TMI Blog2004 (10) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... s and incurred an expenditure of Rs. 2,50,600 towards the same, out of donation receipts of Rs. 12,77,239. Only a small portion amounting to Rs. 1,30,505 is paid as donations. It was also noticed that the music programme conducted was meant to promote the trade of a company known as M/s. Ganjam Nagappa Sons Pvt. Ltd. wherein the trustees of the appellant trust are also directors. Since at the music programme, advertisement, banners of M/s. Ganjam Nagappa Sons Pvt. Ltd. were displayed, and on the tickets for the said music programme the logo and the name of the said company was printed. Invitations for the said programme were extended only to a selected few and the programme was not open to the general public. 2.1 Further, another significant issue was that a sum of Rs. 9,00,000 was withdrawn from the amount of assessee trust by one of the trustees and only after a gap of nine months the said amount was deposited back into the bank account of the assessee trust. Assessing Officer held that this was a case of diversion of funds for purposes other than the objectives of the assessee trust. 2.2 Learned CIT(A) after considering the argument advanced held as under : "After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documentary evidence, I am inclined to agree with the Assessing Officer s observations in this regard, and in my considered opinion the explanation offered by the AR that these amounts were withdrawn by the trustees to be utilized towards purchase of a building for housing its offices, and that as the negotiations did not materialize, the amount was remitted back to the account of the Trust within the accounting period, is not acceptable. As already mentioned above, since no supporting evidence in the form of documents like details of the property intended to be purchased, the name of the owner of the property and the details of any negotiations have been furnished either during the course of assessment proceedings or during the course of appellate proceeding, in spite of the opportunity given to the AR, I hold that Assessing Officer s action in this regard warrants no interference. In view of the above discussions, I am of the considered opinion that the provisions of section 13(2)( g ) is clearly attracted and hence, the appellant is not entitled to get its income exempt under sections 11 and 12 of the I.T. Act, 1961." The assessee is in further appeal before us. 3. Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne months which has caused loss of interest to the Trust. The fact as noted by the Assessing Officer shows that this is not the first year when the assessee is conducting such musical programme but it is an annual feature since several years. The following table will reveal the above facts. Financial year Donations Donations Paid Expenditure on music ending Received programme (in Rupees) 31-3-2001 12,77,239 1,30,505 2,50,601 31-3-2000 6,42,129 1,89,006 4,21,379 31-3-1999 4,43,356 45,506 3,90,750 As to the query from the Bench, learned counsel for assessee submitted that this is the only year when exemption is denied on this ground. The appellant was conducting music programmes towards realizing its objects. The object clauses of the deed creating the appellant at clause ( iii )(7) of trust deed clearly indicates that along with the other objects the Trust could "undertake, propaganda, promote, organize and arrange and to grant donations or financial assistance to associations or institutions for arranging/holding lectures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes mainly to promote traditional classic Indian music the existence of which is becoming extinct day by day due to the entry of western music in India. For this purpose, right from the day of registration, the appellant has conducted several shows in a prominent location in Bangalore to enable the general public to make the utmost use of it. Such shows not only helps in survival of Indian classical music but also encourages upcoming artists who are generally invited to perform in the musical shows conducted by the appellant. The musical event conducted by the appellant is marked as a major cultural event in the calendar of Bangalore on lines with those conducted by other prestigious music schools. As seen from newspaper clippings filed, prominent dailies like The Hindu, Indian Express, Deccan Herald and Times of India have in their reviews appreciated the musical shows conducted by the appellant. Various upcoming artists also write to the appellant to perform in these shows. The music programmes conducted by the appellant was solely for the general public. Hence, no tickets were issued for these shows but advertisements were placed in leading newspapers calling upon the general pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue than what the company got from being sponsors of musical shows. Such sponsorship with only a banner on the occasion is more a matter of patronage than getting any benefit of advertisement because the benefit of such patronage is hardly ever commensurate with their contributions. If there is any benefit, the benefit is more for the institution than for the Patron. Persons who sponsor musical performance especially of the classical variety, which unfortunately has poor patronage, can hardly said to derive any benefit except the satisfaction of promoting art. Hence, the Assessing Officer erred in holding that musical shows accrued no benefit to the appellant but was conducted to give publicity mileage to the sponsors. It can also be held that if the said company has availed any benefit, it is not for free. The said company has compensated the Trust to a very large extent by donating a handsome amount of Rs. 12.77 lakhs. Thus section 13(2)( g ) cannot be invoked in such situation to deny the benefit of section 11. 5.1 As regards allowability of expenditure, learned CIT(A) has held that expenditure incurred towards conducting musical programme cannot be considered as for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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