TMI Blog2022 (10) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration and whether those receipts were also from non-sporting activities. It is no doubt true that the receipts from non-sporting activities earned by the assessee are covered under the proviso to section 2(15) of the Act and the same are also not covered under its objects as mentioned in the Memorandum of Association. Therefore, in view of the above, we deem it appropriate to remand the issue of determination of income eligible for exemption under section 11 of the Act to the file of AO for de novo adjudication. We also direct the assessee to provide the clear breakup of the revenue which it has earned in relation to sporting activities and the revenue which has no relation whatsoever to the sporting activities undertaken at assessee s premises. Since, in preceding assessment years, assessee was held to be eligible for exemption under section 11, therefore, the aforesaid adjudication be made in light of decisions in the case of the assessee, after determining which receipts are similar in nature to the receipts held to be eligible for exemption under section 11 of the Act in preceding years and relief be granted to the assessee to that extent. With the above directions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of AO, denying the exemption of Income U/S 11 read with Section 2(15) ignoring the orders of Hon'ble Tribunal for last more than 10 years including that of AY. 2012-13 order dt. 16.05.2018, which were before him and facts of the case remaining same. 2. WITHOUT PREJUDICE TO THE ABOVE, the Ld. CIT(A) failed to appreciate that Navi Mumbai Merchant Gymkhana order dt. 21.05.2014 which was referred in his order on page 17 was already Ground No. 2 before Hon'ble Tribunal in the order dt. 16.05.2018 of AY. 2012-13. 3. The Ld. CIT (A) erred in not allowing set off of Deficits of the current year, earlier years carried forward of balance amount, (in view of his denial of exemption U/S. 11) however set off of Deficits was allowed to the Appellant by Hon'ble High Court in their order dt. 03.12.2018 in the case of Appellant. 4. The issue arising in grounds no. 1 and 2, raised in assessee s appeal, is pertaining to denial of exemption under section 11 read with section 2 (15) of the Act. 5. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is a charitable trust registered under section 12A of the Act, vide Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(15) of the Act. 6. In appeal, learned CIT(A) vide common impugned order dated 26/08/2019 dismissed the appeal filed by the assessee and upheld the conclusion reached by the AO. The learned CIT(A) held that the assessee earns revenue from activities, which are in the nature of trade, commerce or business and therefore proviso to section 2(15) of the Act is applicable to the assessee s case. Being aggrieved, the assessee is in appeal before us. 7. During the course of hearing, learned Authorised Representative ( learned AR ) submitted that this issue has already been decided in favour of assessee in preceding assessment years. The learned AR further submitted that non-sport activities were undertaken by the assessee in the course of its main objective and the revenue from non-sport activities is less than 20% of the total receipt and therefore both the conditions of proviso to section 2(15) of the Act are satisfied. 8. On the other hand, learned Departmental Representative ( learned DR ) vehemently relied upon the orders passed by the lower authorities and submitted that the decisions rendered in assessee s own case for preceding assessment years, which are subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication, or retention, of the income from such activity; Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year 11. In this regard, it is also pertinent to note that the aforesaid provisos were incorporated in the Act w.e.f. 01/04/2009, and the term object of general public utility was further qualified by few more conditions. During the course of hearing, learned AR referred to the two conditions, i.e. (i) such activities undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) aggregate received from such activity does not exceed 25% of the total receipts, and submitted that assessee satisfy both the conditions and therefore the proviso to section 2(15) is not applicable to the case of the assessee. We find that the aforesaid 2 conditions were incorporated in the proviso to section 2(15) of the Act with effect from 01/04/2016, and therefore, in our considered view, the same are not applicable to the assessment years under consideration. Thus, to be included within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption u/s 11 r.w.s. 2(15) of the I.T. Act. 13. At this stage, it is also pertinent to note that the details of income earned by the assessee in assessment year 2011 12 are neither mentioned in the aforesaid order nor available on record. We further find that the coordinate bench of Tribunal in another decision in assessee s own case in DCIT vs Goregaon Sports Club, in ITA No. 7033/Mum/2016, for assessment year 2012 13, vide order dated 16/05/2018 by referring to the aforesaid two decisions, directed the AO to allow benefit of exemption under section 11 of the Act to the assessee. Even in this decision, only reference is made to the incomes from hiring and royalty earned by the assessee, without further details. 14. In the present case, there is no dispute regarding the object of the assessee club, as noted above from the Memorandum of Association. Only basis on which exemption under section 11 of the Act has been denied is that assessee has undertaken certain activities, different from its object, which are in nature of trade, commerce or business. Further, in the present case, assessee has also agreed to the fact that certain income has been earned by it from non-s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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