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TMI Blog2017 (12) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant : Shri Vipul Joshi For The Respondent : Ms. Hemalatha ORDER Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order by the Commissioner of Income Tax (Appeals)-1, Mumbai ( CIT(A) for short) dated 08.09.2016 and pertains to the assessment year (A.Y.) 2011-12. 2. The grounds of appeal read as under: 1.1 The Learned Commissioner of Income - tax (Appeals) - 1, Mumbai, [ Ld. C1T (A) ] erred in confirming the action of the A.O. in denying the benefit of exemption u/s. 11 of the Income - tax Act, 1961 [ the Act ] to the Appellant. 1.2 The Ld. CIT (A) erred in confirming the action of the A.O. in holding that the case of the Appellant was covered by the proviso to section 2 (15) of the Act. 1.3 It is submitted that in the facts and the circumstances of the case, and in law, no denial of exemption was called for. 2 Without prejudice to the above, in the alternative, assuming - but not admitting - that some addition was called for, the computation of the same is not in accordance with the law, is arbitrary and excessive. 3. The assessee in this case is a trust. The main object of the trust is to promo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are commercial in nature and above ₹ 25,00,000. 3.4 Therefore, it is a fit case for denial of exemption u/s.11 in view of the amended section 2(15) w.e.f. 01.04.2009. Further, in view of section 13(8) introduced w.e.f. 1.4.2009 which provides that no exemption U/s.11 shall be available to such entities, which cannot be construed to be charitable on account of the above amended section 2(15). Penalty proceedings u/s 271(l)(c) of the IT Act 1961 are initiated separately. 4. Against the above order, the assessee appealed before the ld. CIT(A). The ld. CIT(A) upheld the order of the assessing officer by distinguishing the case laws relied upon by the assessee. The learned CIT-A concluded as under: The appellant submitted that the AO has wrongly treated its activities as business activities and applied proviso to section 2(15). In this regard it is mentioned that the appellant has receipts of ₹ 22.94 lakhs from coaching camp during the year. As per Income Expenditure A/c for the year ending 31 March 2011, expenditure is only ₹ 12.06 lakhs and thus there is a profit of more than ₹ 10 lakhs. This is a recurring activity of the appellant as is evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very activity with respect of which registration u/s. 12 is granted and is in force, the learned counsel referred to following case laws: 1. PHD Chamber of Commerce Industry vs. DIT(E) [2012] 357 ITR 296 (Del). 2. CIT vs. Lucknow Development Authority [2014] 98 DTR (All) 183 3. Society of Indian Automobile Manufacturers vs. ITO(E) [2016] 159 ITD 659 (Del-Trib). 4. Hoshiarpur Improvement Trust vs. ITO [2016] 45 ITR 682 (Amritsar- Trib) 7. For the applicability of proviso to section 2(15) vis-a-vis a Sports Association, the learned counsel of the assessee placed reliance upon the following case laws: 1. Tamil Nadu Cricket Association vs. DIT (E) [2014] 360 ITR 633 (Mad HC) 2. LD. CIT(A) vs. Delhi Golf Club Ltd. (ITA No.1757 of 2010, order dated 30.03.2011) 3. ITO (E) v/s. Chembur Gykhana [2017] 164 ITD 279 (Mum-Trib) 4. Bombay Presidency Golf Club Ltd. vs. DIT(E) [2012] 149 TTJ 471 (Mum) 5. Delhi District Cricket Association v. DIT(E) [2015] 38 ITR (T) 326 (Del-Trib) 6. Tamil Nadu Cricket Association vs. DDIT(E) [2015] 42 ITR (T) 546 (Chennai-Trib) 7. DDIT(E) vs. All India Football Federation [2015] 43 ITR 656 (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et Association (Supra) in a case where the assessee is a Cricket Association was receiving income from holding of matches and was receiving sums therefrom was denied exemption on the ground that it was engaged in the activities in the nature of trade or commerce or business. The Hon ble High Court reversed the order holding that substantial/regular surplus cannot taint receipts as arising from business/commerce. By the volume of receipt one cannot draw inference that the acivity is commercial. I find that this case law applies to all fours to the present case. Here also the authorities below have drawn adverse inference on the ground that amount received from the coaching camp being less than the expenditure incurred. Similarly, in the case of ICAI vs. DGIT(E) [2013] 358 ITR 91 (Del), the Hon ble Delhi High Court has expounded as under: ( a) There was no finding that the predominant object in doing their activities was to generate profits. ( b) These activities were ancillary activities to the main activity/ object. ( c) The surplus generated out of these activities is utilised towards the infrastructure development and other student / members related activiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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