TMI Blog2022 (10) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... has derived the income from the property. Therefore, the earning of income from the property on allowing others to use the hall and earn Hall Hiring Charges and other royalty income is nothing but income derived from the property and ultimately such income was applied for the charitable purpose. We also observe that Assessing Officer rejected the exemption with the observation that assessee has not maintained separate books of accounts, we observe that assessee is maintaining separate ledger for earning this income and also maintaining separate bill book for this purpose. This amounts to maintenance of separate Books of Accounts and the income is applied for the object of the Trust. Therefore, this will satisfy the maintenance of the separate Books of Accounts. As decided in case of Acharya Jiyalal Vasant Sangeet Niketan [ 2021 (4) TMI 113 - ITAT MUMBAI] . it is well understood that teaching of Indian Classical Music is within the field of education . The activities of the studio are carried on in order to achieve the main object of the Trust and cannot be construed as business. As mentioned earlier, since the trust is engaged in education, the proviso to section 2(15) does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act observed that the exemption u/s. 11 of the Act is not available in respect of such income of a Trust or an Institution which is earned from such business, which is not incidental to the attainment of the objectives of the trust and for which no separate books of accounts are maintained by the assessee. 5. Further, Assessing Officer observed from the Memorandum of Association of the assessee that the objects of the assessee is educational and he rejected the submissions of the assessee that income from Hall Hiring Charges is from such business which is not incidental to attainment of objectives of the Trust. He observed that giving school hall for hiring to other parties for Prarthana Sabha, Wedding Ceremony, Engagement Ceremony etc., cannot be called incidental to attainment of objects, which is 'Educational. 6. Further, Assessing Officer observed that application of any income towards attainment of objective of trust does not make it fall in the category of incidental income. In order to get eligible for exemption u/s.11 of the Act, is such business itself should be incidental to the attainment of objective of the Trust. However, he observed that for allowing e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The assessee prays that: i) exemption may be granted u/s 11 to receipts by way of hall hiring charges of Rs. 11,81,000/ and royalty of Rs. 9,41,000/-; ii) recovery of demand in dispute may be directed to be kept in abeyance till hearing and final disposal of the appeal; iii) any other relief your honours may deem fit. 9. At the time of hearing, Ld. AR of the assessee submitted that the main object of the institution is education and during the year assessee has given the hall to the ceremonies etc., and earned Hall Hiring Charges and royalty from caterers, this income earned by the assessee is wholly applied for the purpose of education and he brought to our notice the income and expenditure account of the assessee. 10. He submitted that Assessing Officer treated the above income as business income and denied the exemption u/s. 11 of the Act. In this regard he brought to our notice Trust deed and relevant clause of the deed to explain that the assessee is engaged mainly for the purpose of imparting education. In this regard he brought to our notice that Assessing Officer also denied the exemption with the observation that assessee has not maintained separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso observe that Assessing Officer rejected the exemption with the observation that assessee has not maintained separate books of accounts, we observe that assessee is maintaining separate ledger for earning this income and also maintaining separate bill book for this purpose. This amounts to maintenance of separate Books of Accounts and the income is applied for the object of the Trust. Therefore, this will satisfy the maintenance of the separate Books of Accounts. 14. In this regard, we observe that similar issue come up before Coordinate Bench in the case of Acharya Jiyalal Vasant Sangeet Niketan v. ITO (Exemption) (supra) and held as under: - 7. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In Sri Thyaga Brahma Gana Sabha (supra), the assessee is a registered Trust and is the owner of the hall called Vani Mahal . For the AY 1973-74, the AO, after referring to the objects of the assessee, adverted to different types of membership and, thereafter, proceeded to compute the total income of the assessee. The AO denied the exemption claimed by the assessee u/s 2(15) of the Act. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial gatherings to promote comradeship among members. The assessee started a dramatic wing called Sri Thyaga Brahma Gana Sabha Amateurs to stage dramas. Thus, the assessee is also doing all other things which are incidental or conducive to the attainment of the above objects. Therefore, a plain reading of the object clauses contained in the rules and regulations of the Sabha would definitely go to show that the main purpose and object of the assessee is to impart education in several branches of fine arts. Further observing that according to section 2(15) of the Act, charitable purpose includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit, the Hon ble High Court concluded that : 25. As already pointed out, in the present case, Vani Mahal was let out to others whenever the assessee was not utilizing it. Even assuming that the net income of the Sabha is from an activity, the question is whether it is for profit. In the objects of the society, nowhere it is stated that earning of profit is its object. Therefore, there is no profit motive in runnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing scientific training in Hindustani Classical Music and Light Music. The trust has a studio namely Ajivasan Sounds which is used for the purpose of training students in professional singing and also the same is made available to various artists for the purpose of recording. We find that the gross receipts are only Rs.16.72 lakhs which subsidize the fees for Rs.33.01 lakhs for 785 students which works out to Rs.4206/- per student per year. In the instant case, the maintenance of studio is intrinsic and in pursuance of the objects of the assessee which is education. It is well understood that teaching of Indian Classical Music is within the field of education . The activities of the studio are carried on in order to achieve the main object of the Trust and cannot be construed as business. As mentioned earlier, since the trust is engaged in education, the proviso to section 2(15) does not apply as clarified by CBDT Circular No. 11 dated 19.12.2008. As mentioned earlier, in the case of Sri Thyaga Brahma Gana Sabha (supra), the Hon ble Madras High Court affirmed the order of the Tribunal in holding that letting out of building did not involve profit-earning activity eve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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