TaxTMI 
TaxTMI 
2017 (12) TMI 344
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....ed in law and on facts in holding that the AO has not brought out any material on record to prove that luxury items purchased by the assessee were being misused by the persons covered u/s 13(3) of the Act. The Cross Objection is filed on the following grounds. 1(A) That the Ld.CIT(A) has failed to adjudicate ground of appeal no.4 specifically raised in the memo of appeal filed before the Ld.CIT(A). The said ground of appeal challenging the additions and disallowances made by the Ld.AO have been omitted from consideration by the Ld.CIT(A). 1(B) That adjustment to Income and expenditure account by the AO i.e. adding sale proceeds of assets of Rs. 2,76,899/- and disallowing loss on sale of assets of Rs. 44,690/- and not allowing depreciation is erroneous. The impugned order passed by the AO in computing the taxable income of the assessee is also not based on any discussion or reasoning and therefore the additions/disallowances made therein need to be deleted. 2. I have heard the Ld. Representatives of both parties and perused material on record. 3. The facts of the case are that the assessee is a company registered under section 26 of the Indian Companies Act, 1913 which co....
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....who are engaged in trade, commerce and industry. The assessee charge nominal fees as per the guidelines provided by Ministry of Commerce, Government of India. The nominal fees are incidental to the main objects of the assessee. The issue is covered by the decision of Hon'ble Delhi High Court in the case of PhD Chamber of Commerce and Industry vs DIT(Exemption) reported in 212 Taxman 192. The motive of the assessee is not to earn any profit since there are no profit that can be distributed. The surplus or profit remains with the assessee and is applied solely towards promotion of its objects and no portion is transferred to members. In earlier AYs 2009-10, 2010-11, 2011-12 and 2012-13, the AO had denied exemption under section 11(1) of the Act but the same had been allowed by the Ld.CIT(A). With regard to purchase of vehicles and other articles, it was stated that these were necessary for officials of chamber and are used for meetings with delegations and for attending/visiting conferences, seminars and keeping with the times and advancement of Technology, these tools are necessary and they are not luxury items. The order of the AO is based on surmises and conjectures and not on act....
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....ether such activities (which amount to a business) were incidental to the attainment of the objectives of trust or institution and whether separate books of account were maintained in respect of such activities. There can be no doubt that the activities of the nature described above, in the case of an assessee such as the present one, which is a trade association-Chamber of Commerce and Industry, established to protect the interests of trade and industry in Punjab, Haryana and Delhi - were activities which are incidental to the attainment of the objects of the chamber. We do not think that the Tribunal is justified in taking the view that the assessee, which is a chamber of commerce and industry, is carrying on business activities which require compliance with the conditions of section 11 (4A). In CIT v. Andhra Chamber of Commerce [1965} 55 ITR 722, it was held by the Supreme Court that advancement or promotion of trade, commerce and industry leading to economic prosperity ensured for the benefit of the entire community; that prosperity would be shared also by those who engaged in trade, commerce and industry, but on that account the purpose was not rendered any the less an object ....
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....siness was unnecessary. We accordingly answer the substantial question of law framed by us in the negative, in favour of the assessee and against the . Revenue ... " 4.2.4 The Hon'ble ITAT Delhi Bench "B", in the case of Disha India Micro Credit Vs. CIT in ITA No. 1374/Delj2010 (dated 28.01.2010), inter alia, examined the issue whether profit, even if to be ploughed back, would be liable to income-tax or not. The Hon'ble Tribunal, in para 22 of the order observed as under: "22. It is well settled that when a profit is used towards the achievement of the charitable objects of the trust, it would be considered to be incidental to the achievements of the objects of the trust notwithstanding the profit and gain involved therein. In this respect, a reference may be made to the decision of Hon'ble Supreme Court in the case of Asstt. CIT vs, Thanthi Trust (2001) 247 ITR 785(SC). Thus, mere because there was a surplus from the activity of micro financing, that by itself cannot be a ground to say that the assessee does not exist for charitable purpose particularly when under the Memorandum of Association and Articles of Association, it has been clearly provided that the profit....
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..... Director of Income-Tax (Exemptions) (supra), decision of the Hon'ble Delhi IT AT in the case of Disha India Micro Credit Vs. CIT (supra) and following the appellate orders of my Id. predecessors CIT (A)-XXI/40 for assessment years 2009-10, 2010-11, 2011-12 and 2012-13 on the principle of consistency, the Assessing Officer is directed to allow the exemption under section 11. These grounds of appeal are, therefore, allowed." 6. Ld.D.R. relied upon the order of the AO and submitted that the departmental SLP is pending before the Honorable Supreme Court in the case of PhD Chamber of Commerce and Industry (supra). On the other hand Ld.Counsel for the assessee reiterated the submissions made before the authorities below and submitted that in the assessment year 2009-10 the department appealed against order of Ld.CIT(A) before the Tribunal, but the departmental appeal has been dismissed because of the low tax effect vide order dated 30th December,2015, a copy of which is placed on record. 7. I have considered rival submissions and do not find any merit in the departmental appeal. It is an admitted fact that the assessee is registered under section 12A of the act. The main objects....