The All India Society for Electronices & Computer Technology, v. The A C I T 1 (1),

CO 73/IND/2008 | 2005-2006
Pronouncement Date: 12-04-2010 | Result: Dismissed

Appeal Details

RSA Number 7322723 RSA 2008
Assessee PAN ROUND4500C
Bench Indore
Appeal Number CO 73/IND/2008
Duration Of Justice 1 year(s) 6 month(s) 6 day(s)
Appellant The All India Society for Electronices & Computer Technology,
Respondent The A C I T 1 (1),
Appeal Type Cross Objection
Pronouncement Date 12-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 12-04-2010
Date Of Final Hearing 07-04-2010
Next Hearing Date 07-04-2010
Assessment Year 2005-2006
Appeal Filed On 06-10-2008
Judgment Text
PAGE 1 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AAAA1914G I.T.A.NO. 397/IND/2008 A.Y. : 2005-06 ACIT ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECHNOLOGY 1(1) VS SCOPE CAMPUS BHOPAL. NEAR MISROD BHOPAL. APPELLANT RESPONDENT C.O.NO.73/IND/2008 (ARISING OUT OF I.T.A.NO. 397/IND/2008) A.Y. : 2005-06 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECHNOLOGY ACIT SCOPE CAMPUS VS 1(1) NEAR MISROD BHOPAL. BHOPAL. CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SMT.APARNA KARAN SR.DR ASSESSEE BY : SHRI S.S.DESHPANDE C.A. DATE OF HEARING : 07.04.2010 PAGE 2 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY O R D E R PER BENCH THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARISE OUT OF ORDER OF THE LD. CIT(A) BHOP AL DATED 11.06.2008 FOR THE ASSESSMENT YEAR 2005-06. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. AT THE VERY OUT-SET THE CROSS OBJECTION FILED BY T HE ASSESSEE WAS NOT PRESSED. HENCE THE SAME IS DISMISSED AS NOT PR ESSED. 4. NOW WE SHALL TAKE THE REVENUES APPEAL IN I.T.A.NO . 397/IND/2008. 5. GROUND NO.1 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4 25 200/- BEING THE AMOUNT CLAIMED AS EXEMPT HOLDING THAT THE PROVISIONS OF SECTION 10(23C)(IIIAD) OF THE INCOME- TAX ACT 1961 ARE APPLICABLE IN THE ASSESSEES CASE. 6. THE FACTS IN BRIEF ARE THAT THE ASSESSEES SOCIET Y WAS RUNNING COLLEGE AND ALSO COMPUTER TRAINING INSTITUTE. THE A SSESSEE CLAIMED EXEMPTION U/S 10(23C)(IIIAD) IN RESPECT OF COLLEGE INCOME. THE A.O. PAGE 3 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY HOWEVER HELD THAT THE ASSESSEE WAS RUNNING TRAININ G CENTRES FOR PROFIT PURPOSES AND THEREFORE DID NOT EXIST SOLELY FOR E DUCATIONAL PURPOSES AND ACCORDINGLY HELD THAT THE ASSESSEE WAS NOT ENTITLE D FOR EXEMPTION U/S 10(23C)(IIIAD). IN DOING SO THE A.O. REJECTED THE CLAIM OF THE ASSESSEE THAT IT WAS MAINTAINING SEPARATE BOOKS OF ACCOUNT F OR BOTH TYPES OF ACTIVITIES AND HAD NOT CLAIMED EXEMPTION IN RESPECT OF INCOME OF THE ACTIVITIES OF RUNNING OF TRAINING CENTRE. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A ) WHO ACCEPTED THE CLAIMS OF THE ASSESSEE FOR THE REASON THAT SEPARATE BOOKS OF ACCOUNT HAD BEEN PREPARED FOR BOTH THE TYPES OF ACTIVITIES AND RECEIPTS OF THE ASSESSEE FOR FORMAL EDUCATIONAL ACTIVITIES WERE LESS THAN RS . 1 CRORE HENCE THE ASSESSEE WAS ENTITLED FOR EXEMPTION U/S 10(23C)(III AD) PARTICULARLY WHEN THE A.O. HAD NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT IN THE EDUCATIONAL ACTIVITIES THE ASSESSEE WAS EARNING HU GE PROFIT OR WAS CARRYING OUT SAID ACTIVITIES WITH THE PROFIT MOTIVE . AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 7. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE ON THE OT HER HAND PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 8. ON DUE CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AN D THE SAME HAVE ALSO PAGE 4 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY REMAINED UNCONTROVERTED BEFORE US. ACCORDINGLY THI S GROUND OF THE REVENUE IS DISMISSED. 9. GROUND NO.2 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 33 28 716/- MADE BY THE ASSESSING OFFICER U/S 40A(2)(B) BEING T HE PAYMENTS MADE TO CLOSELY RELATED COMPANY. 10. THE FACTS IN BRIEF ARE THAT THE ASSESSEE SOCIET Y IN RESPECT OF COMPUTER TRAINING ACTIVITIES PAID SUBSTANTIAL SUM T O PERSONS/ENTITIES COVERED U/S 40A(2)(V). THE A.O. EXAMINED THE AGREEM ENT BETWEEN THE ASSESSEE AND SUCH ENTITIES AND FOUND THAT OUT OF TO TAL FEES COLLECTION 10% THEREOF HAD TO BE PAID UNDER THESE ENTITIES FOR PRO VIDING COURSE MATERIAL MAGAZINES TO THE STUDENTS AND ALSO FOR DATA PROCESS ING AND FOR COORDINATION BETWEEN VARIOUS BRANCHES. THE A.O. RE QUIRED THE ASSESSEE TO SUBMIT THE COMPARABLE DATA TO WHICH ASSESSEE REP LIED THAT THIS SERVICE WAS NOT DIRECTLY COMPARABLE. THE A.O. ACCORDINGLY HELD THAT 50% SUM SO PAID WAS TO BE CONSIDERED AS UNREASONABLE OR IN EXCESS OF FAIR MARKET VALUE OF SERVICES SO PROVIDED AND ADDED A SUM OF RS . 33 28 716/- TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THIS TH E ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHEREIN I T WAS CONTENDED THAT THE ASSESSEE WAS CONDUCTING CLASSES THROUGH OUT THE COUNTRY AND HAVING PAGE 5 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY AROUND 4500 CENTRES WITH ONE LAKH STUDENTS ENROLLED WITH IT. HENCE SOME OF THE NON-CORE ACTIVITIES HAD BEEN OUTSOURCED FOR WHICH CERTAIN PERCENTAGE OF THE TOTAL REVENUE HAD BEEN PASSED ON. IT WAS ARGUED THAT THERE WAS NO ELEMENT OF EXCESSIVENESS WAS INVOLVED. IT WAS FURTHER ARGUED THAT THE SAID COMPANIES WERE ALSO REGULAR IN COME TAX PAYEES AND HENCE THERE WAS NO CHANCE OF TAX REDUCTION EXERCIS E ADOPTED BY THE ASSESSEE IN THIS MANNER. THE ASSESSEE ALSO PLEADED THAT THE A.O. WAS DUTY BOUND TO BRING COMPARABLE CASES ON RECORD WHICH TH E A.O. FAILED TO DO HENCE FOR THIS REASON ALSO THE ACTION OF THE A.O. WAS NOT CORRECT IN LAW. THE LD. CIT(A) HELD THAT NEITHER COMPARABLE CASES H AD BEEN BROUGHT ON RECORD NOR PLAUSIBLE REASONS WERE GIVEN BY THE ASSE SSING OFFICER FOR DISBELIEVING THE CLAIM OF THE ASSESSEE. HENCE THE A.OS ACTION WAS THE CASE OF PRESUMPTION ONLY AND THEREFORE HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THIS T HE REVENUE IS IN APPEAL BEFORE US. 11. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE ON THE OT HER HAND PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 12. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. PAGE 6 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY 13. IT IS NOTED THAT AS FAR AS THE FACT OF RENDERING OF SERVICES IS CONCERNED THE SAME IS NOT IN DISPUTE. FURTHER HAV ING REGARD TO THE SCALE OF OPERATIONS CARRIED OUT BY THE ASSESSEE AND THE N ATURE OF SERVICES RENDERED BY SUCH PERSONS TO THE ASSESSEE CONSIDERA TION PAID TO SUCH PARTIES DOES NOT APPEAR TO BE EXCESSIVE OR UNREASO NABLE. WE ARE FURTHER OF THE VIEW THAT IN THE ABSENCE OF COMPARABLE CASES THE A.OS ACTION IS A CASE OF PRESUMPTION ONLY. THUS WE DISMISS THIS GRO UND OF THE REVENUE ALSO. 14. GROUND NO.3 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 30 000/- TOWARDS RENT PAID TO SHRI SANTOSH CHOUBEY DISALLOWE D BY THE ASSESSING OFFICER BEING HOUSE USED BY SECRETARY OF SOCIETY AND NOT UTILIZED FOR GUEST HOUSE. 15. THE FACTS IN BRIEF ARE THAT THE ASSESSEE CLAIMED A RENT OF RS. 30 000/- PAID TO SMT. SHARDA CHOUBE FOR A PORTION O F HIS HOUSE BEING USED AS GUEST HOUSE. THE A.O. DISALLOWED THE SAME F OR THE REASONS THAT IT WAS NOT USED AS A GUEST HOUSEL. ON APPEAL BY THE AS SESSEE THE LD. CIT(A) HELD THAT THE A.O. DISALLOWED THE SAME ON THE PRESU MPTION THAT THIS HOUSE WAS USED SOLELY FOR THE RESIDENTIAL PURPOSES BY THE SECRETARY OF THE SOCIETY AS NO MATERIAL HAD BEEN BROUGHT ON RECORD T O SHOW SUPPORT THIS PAGE 7 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY VIEW HENCE HE DELETED THE SAME. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 16. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE ON THE OT HER HAND PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 17. ON DUE CONSIDERATION OF FACTS AND CIRCUMSTANCES WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDING LY WE CONFIRM THE SAME. 18. GROUND NO. 4 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 70 000/- ON ACCOUNT OF LOSS OF CASH BY THEFT WHICH COULD NOT BE EXPLAINED BY THE ASSESSEE WITH THE HELP OF DOCUMENTARY EVIDEN CES. 19. THE FACTS IN BRIEF ARE THAT THE ASSESSEE CLAIM ED LOSS OF CASH OF RS. 70 000/- WHICH WAS DISALLOWED BY THE ASSESSING OFFICER WITHOUT GIVING ANY REASONS. THE LD. CIT(A) ALLOWED THIS CLA IM OF THE ASSESSEE ON THE BASIS OF FIR LODGED BY THE ASSESSEE WHEREIN TH E FACTUAL CIRCUMSTANCES IN WHICH SUCH LOSS OCCURRED TO THE AS SESSEE WERE MENTIONED. AGGRIEVED BY THIS THE REVENUE IS IN APP EAL BEFORE US. PAGE 8 OF 8 - I.T.A.NO. 397/IND/07 AND C.O.NO. 73/ IND/2008 ALL INDIA SOCIETY FOR ELECTRONICS AND COMPUTER TECH NOLOGY 20. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE ON THE OT HER HAND PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 21. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 22. IT IS NOTED THAT THIS LOSS HAS BEEN SUFFERED BY THE ASSESSEE DUE TO A ROBBERY EVEN TOOK PLACE IN THE OFFICE OF THE ASSE SSEE AND FOR THAT EVENT FIR HAS ALSO BEEN LODGED AND HENCE THE GENUINENESS OF THE CLAIM OF THE ASSESSEE CANNOT BE DOUBTED. ACCORDINGLY WE HOLD TH AT THE SAME IS ALLOWABLE AS BUSINESS LOSS. THUS THIS GROUND OF TH E REVENUE IS ALSO DISMISSED. 23. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. 24. TO SUM UP BOTH REVENUES APPEAL AS WELL AS CROSS O BJECTION OF THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH APRIL 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH APRIL 2010. CPU 794