9911796707
TMI Blog2022 (3) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... out of kalyana mandapa, which is nothing but objects of general public utility and the letting out is being done on a commercial basis by charging exorbitant amount. The amended proviso to section 2(15) of the I.T.Act has application to the facts of the instant case. Section 13(8) of the Act, inserted with effect from 01.04.2009 states that Nothing contained in section 11 or section 12 shall operate so as to exclude any income from the total income of the previous year of the person in receipt thereof if the provisions of the first proviso to clause (15) of section 2 become applicable in the case of such person in the said previous year. Assessee has not been maintaining books of account separately for the business of letting out of kal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature to which the provisions of Section 2(15) of the Act would apply. 4. The learned CIT (Appeals) ought to have appreciated that the proviso to Section 2(15) of the Act has no application to the Appellant-trust and the trust has been recognized for charitable purposes and accordingly registration under Section 12A was also granted. 5. The learned CIT (Appeals) ought to ,have appreciated in the circumstances that denial of exemption under Section 11 of the Act was opposed to law and uncalled for and accordingly he ought to have refrained from sustaining the order of the AO in this regard. 6. The learned CIT (Appeals) ought to have accepted the explanation offered by the Appellant and also ought to have appreciated that the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in this regard and refrained from directing the AO to determine the income under the head income from house property and income from other sources . 12. Without prejudice, the impugned addition as sustained by the learned CIT (Appeals) and also the income enhanced by the learned CIT (Appeals) are arbitrary, excessive and ought to be substantially reduced. 13. For these and such other grounds that may be at the time of hearing, the Appellant prays that the appeal may be allowed. 3. The brief facts of the case are as follows: The assessee for the relevant assessment year 2012- 2013 filed return of income on 25.08.2012 declaring `NIL income after claiming exemption u/s 11 of the I.T.Act. The assessment was selected fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 (judgment dated 30th May, 2011). 4. Aggrieved by the denial of exemption u/s 11 of the Act, the assessee preferred an appeal to the first appellate authority. The CIT(A) after extracting clause 5 and 6 of the Trust deed dated 17.03.1962, held that there is no mention in the trust deed how income generated from running of kalyana mandapa will be utilized for charitable purposes. The CIT(A) by following the judgment of the Hon ble Apex Court in the case of Gangabai Charities v. CIT reported in (1992) 197 ITR 416 (SC) confirmed the denial of exemption u/s 11 of the I.T.Act. Further, the CIT(A) enhanced the income by directing the A.O. to assess the rental income under the head `income from house property and other receipts under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant rent. Therefore, the assessee is not entitled to exemption u/s 11 of the I.T.Act. The learned DR after referring to section 13(8) and section 11(4) of the Income Tax Act, contended that the assessee was not maintaining any separate books of accounts for the business of running of kalyana mandapa, and therefore, even if the business is incidental to the attainment of the object of the Trust, the benefit u/s 11 of the Act cannot be granted. 7. We have heard rival submissions and perused the material on record. The assessee has two kalyana mandapas. One at Jayanagar, Bangalore and other at Chepauk, Chennai. The rent for taking on hire for two days the kalyana mandapa at Jayanagar, Bangalore is ₹ 1,20,000 and ₹ 8,00,000 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the facts of the instant case. Section 13(8) of the Act, inserted with effect from 01.04.2009 states that Nothing contained in section 11 or section 12 shall operate so as to exclude any income from the total income of the previous year of the person in receipt thereof if the provisions of the first proviso to clause (15) of section 2 become applicable in the case of such person in the said previous year. 7.2 Moreover, the assessee has not been maintaining books of account separately for the business of letting out of kalyana mandapa. Therefore, even assuming the business is incidental to the attainment of the objects of the trust in absence of separate books of account, the benefit of section 11 of the I.T.Act cannot be granted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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