Tribunal Partially Allows Appeals on Taxation Issues

National Association of Software & Services Companies Versus ADIT (E) Investigation Circle-1 New Delhi and vice-versa

National Association of Software & Services Companies Versus ADIT (E) Investigation Circle-1 New Delhi and vice-versa - TMI Issues:
1. Disallowance of additions made on the ground of providing specific services to members and commercial nature of activities.
2. Disallowance of expenditure incurred on Global Trade Development Programme.
3. Taxability of activities under section 28(iii) and eligibility for exemption under sections 11 & 12.
4. Treatment of payment made for professional services as application of income towards the objects of the society.

Analysis:

Issue 1:
The first appeal challenged the disallowance of additions based on the nature of services provided to members and the commercial aspect of activities. The appellant argued that the subscription fees received were linked to the turnover of members, indicating a direct connection between services provided and gross turnover. The tribunal examined the distinction between annual subscription fees and fees for specific services under section 28(iii) of the Act. Citing a previous judgment, it was held that subscription fees, as recurring receipts, did not necessarily imply services rendered. The tribunal dismissed the revenue's appeal on this issue.

Issue 2:
The second appeal contested the disallowance of expenditure on the Global Trade Development Programme. The tribunal ruled against the appellant, following a precedent that expenses incurred outside India could not be considered as application of income for charitable purposes in India. The decision favored the Revenue on this matter.

Issue 3:
Regarding the taxability of activities under section 28(iii) and eligibility for exemptions under sections 11 & 12, the tribunal referred to a judgment in the appellant's favor. The tribunal dismissed the Revenue's appeal, stating that the payment made for professional services needed verification by the Assessing Officer. As there was no agreement or evidence presented during assessment proceedings, the issue was remanded back to the Assessing Officer. Consequently, the appellant's appeal was partly allowed for statistical purposes.

In conclusion, both appeals were partly allowed for statistical purposes, with the tribunal issuing a decision on each issue raised. The judgment provided detailed analysis and references to legal precedents to support the conclusions reached by the tribunal.