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2016 (5) TMI 361 - ITAT DELHI

2016 (5) TMI 361 - ITAT DELHI - TMI - Exemption u/s 11 - whether miscellaneous income earned by the assessee can be considered as receipts from rendering services, in relation to trade, commerce or business, as specified in the proviso to section 2(15)? - Held that:- Activity carried on business principles does not mean that the assessee was carrying on business. It is clear from material on record that all activities of the assessee are directed towards achieving its main object of promoting ex .....

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les that would not make any difference to the claim of the assessee. A breach of a duty by public or private holder of an office cannot change the character of office or institution. Thus even if it is proved that certain favours were done by the Executive Committee in allotment of quota that would not make the assessee a non-charitable institution. For all the above reasons, we hold that assessee is a charitable institution to which provisions of section11 are applicable. The provisions of sect .....

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SHRI J.SUDHAKAR REDDY, AM For The Appellant : Sh. KK Jaiswal, D.R. For The Respondent : Sh. Kidus Puri, C.A., And Shri Baldev, C.A. ORDER PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER These two appeals are filed by the Revenue directed against the order of the Ld.Commissioner of Income Tax (Appeals)-XXI, New Delhi dated 30th November, 2012 for the Assessment Year (A.Y.) 2009-10 and 2010-11. The Cross Objection has been filed by the assessee in ITA 645/Del/13 for the A.Y. 2009-10. 2. Facts in brief: Th .....

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the that the assessee is not entitled to exemption under section11 of the Act, as it was carrying on business. On appeal the Income Tax Appellate Tribunals held that the assessee is entitled to exemption under section11 of the Act. Subsequently an amendment was brought to Section 11 (4A) of the Act and the assessee was required to maintain separate books of account. The A.O. again denied exemption under section11 of the Act. On appeal the issue was decided in favour of the assessee. The Hon ble .....

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s 2008-09 the Assessing Officer accepted the claim of the assessee that the income in question is exempt under section11 of the Act. During the impugned Assessment Year 2009-10, the Assessing Officer held that the assessee is a charitable organisation which falls under the category advancement of any other object of general public utility as defined u/s 2(15) read with Section 11 of the Act and that the newly inserted proviso to Section 2(15) of the Act is attracted in this case and the assessee .....

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ee carried the matter in appeal. 2.1. The First Appellate Authority called for the remand report from the Assessing Officer after receiving written submissions along with affidavits from the assessee. Thereafter he concluded that the issue as to whether the assessee is entitled to exemption u/s 11 of the Act is no more res integra, as the Hon ble Delhi High Court has resolved the issue in favour of the assessee. As there is no change in facts and circumstance of the case he allowed ground No. 1. .....

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and hence exemption under section11 has to be granted. On the issue of depreciation he applied the judgement of the Jurisdictional High Court in the case of Vishwa Jagriti Mission, reported at 20112-TIOL-271-HC-Del-IT and granted relief. On the issue of contribution of ₹ 1.50 course to Apparel HR Development Society the Ld.CIT directed the A.O. to allow the claim after proper verification. 3. Aggrieved the Revenue is in appeal before us on the following grounds. 1. On the facts and in the .....

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the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in directing the AO to allow ₹ 1.50 crores as payment to the APEC HR Development Society, disallowed by the AO after proper verification. 4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing the assessee benefit of S.11 of the Income Tax Act, 1961. 5. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. .....

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cision. We find no infirmity in the same. In the result we dismiss ground No. 1 of the Revenue. 6. Ground No. 2 is whether miscellaneous income earned by the assessee can be considered as receipts from rendering services, in relation to trade, commerce or business, as specified in the proviso to section 2(15) of the Act. The receipts in question are listed out at page 3 of the assessment order. A perusal of the same does not lead us to the conclusion that the assessee is rendering services which .....

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d.Revenue authorities did not keep in mind the distinction that exists between dominant object of Institution and its activities to achieve that object. They also did not appreciate that fashion shows, seminars etc. are required to be carried on educated people on export and economically it has to be carried on business purpose lines by charging fee from the participants to meet administrative and other expenses of the council. It does not mean that any activity in which loss is not suffered is .....

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s a public charitable institute. For the purpose of granting exemption, the dominant or min object is to be seen even if it is found that at some point of time the persons at the helm of affairs did not observe rules and acted in a manner not authorized by rules that would not make any difference to the claim of the assessee. A breach of a duty by public or private holder of an office cannot change the character of office or institution. Thus even if it is proved that certain favours were done b .....

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