9911796707
TMI Blog2024 (6) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... no loss company registered under the Companies Act, 1913. This institution is in existence since then and no records were filed before us relating to previous method of accounting and claim made by the assessee. However, as per the fact available on record, as observed that the AO has rejected the claim made by the assessee in return of income claiming exemption u/s 11 of the Act and proceeded to make the addition only the gross receipts earned by the assessee as their income, however, as per law the gain/profit earned by the assessee alone should be brought to tax and not the gross receipts. Thus we are inclined to remit this issue back to the file of Jurisdictional Assessing Officer to re-do the assessment denovo after giving proper oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition with the observation that the registration of claim u/s 11 of the Act is not proper within the mandate of Section 143(1) of the Act. Further, he observed that the assessee has stated that it is a non-profit organization and the contributions received by it are exempt in view of the principle of mutuality concept. Even though the assessee has submitted the details and relied on the several decisions in support of the claim in terms of doctrine of mutuality, however, he observed that the assessee has not provided any cogent material like mandatory forms 10B/10BB in support of its claim for exemption u/s 11 as mandatorily required. 4. Aggrieved, with the above order, the assessee is in appeal before us raising the following grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A)'s erred in not repelling the submission made that in Schedule ER the application of income to the extent of Rs. 23,64,753/- has been exempted which is contrary to final disallowance thereby violating Principle of Natural justice. 8. The action of the Ld. ADDL/JCIT (A)'s in Upholding action of the Ld. AO. a) In making adjustment under section 143(1) and disallowing the entire expenditures of Rs. 23,64,753.00 being highly debatable, is illegal arbitrary, unwarranted, uncalled for and against the facts and circumstances of the case. b) In making disallowance under section 143(1)(a) of entire expenditure claimed in the return amounting to Rs. 23,64,753.00 is illegal arbitrary, unwarranted, uncalled for and against the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 11 of the Act, since, the Assessing Officer has brought to tax the gross receipt as income of the assessee. He prayed that the taxable income has to be net income not the gross receipt. Accordingly, he prayed that this issue may be remitted back to the Assessing Officer to determine the taxable income as per law. 6. On the other hand, the Ld. DR objected to the submissions of the Ld. AR and submitted that the assessee is not registered beneficiary u/s 11 of the Act, therefore, the findings of the lower authorities are proper and relied on them. 7. Considered the rival submissions and material placed on record, I observed that even though the assessee has claimed exemption u/s 11 without proper documentation and it is admitted fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The Bangalore Bench of the Tribunal in the case of HMV Educational Cultural and Social Trust (supra) restored the matter to the AO with a direction to assess only the net income and not the gross. The relevant finding of the Bangalore Bench of the Tribunal reads as follows: 7.3 The assessee has not raised the plea before the Income-tax Authorities that it has to be given deduction u/s 57 of the I.T. Act, in respect of expenditure for earning the interest income. However, inspite of such plea not being raised before the lower authorities, we are of the view that since the fundamental principle under Income-tax Act being that only net income has to be taxed (i.e.. gross receipt minus allowable expenditure), this plea of the assessee has to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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