TaxTMI 
TaxTMI 
2022 (5) TMI 540
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....roviso to Section 2(15) r.w.s. 13(8) of the Act? 2. On the facts and circumstances of the case, the ld. CIT(Appeals) ought to have upheld the order of the Assessing Officer in denying the claim of exemptions under section 11 of the Act? 3. Whether, on the facts and in the circumstances of the case the ld CIT(Appeals) is correct in allowing the claim of subsidy of Rs.50,27,975/- as corpus donations u/s 11(1)(d) of the Act without appreciating the findings of the AO with regard to applicability of Section 2(15) of the Act? 4. Whether on the facts and circumstances of the case and in law, ld. CIT(Appeals) is correct in deleting the additions of 67,03,176/- claimed as capital receipts, without appreciating the findings of the Assessing Officer? 5.Wheether, on the facts and in the circumstances of the case the ld. CIT(Appeals) is correct in allowing the claim of capital expenditure of Rs.2,19,98,390/- Rs.12,50,988 without appreciating the findings of the AO with regard to applicability of Section 2(15) of the Act? 6.The Revenue craves to add, alter, amend, modify, substitute, delete and/or rescind all or any Grounds of Appeal on or before the....
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....) of the Act. Accordingly, Assessing Officer issued show cause notice as to why the assessee should not be treated as "Associate of Person" (AOP) and income be computed under normal provisions of the Income Tax Act, 1961. The assessee filed its reply vide letter dated 02.12.2016. The contents of reply are extracted in para-3 of the assessment order. In reply, assessee contended that their case is identical on certain points as in the case of Delhi District Cricket Association Vs. DIT(E) New Delhi ITA No.3095/Del/2012 and stated that the same may be considered while deciding the issue of section 2(15). The reply of assessee was not accepted by Assessing Officer. The Assessing Officer held that as per proviso has been inserted to Section 2(15) with effect from 01.04.2009 provides that the provisions of first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh Rupees or less in the previous year. The assessee has shown gross income of Rs.2.30 crores which consists of bank interest, donations and income from other sources. The income from other sources is Rs.1.57 crores. The main source of income under the head "inc....
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....rship fees. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer held that the ae has already been treated as AOP, therefore, the receipt of Rs.54,68,620 + Rs.12,34,556/- i.e., Rs.67,03,176/- was also included in the total income of assessee. 5. The Assessing Officer again noted that in computation of income the assessee has claimed 'application of income' and claimed capital expenditure of Rs.2.19 crores. Since the assessee was treated as AOP and case of assessee is covered by first proviso to Section 2(15) of the Act. Accordingly, the assessee is required to be assessed under the normal provision of the Income Tax Act. Accordingly, the capital expenditure of Rs.2.19 crores was also not allowed. Similarly, the ground renovation of Rs.12.50 lakh was also not allowed and added to the total income of assessee by taking view that assessee is also treated as AOP. 6. Aggrieved by the treatment of AOP, the AOP and disallowance of exemption under section 11 of various receipt the assessee filed appeal before Ld.CIT(A). Before Ld. CIT(A) the assessee filed detailed written submission on 11.04.2018, 27.07.2018 and 10.02.2020. In its submission, assessee i....
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....P instead of trust and not allowing the various exemptions under section 11 & 12. The assessee in its submission dated 10.02.2020 has stated that Hon'ble jurisdictional High Court in the case of Director of Income Tax (Exemption) vs. (1) Gujarat Cricket Association (2) Baroda Cricket Association (3) Saurashtra Cricket Association in Tax Appeal No.123 of 2014 dated 27.09.2019 decided the issue in favour of those assessee's and dismissed the appeal of Revenue. 7. The assessee also referred certain observation of Ahmedabad Tribunal in those cases. The Ld. CIT(A) after considering the submission of assessee allowed the appeal of assessee by taking view that the sole ground of appeal contested by the assessee is against addition of Rs. 3.49 Crore made by assessing officer by holding that the assessee's case in covered by the proviso of section 2(15) of the Act and hence not eligible for exemption under section 11 of the Act. It was also held that Hon'ble jurisdictional High Court confirmed the finding of Ahmedabad Tribunal in three appeals, in Tax Appeal No.123/2014 dated 27.09.2019. Accordingly, directed the Assessing Officer were directed to delete the addition. Aggrieved b....
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.... registration under section 12A was granted way back in 1987. It is also settled legal position that the registration of institution or trust under section 12 is the foundation for seeking exemption of section11 though not conclusive. In other words the registration under section 12A is sine qua non for eligibility of benefit of section 11. It is also settled position under law that the eligibility of benefit is to be determined on year to year basis depending on the actual activities undertaken by the assessee. Thus, the assessing officer is entitled to determine the eligibility of exemption under section 11 on the basis of activities carried out by the assessee during the relevant financial year. The bone of contention on the eligibility between the assessee and the assessing officer are certain receipt received by the assessee during the relevant period under consideration viz; being the receipt income under the head "income from other sources" consisting annual maintenance fees from members of Rs.1.28 crores, ground rent (cricket) of Rs.5.97 crores, guest fees of Rs.1.27 lakhs, health club & swimming pool income of Rs.1.28 lakhs, District Cricket Tournament income of Rs.3.29 la....
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....y for profit. It was pointed out that it was immaterial how the money for achieving or implementing such purpose was found. Whether, that money was obtained by the running of an activity for profit or not, did not make the charity not charitable (emphasis added by us). 14. Further, the Hon'ble High Court in DIT Vs Sabarmati Ashram Gaushala Trust (223 Taxman 243 Gujarat) while considering the scope of the proviso to section 2(15) held that the said proviso provides for exclusion from the main object of the definition of the term 'Charitable purposes' and applies only to cases of advancement of any other object of general public utility. If the conditions provided under the proviso are satisfied, any entity, even if involved in advancement of any other object of general public utility by virtue to proviso, would be excluded from the definition of ' charitable trust'. However, for the application of the proviso, what is necessary is that the entity should be involved in carrying on activities in the nature of trade, commerce or business, or any activity of rendering services in relation to any trade, commerce or business, for a cess or fee or any other considera....