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2016 (10) TMI 177 - ITAT MUMBAI

2016 (10) TMI 177 - ITAT MUMBAI - TM - Denial of exemption u/s 11 - whether the assessee is engaged in the business of activities not covered within the meaning charitable as defined in section 2(15) and that the activity of training of cadets was not qualified to be education and also that the assessee has been making profit on continuous basis and without any charitable object as provided under section 2(15)? - Held that:- All the courses may not be approved by the Director General of Shipping .....

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s squarely covered by the ratio laid down by the jurisdictional High Court in the case of Samudra Institute of Maritime Studies Trust, (2014 (9) TMI 575 - BOMBAY HIGH COURT ). Respectfully following the above mentioned judgment of Hon’ble High Court we set aside the order of the ld.CIT(A) and direct the AO to allow the benefit an enumerated under section 11 of the Act by deleting the addition. - Decided in favour of assessee - I.T.A. No.7247/Mum/2012 - Dated:- 22-8-2016 - SHRI SHAILENDRA KUMAR Y .....

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e AO on the ground that the assessee is engaged in the business of activities not covered within the meaning charitable as defined in section 2(15) of the Act and that the activity of training of cadets was not qualified to be education and also that the assessee has been making profit on continuous basis and without any charitable object as provided under section 2(15) of the Act. 3. Facts of the case are that the assessee filed its return of income on 25.9.2009 declaring total income of ₹ .....

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claimed its income to be exempt under section 11 of the Act. Thereafter, scrutiny proceedings were initiated against the assessee and statutory notices under section 143(2) and 142(1) were issued and served upon the assessee. During the course of assessment proceedings, the AO observed that the activities of the assessee were beyond the scope of deduction as provided under section 2(15) of the Act and therefore came to the conclusion that the assessee was not entitled to claim deduction under se .....

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nautical education to all persons of India, Nationality with regard to all aspects of the shipping industry b) And generally to do al such lawful acts and things as are incidental or conducive to the attainment of the aforesaid object 4. Accordingly, the AO issued show cause notice to the assessee dated 14.10.2011 which was replied on 21.12.2011 and the detailed reply of the assessee is reproduced in para 3.12 of the assessment year. After perusing the reply of the assessee, the AO held that th .....

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of the assessee by upholding the assessment order as under : 4. I find that the appellant is certainly engaged in the activities of training the cadets, which by itself cannot be qualified as the "education". There is no merit in the argument of the appellant that issuance of certificate after short term course and training for the same is "education". Respectfully following the order of jurisdictional Tribunal in the case of Gurship Education Trust, Mumbai Vs. ITO ITA No. 47 .....

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income from business. Consequently even the capital expenditure claimed as exempt under section 11 by the appellant amounting to ₹ 22,38,508/- is also rightly added by the AO. Grounds 1 to 3 of appeal are dismissed. 5. The ld.AR vehemently submitted that the case of the assessee is fully covered by the decision of Hon ble Jurisdictional High Court in IT Appeal no.465 of 2012 in Director of Income tax V/s Samudra Institute of Maritime Studies Trust, order dated 7.8.2014 wherein an identical .....

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including the orders of authorities below and case laws relied upon by the parties. We find that the assessee was denied exemption under section 11 of the Act on the ground that the assessee was engaged in imparting training to cadets and not education within the meaning of section 2(15) of the Act and motive of the assessee was earning profit from the said activities. We find that the similar issue has been considered by the Hon ble Jurisdictional High Court in the case of Samudra Institute of .....

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test in concluding that the exemption under section 11 can be availed of by the Respondent - Assessee. In doing so, the Tribunal referred to the objects as set out in the Trust Deed of the Respondent - Assessee. They are to set up, administer and maintain technical training institution at various places in India for pre-sea and post-sea training for the ships and maritime industry as a Public Charitable Institute for education. That is to provide on-board and offshore training and continuing te .....

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the Assessee is giving training in the above area to seamen. All the courses may not be approved by the Director General of Shipping but that by itself is no ground to hold that the purpose is not charitable. The exemption under section 11 can be claimed and bearing in mind the object of the Trust. We are of the opinion that the Tribunal and the CIT (Appeals) have approached the issue correctly and in the light of the definition so also the tests laid down came to a factual conclusion that the R .....

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