TMI Blog2015 (10) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... basis and we uphold the same. - Decided against revenue. - I.T.A.No.4950/Del/2013 - - - Dated:- 24-7-2015 - BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER Appellant by: Shri K.K. Jaiswal, DR Respondent by : Shri Ved Jain, Adv. Paranjal Srivastava, Adv. Shri Ashish Goel, CA ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER This appeal by the revenue has been directed against the order of CIT(A)-XXI, New Delhi dated 13.6.2013 in Appeal No. 328/11-12 for AY 2009-10. Ground no. 4 of the revenue being general in nature needs no adjudication. Remaining grounds of revenue read as under:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 37,86,792/- made by the AO on account of income from Samudaik Bhawan after allowing expenses i.e. net income which was rightly assessed by invoking proviso to section 2(15) of the Income Tax Act,1961. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 8,31,2631- made by the AO on account of income from Fitness Centre after allowing ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 2(15) of the Act rightly brought to tax by the AO. Ld. DR vehemently contended that the CIT(A) deleted the said addition without any basis and justified reasoning, therefore, the impugned order may be set aside by restoring that of the AO on all three issues. 5. Replying to the above, ld. Counsel of the assessee pointed out that the assessee trust was granted registration u/s 12A of the Act dated 3.6.1976 and an order u/s 80G(5)(vi) dated 13.08.2007 which was valid from 1.4.2007 to 31.3.2010 and the assessee was carrying out charitable activities as per its Memorandum of Association right from its beginning. Ld. Counsel further contended that there was no change in the activities of the assessee society in comparison to earlier assessment years and in the assessment year under consideration i.e. 2009-10, therefore, there was no occasion or valid reason for the AO to treat the receipts of the assessee from Samudaik Bhawan, Fitness Centre and license fee in the form of rent from book seller, uniform seller, canteen operator and bank. Ld. counsel pointed out that the AO on the similar set of facts and circumstances granted exemption u/s 11 of the Act on these r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Agarsain Bhawan v) Running a Fitness Centre with sophisticated machines. These machines are not available in the physiotherapy centre, the fitness centre is basically used by the patients of Maharaja Agarsain Hospital. However, the fitness centre is also used by the members of Agarwal Welfare Society (Regd.). 3.1 The fact that the assessee has been providing education, medical relief and relief to poor has been accepted by the AO in his assessment order as well. It is further noticed that there is no change in the object and activities of the organization since last many years. Those years were also scrutinized u/s 143(3) of the Act and the AO has allowed exemption under section 11 of the Act and has treated activities of the appellant as charitable under the meaning of section 2( 15) of the Act. How activities has' changed in AY 2009-10 and the appellant is a non-charitable in the present year is also a main issue to be addressed. 3.2 The appellant was asked to specify the list of activities carried out at the Samudayik Bhawan and Fitness Centre. A perusal of the details reveals that Samudayik and Fitness Centre/ Gymnasium are primarily being used f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of account for its following units:- i) For school under the name Maharaja Agarsain Public School. ii) For hospital under the name Maharaja Agarsain Hospital. iii) For Physiotherapy centre under the name Maharaja Agarsain Hospital (Physio Wing). iv) For other miscellaneous activities under the name Agarwal Welfare Society (Regd) which includes Samudaik Bhawan Fitness Centre . 3.5 Since the basic activity of operating samudaik bhawan and fitness centre has been considered as charitable in nature the issue raised by the AO in the remand report with respect to the quantification of profits received from Samudayik Bhawan and Fitness Centre does not require any specific adjudication. The appellant has applied the complete receipts from both these activities in achieving the basic objects of the society. Thus by no means it can be said that receipts from these activities are taxable or commercial in nature. Both the grounds of appeal No. l and 2 are allowed. 7. In the light of observations of the CIT(A), we clearly note that the AO accepted the fact that the assessee has been providing education, medical relief and relief to the poor as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t without any reasoning and justified basis and the same was rightly deleted by the CIT(A) after due examination and analysis of the facts and circumstances of the case. We are also inclined to hold that the CIT(A) was quite reasonable and justified in conceding that the basic activity of operating Samudaik Bhawan and Fitness Centre was charitable in nature and the allegation of issues raised by the AO in the remand report with respect to quantification of profits received therefrom do not require any specific adjudication, being placed on the wrong premise. 9. Ld. Counsel of the assessee has placed reliance upon the judgment of Hon ble Jurisdictional High Court of Delhi in the case of India Trade Promotion Organization vs Director General of Income Tax(Exemptions) (W.P. (C) 1872/2013 dated 20.1.2015 and submitted that it is clear from the facts of the case that the driving force of the activities is not the desire to earn profit but the object of promoting trade and commerce not for itself but for the nation both within India and outside India. Ld. Counsel also pointed out that in this judgment, Hon ble High Court of Delhi laid down a proposition that when the activities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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