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2019 (5) TMI 334

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....its and savings account (ii) Addition of Rs. 1,03,08,215/- received on account of Goa Fest 2010. For this assessee has raised the following five grounds: - "1. On the facts, and in the circumstances of the case, and in law, the leaned Commissioner of Income Tax (Appeal) ('CIT(A)' has legally erred in denying exemption to Applicant under the provisions of Section II to Section 13 read with section 2(15) of the Act. 2. On the facts, and in the circumstances of the ease, and in law, the learned CIT'(A) has legally erred in holding that the Appellant is carrying on an activity in the nature of trade, commerce or business, or an activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration. 3. On the facts, and in the circumstances of the case and in law, the learned CIT(A) has legally erred in holding that annual activity of "Goa Fest 2010" an activity filling well within the approved objects of the association wherein global leaders of advertising world are invited to speak and share knowledge, so vital to the members of the Association, amounts to caring on an impermissible activity in the nature of ....

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....15). The appellant In this regard submitted that it is not carrying out any activity in the nature of trade or rendering service in relation to any trade for tee. However, on perusal of the details regarding the receipts of Goa Fest 261 it is noted that the appellant has received Rs. 4.66 crores from non-members. The list of non-members includes State Bank of India, Airtel, who are neither in the advertisement business nor members of the appellant. Also, the delegate fee from non-members include names like the Sweet shop agran social welfare society, Blue star Ltd, Bharti Airtel, Nestle India, HDFC Bank, etc., who have no relation to the advertisement business as evident from their name itself. Also, the non member delegates include individual names like Karan Rawat, Ajay Kakkad, Sonal Agarwal, Ajay Chandwani, Neha Pandey and Shouri Gupta. From these facts, it may be noted that the Goa rest 2010 was not meant exclusively for the entities engaged in the business of advertisement but was open for all, for which huge fees was charged. As per Income and Expenditure A/c the total receipts were Rs. 6.95 crores. Further, it is noted that the income after claiming expenses the income has b....

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....agencies is not in any way carrying on any activity in the nature of trade, commerce or business nor any activity of rendering any service in relation to any trade, commerce or business for a cess or a fee or any other consideration. We find from the facts of the case that Assessing officer has held the interest amount of Rs. 30,62,564/- as taxable on the premise that the assessee is hit by the first proviso to section 2(15) i.e. to say rendering any service in relation thereto. The only reason contained in paras 1 to 9 of the impugned order is that, if the assessee is not a mutual benefit society .....to be carrying on charitable purpose, by virtue of the newly inserted proviso. Regarding Goa Fest, it was claimed that in furtherance of the objects of this Trade Association, only once a year the assessee holds a fest in Goa and invites eminent speakers from the international advertising world as well as the media with which the members of the assessee are inextricably linked. Thus even by the remotest interpretation, no part of this activity, can be held to be in nature of trade, commerce or business or rendering any service in relation thereto. The entire Goa Fest is wholly and on....

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....ounsel for the assessee is apt for citation here and that is the decision of Hon'ble Delhi High court in the case of CIT (Exemption) vs the Fertlisers Association of India in ITA No.964 and 966 of Delhi/2017 dated 113.11.2017, wherein, exactly on identical facts, Hon'ble Delhi High Court relying on various case laws allowed the claim of exemption under section.11 considering the proviso of section 2(15) of the Act. Hon'ble Delhi High Court observed as under: The assessee Association is a non-profit and non-trading company representing the interests of fertilizer manufacturers, distributors, importers, equipment manufacturers, research institutes and suppliers of inputs, registered under Section 25 of me Companies Act, 1956. In scrutiny assessment for AY 2010-11, the AO was of the opinion that the exemption under Section 2(15) of he Act by virtue of the amendment of 2009 i e that the assessee was engaged in the advancement of general public utility, disentitled it To claim exemption m lax from payment of tax One of the main grounds which influenced the AO to hold as it did, were The sums of money received by the assessee on account of registration charges, etc., for seminars/work....