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2018 (10) TMI 436 - AT - Income TaxBenefit of section 11 & 12 denied - receipt of sponsorship income from India and abroad - commercial receipts - AO observed that assessee is hit by proviso to section 2(15) - assessee is neither registered under FCRA nor permission been taken from RBI for receiving foreign funds into the Society under FEMA - Held that:- As in India Trade Promotion Organisation vs. DGIT [2015 (1) TMI 928 - DELHI HIGH COURT] held that mere receipt of fee or charge cannot be said that the assessee is involved in any trade, commerce or business. The assessee is a charitable society and is involved in providing the medical facilities and spread the awareness to the public at large and is fall in the last category i.e. "advancement of any other object of general public utility". However, on perusing the material on record, there is there is no proper justification for denying the exemption and the Proviso of section 2(15) is not attracted in this case - CIT(A) has rightly directed the AO to allow the exemption u/s 11(1) of the Act with all the consequential benefits vide order dated 15/9/2015, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue. Non deduction of TDS - assessee has paid as honorarium to the doctors coming from abroad and its cannot be considered as an application of income in India for charitable purposes - Held that:- We find that assessee is not running any hospital towards which this expense has been incurred. The assessee just conducted a seminar for the benefit of its parent body i.e. Escorts Hospital, which is a private company. The expense has been incurred outside India and therefore, it is a violation of Section 11(1)(c) and the above transaction is covered under the FEMA Act, for which the approval of the RBI is essential. Since assessee is remitting funds outside India and claiming its as application of income, which is violation of section 11(1)(C), hence, the amount of ₹ 9,76,031/- was rightly disallowed by the AO and accordingly, assessment was rightly completed at income of ₹ 10,10,88,303/- vide order dated 26.3.2013. Case law of DIT(E) vs. National Association of Software and Services Companies [2012 (5) TMI 204 - DELHI HIGH COURT]is directly applicable on the present issue in which the Hon’ble Court has laid down the law that “the State did not like to forgo the revenue in favour of charity outside the country’ held income applied outside India cannot be considered as application of income of the trust in India for charitable purposes - Decided in favour of revenue.
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