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2019 (3) TMI 1920 - AT - Income TaxExemption u/s 11 - Charitable activity u/s 2(15) - Claim under the head ‘objects of general public utility’ OR under the head ‘preservation of environment’ - as upto assessment year 2008-09, had been claiming exemption u/s 11 under the head ‘objects of general public utility’ whereas from assessment year 2009-10 the assessee had claimed the exemption under the head ‘preservation of environment’ - HELD THAT:- We find that vide order [2018 (12) TMI 915 - ITAT LUCKNOW] the Tribunal has dismissed the appeals of the Revenue for assessment year 2002-03 to 2008-09 on similar grounds though in those years the assessee had claimed exemption under the head ‘objects of general public utility’. However, during the year under consideration the assessee had claimed exemption under the specific head ‘preservation of environment’ (including watersheds, forest and wildlife) as this specific head has been included in the definition of section 2(15) w.e.f. 01/04/2009. The activities of the assessee remained same and the activities being carried out by the assessee has already been held charitable in nature. Learned CIT(A), while allowing relief to the assessee, has held that if the assessee falls into a specific category then specific category will have precedent over the general category. The matter regarding registration has attained finality when Hon'ble Supreme Court dismissed the appeal of the Revenue. The reasoning of the Assessing Officer that activity of the assessee do not qualify under head ‘preservation of environment’ (including watersheds, forest and wildlife) has also been decided by the Tribunal for assessment year 02-03 to 08-09 in favour of the assessee. Disallowance of expenses towards forest development expenses which the appellant claimed as utilization of funds in relation to the discharge of statutory functions - HELD THAT:- CIT(A) has rightly relied on the CAG report wherein the auditor had not pointed out anything adverse with regard to the expenses and therefore, has rightly held that the expenses were shown in line with the objects and therefore, we do not find any infirmity in the same. In view of the above, ground of the Revenue’s appeal is dismissed. Disallowance of expenses debited under the head material loss - HELD THAT:- CIT(A) has held that such losses are inherent to the activities such as forest fires or theft of logs in the forest by mischievous/criminal elements. The learned CIT(A) has further held that loss of material has been approved by the higher authorities of the corporation which is based on the report of the Log Manager and we agree with this finding that the amount debited by the assessee towards material loss has been audited by CAG and the accounts have been approved by the State Legislature. Therefore, we do not find any infirmity in the order of learned CIT(A) on this issue - Ground of the Revenue’s appeal is also dismissed.
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