TaxTMI 
TaxTMI 
2019 (11) TMI 273
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....9/Del/2017 wherein identical issues are involved which are relating to assessment years 2010-11 & 2012-13. 2. The Grounds raised in Assessee's ITA No. 3081/Del/2017 (AY 2010-11) read as under:- 1. That in view of the facts and circumstances of the case the order passed by the CIT(A) and the assessment order is illegal, bad in law and without jurisdiction. 2. That the order of the CIT (A) is being assailed of being perverse, as the same is passed without considering the submissions of the Appellant, taking a holistic view of the matter and the ratio's of various case laws which have been relied by the Appellant. 3. That the CIT(A) has erred in law and in facts confirming the order of the AO wherein he has denied the exemption U/s 11 of the Act to the Appellant. 4. That the CIT (A) has erred in law in holding that the activities conducted by the Appellant are not in accordance with the objects of the Appellant society. 5. That the CIT (A) has erred in law and in facts in confirming the order of the AO wherein the AO has not allowed the accumulation of income of Rs. 2,25,84,589/- U/s 11(3) of the Act to the Appellant. 6. The....
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....e case and in law, Ld. CIT(A) has erred in deleting addition as Gratuity expenses claimed in Income and Expenditure A/c as no documentary evidence for actual payment of the expenses was furnished during the assessment proceedings. 2.3 The grounds raised in Revenue's Cross ITA No. 3649/Del/2017 (AY 2012- 13) read as under:- 1. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing expenditure as provisions for doubtful debts and provision for arrear of salary. 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing utilization of income u/s. 11(2) expenditure as this account has already been allowed on deemed basis earlier years. 3. On the facts and in the circumstances of the case and in law, the decision of the Ld. CIT(A) is not acceptable as Interest Income and Other Income should be credited in Income and Expenditure A/c as the Assessing Officer has computed income of the assessee on the basis of Income & Expenditure account submitted during the assessment proceedings. 4. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in del....
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....plishing the main object, to enlist and train national missionaries for the service of motherland. 2.3. That on the facts and circumstances of the case and in law, the Hon'ble ClT(A) has erred in stating, "nothing has been brought on record to show how the activity of running the newspaper business is incidental to the main objective of the Trust." 2.4. That the Hon'ble CIT(A) has erred 00 facts and in law by invoking Section 13(8) of the Act and thereby, sustaining an addition amounting to Rs. 7,62,81,269 on account of surplus generated from publication of newspapers. 3. That on the facts and circumstances of the case the Hon'ble CIT(A) has erred in not adjudicating with regard to surplus amounting to Rs. 2,73,83,417; interest and other income of Rs. 3,36,37,911 and agricultural expenses of Rs. 20,22,411. 4. That having regard to the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred in affirming the impugned assessment order wherein it has been wrongly held that, "running of newspaper is not incidental to the objects of the appellant and that it is in the nature of business since the assessee itself has ....
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.... that running of newspaper activity constitutes business carried on by or behalf of the appellant. In such a case Section 11 (4A) will apply only if the activities are incidental and nothing has been brought on record to show how the activity of running the newspaper business is incidental to the main objectives of the trust. 2.2 That the Hon'ble CIT(A) has erred on facts and in law in denying exemption in terms of Section 11 of the Act basis irrelevant consideration that the activities carried on by the appellant did not aid and assist in accomplishing the main object, to enlist and train national missionaries for the service of motherland. 2.3 That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in stating, nothing has been brought on record to show how the activity of running the newspaper business is incidental to the main objective of the Trust. 2.4 That on the facts and circumstances of the case and in law, the Hon'ble ClT(A) in complete disregard of the fact that the printing press was instrumental in achieving the objectives of the Trust and keeping alive the motto of Pandit Gopal Banhu Das, has erro....
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....ding that the assessee itself added the same in computation of income, without appreciating that the AO made the computation of taxable income afresh starting from the surplus shown in income and expenditure income. It is also seen that the provision is in fact provision for leave encashment not allowable under the Income Tax Act. 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 1,27,33,613/- on the ground that the assessee had itself disallowed the same in computation of income, ignoring the fact that unless the same is claimed as expenditure the assessee would not have disallowed it. 4. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2.7 The grounds raised in Revenue's Cross ITA No. 4049/Del/2018 (AY 2014- 15) read as under:- 1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting Rs. 3,47,18,749/- even though the assessee has shown this amount of Rs. 3,47,18,749/- towards interest income from term deposit of Orissa Branch which has been credited directly in the earmarked and r....
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....has submitted its audit report under section 12A(b) of the I.T. Act, 1961 for consolidated account and stated in para that "Profit or Loss attributable to the purchases and sales made by the society is also merged in the surplus arising in the consolidated accounts dealt with by this report and a separate income and expenditure account in respect of such activities is not attached hereto as required under sub section (4A) of section 11 of section of the I.T. Act, 1961 in view of the Society having been notified u/s 10(23)(c)(iv) for the assessment years 1990-91 to 1992-93 vide notification dated 27.01.1995 and application for similar notification stated to have been made and approval awaited for subsequent years. 3.2 Assessee-society is engaged in printing and publication of newspaper and a show cause notice dated 25.02.2013 was issued fixing the case on 01.03.2013. In response to the show cause notice counsel of the assessee attended the proceedings on 15.03.2013. The assessee has taken plea that the earlier assessment years were made at NIL. Further the question of nature of activities of the society being commercial in nature was raised in AY 1973-74. The Ld. CIT(A) and Tr....
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....dment in section 2(15) of the Act. 3.4 Evidently the activities of the assessee of running newspaper printing has characteristics and the assessee is generating income from publishing advertisements in its newspapers. In view of the various judgments, the AO held that the assessee falls under the last limb of section 2(15), and hit by this section. Accordingly, provisions of section 13(8) of the Act is applicable and surplus generated of Rs. 6,00,34,647/- from newspaper business is taxed at maximum marginal rate and levy of penalty u/s. 271(1)(c) of the Act also alongwith various other additions mentioned in para no. 13 to 19 of the assessment order dated 15.3.2013 passed u/s.143(3) of the Act. Aggrieved with the assessment order dated 15.3.2013, assessee filed the appeal before the Ld. CIT(A), who vide his impugned order dated 01.3.2017 has partly allowed the appeal of the assessee against which the Assessee as well as Revenue are in cross appeals before the Tribunal. 4. At the time of hearing, Ld. Counsel for the assessee filed his Synopsis/Written Submissions in all the appeals filed by the Assessee as well as by the Department and the same are reproduced hereunder:- ....
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.... by Rs. 2,18,37,525/- for the relevant previous year ended on March 31, 2010. (refer computation of income for the Assessment Year 2010-11 placed as Annexure 10) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.4: General in Nature A detailed chart summarizing all the Grounds of Appeal for AY 2010-11 is also enclosed and marked as Annexure 14-16. Assessment Year 2012-13 ITA No. : 3082/ Del/2017 & 3649/ Del/ 2017 Appellant Appeal: ITA No. 30821 Dell 2017 Ground No.1 and 2: General in Nature Ground No.3 and 4: Addition of Rs. 9,66,08,554 /- on account of surplus generated from the activity of publishing of Newspaper and Rs. 2,63,41,112/- on account of surplus generated from activities of the Appellant centered at Delhi. The said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1- 9) passed in the Appellant own's case, ITA No. 4984/ Del! 2015 for the Assessment Year ('AY') 2011-12. Ground No.5: Addition of Rs. 47,11,596/- on account of income deemed under th....
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....Annexure 17 -20. Assessment Year : 2013-14 ITA No. : 3658/ Del/ 2018 & 4207/ Del/ 2018 (Cross Appeals) Appellant's Appeal: ITA No. 3658/Del/2018 Ground No.1, 2, 4 and 5: Addition of Rs. 7,62,81,269/- on account of surplus generated from the activity of publishing of Newspaper. The said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1- 9) passed in the Appellant own's case, ITA No. 4984/ Del! 2015 for the Assessment Year ('AY') 2011-12. Ground No.3: Addition of Rs. 2,73,83,417/- on account of surplus generated from activities centered at Delhi & Rs. 3,36,37,911/- on account of Interest and other income credited in reserve fund for activities centered at Delhi and disallowance of arm expenses of Rs. 20,22,411/-. In regard to the addition of Rs. 2,73,83,417/- on account of surplus generated from activities centered at Delhi, the Appellant submits that the said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17, 2019 (copy enclosed and marked as Annexure 1 - 9) passed in ....
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.... 2,45,86,358/- on account of surplus generated from the activity of publishing of Newspaper. The said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1 - 9) passed in the Appellant own's case, ITA No. 4984/ Del/ 2015 for the Assessment Year (AY') 2011-12. Ground No.7: Addition of Rs. 2,16,04,434/- on account of surplus generated from activities centered at Delhi and Rs. 2,50,79,967/- on account of Interest and other income credited in reserve fund for activities centered at Delhi. In regard to the addition of Rs. 2,16,04,434/- on account of surplus generated from activities centered at Delhi, the Appellant submits that the said issue is covered in favour of the Appellant by the Hon'ble Tribunal Order dated September 17,2019 (copy enclosed and marked as Annexure 1 - 9) passed in the Appellant own's case, ITA No. 4984/ Del/ 2015 for the Assessment Year (lAY') 2011-12. Further, as regards the addition of Rs. 2,50,79,967/- on account of Interest and other income credited in reserve fund for activities centered at Delhi, the Appellant submits that it....
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....the directions to verify the same whether the same amounts to double addition or not. 5. On the contrary, Ld. DR relied upon the orders of the AO and stated that AO has passed a well reasoned order on the basis of amendment in section 2(15) of the I.T. Act, 1961 which is effective from 01.04.2009 and is applicable from Assessment year 2009-10. On the issue of exemption u/s. 11 apart from relying on the decision of the AO and Ld. CIT(A), she placed reliance on the following cases. But she could not controvert the contention of the Ld. Counsel for the assessee that the issue of activity of publishing of news paper is squarely covered by the decision of the ITAT, Delhi 'A' Bench vide order dated 17.09.2019 passed in assessee's own case for the assessment year 2011-12 in ITA No. 4984/Del/2015 - ACIT(E) vs. Servants of People Society wherein the said activity has been declared as charitable. As regards issues of double addition are concerned, she has no objection if the said issues be set aside to the AO for verification whether the said amount tantamount to double addition or not, as requested by the Ld. Counsel for the assessee, as aforesaid. - Information Systems Audit & ....
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.... carrying the mandate of the Will of Late Shri Gopa Bandhu Dass in running the printing press and the newspaper and the income so generated is used for charitable purposes and apparently there is no profit motive in the activities of the assessee and as such it cannot be said that the assessee is involved in any trade, commerce or business and as such the mischief of the Proviso of section 2(15) is not apparently attracted. We further note that the Hon'ble Delhi High Court in the case of India Trade Promotion Organization vs. DGIT9E) 53 Taxmann.com 404 (Delhi) 2015 order dated 22.1.2015 has upheld the constitution validity of the proviso of section 2(15) which was under challenge being discriminatory in view of the Article 14 (Equality before law) of the Constitution of India but the Hon'ble High Court has read down the strict and literal interpretation of the Proviso of setion 2(15) and has held that mere receipt of fee or charge cannot be said that the assessee is involved in any trade, commerce or business and has accordingly allowed the relief to the aforesaid case. After considering all the facts and circumstances of the case, we are of the considered view that the as....
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.... Bad and Doubtful Debts and Rs. 5,00,000/- on account of provision for Arrears of Salary. After perusing the computation of income for the AY 2010-11), we note that Assessee suo-moto has already increased its assessable income by reducing its expenditure by an amount of Rs. 4,50,000/- and Rs. 5,00,000/- for the relevant previous year ended on March 31, 2010. Further, the said disallowance made by the AO tantamount to double disallowance, which in our opinion, needs to be verified at the level of the AO whether the same tantamounts to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. 7.1 As regards Ground No.2 relating to Addition of Rs. 64,64,637/- on account of Accumulation of income under section 11(2) of the Act. It is noted that the assessee suo-moto has already increased its assessable income by Rs. 64,64,637/- for the relevant previous year ended on March 31, 2010. Further, the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then d....
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....essee and the case laws relied therein as well as the relevant provisions of the Act on the issue in dispute. We find considerable cogency in the contention of the Ld. Counsel for the assessee that the assesse is a charitable institution and mere receipt of fees and income etc. cannot be said that the assessee is involved in any trade, commerce or business. The assessee is carrying the mandate of the Will of Late Shri Gopa Bandhu Dass in running the printing press and the newspaper and the income so generated is used for charitable purposes and apparently there is no profit motive in the activities of the assessee and as such it cannot be said that the assessee is involved in any trade, commerce or business and as such the mischief of the Proviso of section 2(15) is not apparently attracted. We further note that the Hon'ble Delhi High Court in the case of India Trade Promotion Organization vs. DGIT9E) 53 Taxmann.com 404 (Delhi) 2015 order dated 22.1.2015 has upheld the constitution validity of the proviso of section 2(15) which was under challenge being discriminatory in view of the Article 14 (Equality before law) of the Constitution of India but the Hon'ble High Court has read do....
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....s of Rs. 20,22,411/- while suo-moto disallowing the agriculture income in its computation of income. Further, the addition/ disallowance made by the AO of the above-mentioned amount(s) of Rs. 3,36,37,911/- and Rs. 20,22,411/- tantamount to double addition/ disallowance, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Assessee's appeal is partly allowed for statistical purposes. Assessee's Appeal No. 3659/ Del/2018 (AY 2014-15) 8.3 Following the consistent view as taken in ITA No. 3658/Del/2018 (AY 2013-14), as aforesaid, the ITA no. 3659/Del/2018 (AY 2014-15) is also partly allowed for statistical purposes, being the issues involved therein are exactly similar and common to the issues in ITA No. 3658/Del/2018 (AY 2013-14). 8.4 In the result, Assessee's appeal partly allowed for statistical purposes. Departmental Appeal: ITA No. 4207/ Del/2018 (AY 2013-14) 9. As regards Ground No.1 relating to disallowance of Rs. 2,04,38,830/- on account of Provision....