2017 (6) TMI 1363 - AT - Income Tax

Exemption u/s 11 - denial of exemption by invoking the provisions of Sec.13(1)(c) - HELD THAT - We find that Ld.CIT(A) while deciding the issue in favour of the assessee had relied on the decision of the Co-ordinate Bench of the Tribunal in assessee s own case for A.Y. 2008-09 2015 (3) TMI 493 - ITAT PUNE . Before us, Revenue has not placed any material on record to demonstrate that the facts in the year under appeal are distinguishable to that of earlier years. In view of the aforesaid facts and following the same reasoning of the Tribunal in assessee s own case for A.Y. 2008-09, we find no reason to interfere with the order of Ld.CIT(A). Thus, the grounds of Revenue are dismissed.

Summary

Issues:
Appeal by Revenue against CIT(A)'s order for assessment years 2010-11 and 2011-12.

Analysis:
1. The appeals filed by the Revenue for assessment years 2010-11 and 2011-12 were heard together as the facts and issues were identical. The main issue was whether the expenditure on advertisement was legitimate for the society's objectives.
2. The dispute arose from the assessee's payment to an advertising agency, where trustees had interests, leading to a claim that the society violated provisions under section 13(1)(c) of the Income Tax Act.
3. The AO contended that the society indirectly benefited the advertising firm by making excess payments, thus violating tax exemption rules. However, the CIT(A) ruled in favor of the assessee, citing the benefit derived from engaging the advertising agency.
4. The CIT(A) referred to a previous tribunal decision in the assessee's favor for A.Y. 2008-09, emphasizing that the society did not breach section 13(1)(c) conditions.
5. The Revenue argued that the AO's observations should prevail, but the ITAT Pune dismissed the appeal, noting the lack of distinguishable facts for the current year compared to previous years.
6. The ITAT upheld the CIT(A)'s decision, emphasizing consistency with the earlier tribunal ruling for A.Y. 2008-09, leading to the dismissal of the Revenue's appeal for both assessment years 2010-11 and 2011-12.

This comprehensive analysis covers the key legal points and the reasoning behind the judgment, providing a detailed understanding of the case and its implications.