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2014 (1) TMI 880 - AT - Income TaxDisallowance on account of business promotion and entertainment expenses – Entitlement for Benefit of section 11 & 12 of the Act – Held that:-The two actions are mutually intrinsically exclusive and the disallowance need not necessarily lead to holding the assessee disentitled to the benefits of Sections 11 and 12 of the Act – Relying upon Assistant Commissioner of Income-tax, Circle -II, Faridabad Versus Idicula Trust Society [2012 (5) TMI 137 - ITAT DELHI] - if an assessee has extended any undue benefit to a person mentioned in Section 13 (3),that amount would not be considered as application of income for the purpose of fulfillment of objects of the Society and the benefit under Sections 11 and 12 would not be available of such amount - There is nothing on record to dispute the charitable nature of the assessee trust, as envisaged in its Trust Deed - The element of profit would not render such charitable nature otiose - there is no paradox in the findings recorded by the CIT (A) in firstly upholding the disallowance of business promotion and entertainment expenditure and then, holding the assessee entitled to the benefits of Sections 11 and 12 of the Act – Decided against Revenue. Disallowance of Advertisement expenses – Expenses incurred for commercial activities or not – Held that:- The object of the assessee trust is education - The expenditure in question has been incurred for inviting applications for the Hotel Management course and the Business Administration course, besides for the enhancement of the IMT brand name - the Assessing Officer observed that this expenditure indicated the commercial and non- charitable motive of the assessee, this observation formed the sole basis for the disallowance, without anything having been brought by the Assessing Officer on record as to how such expenditure was not in line with the object of the assessee trust – thus, there was no occasion for making any ad hoc disallowance – Decided against Revenue. Allowability of Exemption u/s 11/12 of the Act – Assessee not recognized in India – Held that:- As held in Delhi Music Society vs. DGIT [2011 (12) TMI 124 - DELHI HIGH COURT] – ‘education' does not mean schooling only and it is not confined to scholastic instruction only, but other forms of education are also included within its definition - The assessee has been show caused by the AICTE - the assessee's proposal for registration under the AICTE Regulations, 2005, stands considered by the Hearing Committee of the AICTE and the institution has been advised to submit the documents regarding the completion of the institutional building and other facilities as per the norms within six months' time - This combined with the fact that the application of the Trust is hitherto pending disposal with the AICTE, goes to show that nothing material hinges on the non-registration with the AICTE and the programmes conducted with the OBU are perfectly in order – Decided against Revenue.
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