2025 (12) TMI 1646

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....order dated 14/08/2025 passed by the Hon'ble CIT(Appeal) ADDL/ICIT (A), Agra; bearing no. ITBA/APL/S/250/202526/107963 9014(1) under section 250 of the Income Tax Act, 1961 is unreasonable. arbitrary and against the provision of Income Tax Act, 1961 and therefore liable to be quashed. 2. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in confirming lending of auditorium and conference hall as commercial activity with motive of earning profit and considering the rent received from the halls as Business Income. 3. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in confirming interest income of Rs. 86463/-and interest transferred to funds of R....

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....s to foster a spirit of union, friendship and self-help among Kannadigas and to pursue cultural, social, educational and economic advancement of Kannadigas in Mumbai and it owns a hall which is given on rent for the purposes of hosting performances and events in the field of dance, music, folk art and education activities. It was submitted that renting out of hall cannot be treated as commercial activity as the whole purpose of renting out the hall is not to earn profit but to generate funds which can be used to meet the costs towards attaining its objects. It was submitted that no adverse finding has been recorded by the AO as far as the charitable activities carried out by the assessee is concerned and, therefore, the exemption so claimed....

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....ontentions and perused the material available on record. As per audited financial statements, the assessee has reported gross receipts of Rs. 40,55,404/- and expenses of Rs. 52,05,831/- and there is thus no surplus or profit rather there is loss of Rs. 11,50,427 which has been reported for the year under consideration. The AO has brought to tax whole of the gross receipts to tax and at the same time, has not allowed expenses amounting to Rs 32,12,006/- while determining the total income in the hands of the assessee. It is a settled legal proposition that it is only the net income which can be brought to tax. In the instant case, admittedly, the expenses amounting to Rs 32,12,006/- have been incurred on educational and charitable activities ....