2019 (2) TMI 1842

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....ot giving the credit of the application of funds for charitable purposes. Thus, the impugned determination of income is illegal, arbitrary and not sustainable in the eye of law and the consequential demand raised therein is liable to be deleted. 3. I have considered the arguments of both the sides and carefully perused the relevant materials placed on the record of the Tribunal. Ld AR of the assessee submitted that the Assessing Officer as well as the CIT(A) are not justified in not allowing the income generating expenditures while determining the income of the appellant society. Ld A.R. vehemently pointed out that the authorities below should not have treated the entire receipts as income of the assessee as the revenue expenditure incur....

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....in the return of income that it has not been registered u/s.12AA of the Act. Ld D.R. lastly submitted that the claim of the assessee pertaining to incurring of expenditure and it allowability out of total gross receipts is not based on sound legal footing, therefore, same was rightly rejected by the authorities below. 5. In the rejoinder to above, ld A.R. submitted that the Assessing Officer should have allowed expenditures, which were required to be incurred to earn the income/receipts because once the assessee does not have registration u/s.12A of the Act, exemption u/s.11 is also not available and the taxable income of the assessee is required to be determined on the principle of commercial accounting which provides that the expenditu....

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.... such charitable activities and whatever amount has been spent on those programmes/projects , they were spent in the usual course of carrying on its acclaimed objects and hence, those expenses are revenue expenses which should have been allowed to the assessee out of total amount of gross receipts during the relevant financial period. 7. From the orders of the authorities below i.e. intimation of the Assessing Officer u/s.143(1) of the Act and the impugned order passed by the CIT(A), I observe that in para 3 of the first appellate order, the CIT(A) has noted that during the relevant previous year, the assessee has claimed Rs. 22,29,460/- on revenue account and in the same para, subsequently, the CIT(A) upheld the action of the Assessing ....