TMI Blog2014 (3) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... rt] - there is no justification to interfere with the order of the CIT(A) in deleting the addition – The AO has not brought any evidence on record to suggest that the assessee was conducting its affairs on commercial lines with motive to earn profit - The AO merely considering the activities of construction of flats and selling held the same to be business in nature – thus, the registration u/s. 12AA is effective – Decided against Revenue. - ITA No. 255/Agra/2013 - - - Dated:- 28-2-2014 - Shri Bhavnesh Saini And Shri Pramod Kumar,JJ. For the Appellant : Shri R. K. Agarwal, Advocate For the Respondent : Shri Waseem Arshad, Sr. D.R. ORDER Per Bhavnesh Saini, J.M.: This appeal by the Revenue is directed against the order of ld. CIT(A), Muzaffarnagar dated 11.04.2013 for the assessment year 2008-09, challenging the deletion of addition of Rs.11,47,731/- and holding that the assessee is eligible for exemption u/s. 11, 12 of the IT Act. 2. The facts of the case are that the assessee is an AOP engaged in the activity of development of Aligarh City. Return declaring Nil income was filed on 29.09.2008. During the course of assessment proceedings the AO vide o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and electrical work. The cost of land and development of park and road was further added to the cost of the Manyavar Kanshi Ram Avas Yojana. The total selling price was Rs.1,06,50,000/- and the total cost was Rs.95,02,269/-resulting in surplus of Rs.11,47,731/-. The surplus was towards the overhead and establishment expenses which worked out to approximately 10%. Hence as per the assessee there was no profit component. 2.3 It was further argued by the assessee that amendment to section 2(5) of the Act was not a blanket ban for institution involved in activities for 12-2008 inserted post amendment of section 2(15) stipulated that the charitable nature of the assessee would be determined on case to case basis. Thus it was pleaded that the assessee was entitled for exemption. It was submitted that activities of the assessee were accepted as activities of 'General Public Utility' by the AO during AYs. 2004-05 and 2005-06. Accordingly, as there had been no change in nature of activities or purposes of the activities hence the charitable status of the assessee stood proved and accepted by the department. However, the AO rejected the submissions made by the assessee and held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to be deleted. The case laws cited by the appellant supports the contentions made by the appellant. Grounds of appeal Nos.1 to 5 are allowed. 4. In result, the appeal is allowed. 4. The ld. DR relied upon the order of the AO and submitted that since the activities of the assessee were for the construction of flats and selling the same, therefore, it was mainly the business in nature. The ld. DR relied upon the order of the ITAT, Amritsar Bench in the case of Jalandhar Development Authority vs. CIT, 35 SOT 15 (124 TTJ 598). 5. On the other hand, the ld. counsel for the assessee reiterated the submissions made before the authorities below and submitted that the nature of activities are same as carried out in earlier years as well as subsequent years. It is submitted that on identical facts, the AO accepted the claim of assessee in preceding assessment years 2003-04, 2004-05 and 2005-06 U/s. 143(3). The copies of assessment orders are placed on record. He has further submitted that even in subsequent assessment year 2010-11, the AO accepted the similar claim of assessee u/s. 143(3) vide order dated 25.03.2013. Copies of the balance sheet of earlier and subsequent assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of M.P. High Court in the case of Godavari Corporation Ltd., 156 ITR 835, decision of Delhi High Court in the case of Escorts Ltd., 338 ITR 435 and decision of Punjab Haryana High Court in the case of Vikas Chemi Gum India, 276 ITR 32. Considering the facts of the case in the light of above principle of law, we do not find any justification to interfere with the order of the ld. CIT(A) in deleting the addition. The ld. counsel for the assessee also relied upon the decision of Hon'ble Allahabad High Court in the case of CIT vs. Lucknow Development Authority in which in various paras, it was held - For the applicability of proviso to section 2(15), the activities of the trust should be carried out on commercial lines with intention to make profit. Where the trust is carrying out its activities on non- commercial lines with no motive to earn profits, for fulfilment of its aims and objectives, which are charitable in nature and in the process earn some profits, the same would not be hit by proviso to section 2(15). The aims and objects of the assessee-trust are admittedly charitable in nature. [Para 26] Mere selling some product at a profit will not ipso facto ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
