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TMI Blog2016 (9) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... iness’’ within the meaning of first proviso to Sec. 2(15) and further without considering the plea of assessee that it had not violated Sec. 11(5) or third proviso to Sec. 10 (23C) (iv) of the Act. So, considering the judicial aspects and objectives, we are of the opinion that the activities are within the ambit of charitable purpose and we upheld the order of Commissioner of Income Tax (Appeals) who has dealt on subject and its implication and grounds viz-a-viz explanations of the assessee and allowed the assessee appeal and we upheld the order of Commissioner of Income Tax (Appeals) and dismiss the grounds of the Revenue. - Decided in favour of assessee - I.T.A. No.1677/Mds/2015 - - - Dated:- 5-8-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER For The Appellant : Shri. R. Meenakshisundaram For The Respondent : Shri. Durai Pandian, Addl. CIT ORDER PER G. PAVAN KUMAR, JUDICIAL MEMBER: The appeal filed by the Department is directed against order of the Commissioner of Income-tax (Appeals)-17, Chennai in ITA No.405A/14-15, dated 24.04.2015 for the assessment year 2012-2013 passed u/s.143(3) and 250 of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income Tax (Exemptions) Chennai dated 27.05.1994. The assessee filed Return of income on 24.09.2012 admitting Nil income. Subsequently, the case was selected for scrutiny and notice u/s.143(2) of the Act was issued. In compliance to notice, the ld. Authorised Representative of assessee appeared from time to time and filed details. The ld. Assessing Officer is of the opinion that consequent to amended provisions of Sec.2(15) of the Act w.e.f. 01.04.2009, there is a radical departure u/s.2(15) of the Act excluding those trust and institutions with object of general public unity having any activity in the nature of trade or commerce or doing service in relation to trade and commerce. The ld. Assessing Officer in the assessment proceedings, found the activities and objects of the assessee as under:- a) To promote the advancement of music and other form of fine arts; b) To promote artistic and cultural expression through Drama, Dance, Music Conferences and cognate activities; c) To arrange for the exposition of art by competent artistes and to encourage deserving talent; d) To conduct schools called sri thyaga bramha gana sabha music and dance schoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e form of collections for usage of hall and relied on the provisions of Sec.13(8) of the Act and assessee has claimed entire cost of asset claimed as application of income in earlier years at the time of purchase. The ld. Assessing Officer has disallowed depreciation claimed on such asset during the year and allowed depreciation only on assets purchased during the year and relied on the following judicial decisions:- 1. Nectar Beverages Limited 314 ITR 314 (SC). 2. J.K. Synthetics Limited (1992) 65 Taxman 420 (SC). 3. Lissie Medical Institutions vs CIT 2012) TIOL 3030 (Ker) 4. DIT vs. M/s. Charanjiv Charitable Trust Delhi High Court in ITA No.321 to 323/2013, dated 18.03.2014 And made addition of corpus fund, deprecation and passed assessment order u/s.143(3) of the Act dated 10.11.2014 treating assessee as AOP. Aggrieved by the order, the assessee filed an appeal before Commissioner of Income Tax (Appeals). 4. In the appellate proceedings, the ld. Authorised Representative of assessee argued the grounds and explained that the action of the ld. Assessing Officer is bad in law on invoking provisions of Sec. 2(15) and Sec. 12A(a) of the Act. The ld. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities are for fees received is unfounded and without any basis when the accounts show loss without the interest receipts. Thus invoking first proviso to sec.2(15) of the Act is not correct and the assessee is entitled to exemption u/s 11 read with sec.2(15) of the Act. In view of all the ratio delineated above the assessment order dated 10.11.2014 of the AO passed u/s 143(3) of the IT Act is not valid, proper, just and maintainable. Since the society is entitled for exemption u/s 11 of the Act as discussed above, the additions on account of corpus donation and depreciation got deleted automatically and no separate adjudication is required on the two issues. The contribution to the CM's relief fund is treated as application of income and hence the addition of the same is also deleted. Therefore, under the circumstance, I am inclined to allow the appeal dated 09.12.2014 of the assessee. Accordingly, the AO is directed to delete all the additions made and accept the return filed. The levy of interest u/s 234B of the Act is also deleted as it is only a consequential act . Aggrieved by the Commissioner of Income Tax (Appeals) order, the Revenue has assailed an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no dispute that assessee was engaged in the advancement of music and fine arts, which was culturally important in the State of Tamil Nadu. The objects of the assessee as mentioned in its Memorandum of Association placed at paper-book page No.2, read as follows:- 1. To promote the advancement of music and other fine arts and traditional arts. 2. In pursuance of the above objects, to hold musical entertainments, discourses, dance recitals, group singing, dramas, exhibitions, lectures, seminars, competitions, etc. 3. To arrange for the exposition of music and other arts by competent artists and to encourage deserving talent. 4. To conduct schools for imparting instructions in the above arts on correct lines and thus afford facilities for the propagation and development of such arts. 5. To do such other things or undertake activities as are incidental and are conducive to the attainment of the above objects. As held by the co-ordinate Bench of this Tribunal in the case of Mylapore Fine Arts Club (supra), there cannot be two opinions that in the State of Tamil Nadu, which is a land of music, dance and classical activities promoting the advancement of such art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first proviso, where such receipts were less than Rs. 10 lakhs. The question here is whether sponsorship fee, which forms substantial part of the amounts listed above, can be considered as receipt from activity in the nature of trade, commerce and business. In our opinion, advancement of traditional musical culture of Tamil Nadu and conducting music programmes for that purpose, where such music and dance programmes were sponsored by various persons and sponsorship fee so received, distributed among the artists, can never be considered as an activity in the nature of trade, commerce or business. When a person sponsors a music programme and sponsorship fee is paid to artist concerned, we cannot say that sponsorship fee is a receipt in the hands of the assessee which is in the nature of trade, commerce or business. Similarly, conducting music coaching for the purpose of advancement of various traditional music forms of State of Tamil Nadu, which is an integral part of cultural life of people of Tamil Nadu, cannot also be considered to be an activity in the nature of trade, commerce and business. This can at the best be considered as an educational pursuit. When there are colleges r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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