9911796707
TMI Blog2014 (11) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... no justification to assess income of assessee as business income and to disallow the expenditure treating the entity as business organization. Assessee samiti have been allowed to registration u/s. 12A of Act, with effect from 1.4.2000, by ITAT vide its order dated 13.05.2011 inter alia held that assessee satisfies list of genuineness of activities of institution as per objects of institution. In view of above, CIT(A) justified in granting relief to assessee in all these 3 years on all above issues as claimed u/s. 10(23c)(iiiad) of Act. - ITA Nos. 497/JP/2011 & 109/JP/2012, ITA Nos. 921, 922 & 923/JP/2011 - - - Dated:- 28-11-2014 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI B. C. MEENA, ACCOUNTANT MEMBER. For the Appellant : Shri Rajesh Ojha, D.R. For the Respondent : : Shri P. C. Parwal, A.R. ORDER PER SHAILENDRA KUMAR YADAV, J.M: All five appeals have been filed by the Revenue against the respective orders of Commissioner of Income Tax (Appeals), Alwar, dated 11.03.2011 for A.Y. 2003-04, 18.11.2011 for A.Y. 2007-08 and consolidated order dated 02.08.2011 for A.Y. 2004-05, 05-06 06-07 So they are being disposed of by way of common ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in deleting the disallowance the claim of exemption u/s. 10(23c)(iiiad) of the IT Act, 1961. On this issue the Department has filed further appeal before Hon ble High Court. 2. That the ld. CIT (A) has erred in law as well as on the facts and circumstances of the case in deleting the addition of ₹ 104000/- on account of 1/3rd out of hostel cum residence as made by the AO. 3. That the ld. CIT (A) has erred in law as well as on the facts and circumstances of the case in deleting the addition of ₹ 243000/- on account of rent and expenditure at Jaipur as made by the AO. 4. That the ld. CIT (A) has erred in law as well as on the facts and circumstances of the case in deleting the addition of ₹ 102560/- on account of car expenses with depreciation as made by the AO. 5. That the ld. CIT (A) has erred in law as well as on the facts and circumstances of the case in deleting the addition of ₹ 214913/- on account of interest made by the AO. 6. That the ld. CIT (A) has erred in law as well as on the facts and circumstances of the case in deleting the addition of ₹ 160000/- on account of professional fre payment to Shri M P Jain ₹ 1 lac and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id down by Section 10(23c)(iiiad), hence not entitled to claim exemption u/s. 10(23c)(iiiad). Further as per Section 10(23c) it is mandatory that where assessee performed any other activity which is incidental to other objects of the institute then separate books of accounts are required to be maintained by it in respect of such receipts. Assessee society is providing or is running hostel for the students and also providing bus facility to its students, which can be termed as activities incidental to the objects of the society. It was found by Assessing Officer that assessee society is not maintaining separate set of books of accounts for hostel and bus facilities instead it has merged the accounts of the two activities. 3.3 Matter was carried before First Appellate Authority, wherein various contentions were raised as detailed in para 4.2 of order of CIT(A). Having considered the same, CIT(A) granted relief to the assessee. Same has been opposed on behalf of Revenue. Ld. Departmental Representative who submitted that CIT(A) was not justified in deleting the disallowance of exemption claimed u/s. 10(23c)(iiiad) of ₹ 33,26,760/- made by Assessing Officer. Accordingly, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts for activities concern with object of society, activities incidental to the object of the society are not applicable to claim exemption u/s. 10(23c)(iiiad). In this background, CIT(A) was justified in deleting disallowance of exemption claimed u/s. 10(23c)(iiiad) of ₹ 33,26,760/- made by Assessing Officer. Same is uphold. 4. As a result, appeal of Revenue for A.Y. 2003-04 is dismissed. 5. Now we take ITA Nos. 921 to 923/JP/2011 for A.Y. 2004- 05, 05-06 06-07. 5.1 As stated above, assessee is registered society with the Registrar of Societies, Alwar, vide registration No. 6/Alwar/88- 89 dated 26.04.1988 and was claimed to be existing solely for education purpose without profit motive and accordingly the society has claimed exemption u/s. 10(23c)(iiiad) of Act, for its income of ₹ 6,28,831/- being net surplus of incomes over expenditures during the year. Assessment of society was made u/s. 143(3) of Act for earlier year i.e. 2003-04 and claim of exemption u/s. 10(23c)(iiiad) was denied by Assessing Officer for detailed reasons given in assessment order for following reasons: i. Non application of income toward the object of assessee. ii. Transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - was disallowed. Since object of society does not provide for any such type of donation and assessee was held as not a charitable institution u/s. 12AA of Act, donation of ₹ 20,090/- given to Saini Community at the time of group marriage was not allowable and accordingly same was disallowed. Finally, income of samiti has been computed included excess of income over expenditure ₹ 6,28,832/- as total income declared as per return and various disallowance of ₹ 7,41,268/- assessed at ₹ 13,70,100/-. 5.2 In A.Y. 05-06, Assessing Officer vide assessment order dated 20.12.2007 has reproduced almost the same grounds taken in earlier year assessment order dated 12.12.2006 relating to A.Y. 2004-05 for disallowing claim of exemption u/s. 10(23c)(iiiad) and also disallowed car expenses and depreciation of ₹ 2,65,826/- and interest of ₹ 2,56,358.25. Finally income of samiti has been computed including excess of income over expenditure ₹ 23,65,833.26 as total income declared as per return and various disallowance of ₹ 5,22,184.25 assessed at ₹ 28,88,017.51. 5.3 In A.Y. 06-07, Assessing Officer vide assessment order dated 29.12.2008 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity of assessee has not changed and facts and circumstances are same. Moreover, order of CIT(A) pertaining to A.Y. 03-04 and claim of exemption u/s. 10(23c)(iiiad) has been upheld by us vide para 3 of this order, inter alia stating that samiti is satisfying the all four conditions of Section 10(23c)(iiiad) . As stated above, assessee samiti is imparting education and exist solely and exclusively for education purposes and not for purpose of profit and not doing any other business as there is no other source of income from any other business and the aggregate receipts does not exceed the prescribed limit i.e. one crore. So, the disallowance of claim of exemption u/s. 10(23c)(iiiad) is not justified as there is no justification to assess income of assessee as business income and to disallow the expenditure treating the entity as business organization. Assessee samiti have been allowed to registration u/s. 12A of Act, with effect from 1.4.2000, by ITAT vide its order dated 13.05.2011 inter alia held that assessee satisfies list of genuineness of activities of institution as per objects of institution. In view of above, CIT(A) justified in granting relief to assessee in all these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rting education and exist solely and exclusively for education purposes and not for purpose of profit and not doing any other business as there is no other source of income from any other business and the aggregate receipts does not exceed the prescribed limit i.e. one crore. Accordingly, the disallowance of claim of exemption u/s. 10(23c)(iiiad) was not justified as there is no justification to assess income of assessee as business income and to disallow the expenditure treating the entity as business organization. The exemption u/s. 10(23c)(iiiad) is statutorily allowable to assessee if all conditions are fulfilled by assessee as done in this case. 7.4 Assessee has deducted TDS on payments of ₹ 9,60,000/- made for salary ₹ 7,20,000/- and hostel rent of ₹ 2,40,000/- and has deposited ₹ 36,720/- on 08.02.2008, ₹ 40,800/- on 08.02.2008, ₹ 31,710/- on 17.03.2008, copies of TDS challans was kept on record. Provisions of Section 40a(ia) are to govern profits and gains of business and profession which is not applicable to assessee as samiti is not doing any business or profession and the income of samiti is exempted u/s. 10(23c)(iiiad). Addition ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
