order dated 07/5/1974 in Civil Execution Case No. 32 of 1973 by the District Judge, Kota. The copy of the said order is placed at page No. 26 to 143 of the assessee s paper book. The said order has been upheld by the Hon'ble jurisdictional High Court vide order dated 1st September, 1986. Copy of which is placed at pages No. 2 to 25 of the assessee s paper book. Therefore, it is crystal clear that the assessee Board, is constituted under the Central Act i.e. Section 92 of the C.P.C., 1908, therefore, the provisions of Section 10(23BBA) of the Act are applicable and the income of the assessee from any source is exempt.

Summary

Issues Involved:
1. Exemption under Section 10(23BBA) of the Income Tax Act, 1961.
2. Cost of acquisition of land and computation of capital gain.
3. Deduction under Section 11(1)(a) of the Income Tax Act, 1961.

Detailed Analysis:

1. Exemption under Section 10(23BBA) of the Income Tax Act, 1961:

The primary issue in the departmental appeals was whether the assessee was entitled to exemption under Section 10(23BBA) of the Income Tax Act, 1961. The assessee claimed exemption on income derived from capital gains, which was initially disallowed by the Assessing Officer. The assessee argued that it was a body constituted under a scheme framed under Section 92 of the Civil Procedure Code, 1908, for the administration of Shree Bade Mathureshji Temple, Kota. The CIT(A) accepted the assessee's claim, leading to the department's appeal.

The tribunal examined the provisions of Section 10(23BBA), which exempts the income of any body or authority established by or under any Central, State, or Provincial Act for the administration of public religious or charitable trusts. The tribunal noted that the Shree Bade Mathureshji Temple Board was constituted under Section 92 of the C.P.C., 1908, by the District Judge, Kota, and later upheld by the Rajasthan High Court. Therefore, it qualified for exemption under Section 10(23BBA).

The tribunal also referred to the decision of the Orissa High Court in the case of Shri Jagannath Temple Managing Committee Vs. Commissioner of Income Tax & Ors., which held that bodies constituted under a Central Act for administering public religious trusts are entitled to unconditional exemption under Section 10(23BBA). Consequently, the tribunal upheld the CIT(A)'s decision to grant exemption to the assessee.

2. Cost of Acquisition of Land and Computation of Capital Gain:

The second issue pertained to the cost of acquisition of land at village Ranpur and the computation of capital gain. The Assessing Officer had adopted the cost of acquisition at Rs. 1,38,940 and computed the capital gain at Rs. 21,08,58,996. The assessee contested this computation, but the CIT(A) did not adjudicate on this issue, as the primary matter of exemption under Section 10(23BBA) was resolved in favor of the assessee.

3. Deduction under Section 11(1)(a) of the Income Tax Act, 1961:

The third issue involved the deduction under Section 11(1)(a) of the Act. The Assessing Officer did not allow this deduction. However, since the CIT(A) allowed the exemption under Section 10(23BBA), the issue of deduction under Section 11(1)(a) became redundant and was not adjudicated.

Conclusion:

The tribunal dismissed the departmental appeals, affirming the CIT(A)'s decision to grant exemption under Section 10(23BBA) to the assessee. The cross objections filed by the assessee were dismissed as not pressed. The tribunal's decision was pronounced in the open court on 22/01/2014.