The Totgar Seva Samiti., Sirsi v. The Deputy Commissioner of Income Tax, Circle-1(1), Hubli., Hubli

ITA 158/PAN/2016 | 2010-2011
Pronouncement Date: 05-10-2016 | Result: Allowed

Appeal Details

RSA Number 15824114 RSA 2016
Assessee PAN AAATT8656P
Bench Panaji
Appeal Number ITA 158/PAN/2016
Duration Of Justice 2 month(s) 15 day(s)
Appellant The Totgar Seva Samiti., Sirsi
Respondent The Deputy Commissioner of Income Tax, Circle-1(1), Hubli., Hubli
Appeal Type Income Tax Appeal
Pronouncement Date 05-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 05-10-2016
Assessment Year 2010-2011
Appeal Filed On 21-07-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH PANAJI BEFORE SHRI GEORGE MATHAN HONBLE JUDICIAL MEMBER ITA NO. 158 /P A N/201 6 (ASST. YEAR : 20 1 0 - 11 ) THE TOTGAR SEVA SAMITI SRIPAD HEGDE KADAVE INSTITUTE OF MEDICAL SCIENCES SIRSI VS. DCIT CI RCLE - 1(1 ) HUBLI . PAN NO. AAATT 8656 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRIKRISHNA KELKAR C A DEPARTMENT BY : SHRI MANJIT SINGH - DR DATE OF HEARING : 0 5 / 1 0 /201 6 . DATE OF PRONOUNCEMENT : 0 5 / 1 0 /201 6 . O R D E R THI S IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) HUBLI IN APPEAL NO. 98/CIT(A)/HBL/2012 - 13 DATED 28/03/2016 FOR THE ASSESSMENT YEAR 2010 - 11 . 2. SHRI SHRIKRISHNA KELKAR CA REPRESENTED ON BEHALF OF THE AS SESSEE AND SHRI MANJIT SINGH DEPARTMENTAL REPRESENTATIVE REPRESENTED ON B EH A L F OF THE REVENUE . 3 . IT WAS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE IS A TRUST WHICH HAS REGISTRATION UNDER SECTION 12A AND IS RUNNING HOSP ITAL AT SIRSI. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD RECEIVED SUBSTANTIAL DONATIONS FROM M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. DURING THE RELEVANT A SSESSMENT Y EAR . IT WAS THE SUBMISSION THAT THE ASSESSEE - HOSPITAL HAD PROVIDED CONCESSIONAL TR EAT MENT TO SOME OF THE MEMBER S OF M/S. TOTAGARS 2 ITA NO S . 158 /P A N/201 6 COOPERATIVE SALE SOCIETY LTD. TO THE EXTENT OF A DISCOUNT OF 25% ON THEIR BILLS . THE QUANTUM OF DISCOUNT WAS 11 38 279/ - . IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD BROUGHT TO TAX THE SAID AMOUNT OF 11 38 279/ - BY INVOKING THE PROVISIONS OF SECTION 12(2) READ WITH SEC. 13(1)(C)(II) & 13(3)(B) OF THE ACT. 4 . IT WAS THE SUBMISSION THAT THE SOCIETY A ND ITS MEMBERS WERE SEPARATE AND THE CONTRIBUTIONS WERE FROM THE SOCIETY AND WAS NOT FROM THE INDIVIDUAL MEMBERS. FOR THIS PROPOSITION HE PLACED RELIANCE ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF KUNNATHUNAD C.C. COOP. SOCIETY VS. R EGIONAL DIRECTOR ESIC REPORTED IN (1989) IILLJ 27 KER . IT WAS FURTHER SUBMISSION THAT NONE OF THE MEMBERS OF M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. HAD GIVEN ANY DONATIONS TO THE ASSESSEE TRUST WHICH EXCEEDED MORE THAN 50 000/ - . IT WAS ALSO THE SUBMISSION THAT DURING THE RELEVANT A SSESSMENT Y EAR THE ASSESSEE HAS DISCLOSED EXPENDITURE OVER INCOME AND CONSEQUENTLY FILED A NIL RETURN. WITHOUT PREJUDICE EVEN ASSUMING I.E. THE SAID AMOUNT OF 11 38 279/ - WAS TO BE ADDED TO THE ASSESSEES INCOME ONLY THE EXCESS OF EXPENDITURE OVER INCOME WOULD GET REDUCE AND THERE COULD BE NO TAXABLE INCOME THAT WOULD GENERATE IN THE HANDS OF THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ADDITIONS AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE DELETED. 5. IN REPLY DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. H A D SUBSTANTIAL L Y CONTRIBUTED TO THE ASSESSEE TRUST. IT WAS THE SUBMISSION THAT O UT OF THE TOTAL DONATIONS OF 7 68 43 283/ - RECEIVED BY THE ASSESSEE TRUST NEARLY 90% AMOUNTING TO 6 90 93 428/ - WAS THE CONTRIBUTION/ DONATION BY M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. IT WAS THE SUBMISSION THAT AS IT IS A MEMBER OF M/S. TOTAGAR S COOPERATIVE SALE SOCIETY LTD. WHICH HAS RECEIVED THE BENEFIT IN THE FORM OF A DISCOUNT OF 3 ITA NO S . 158 /P A N/201 6 25% OF THE BILLS THE PROVISIONS OF SECTION 13(1)(C)(II) READ WITH SEC. 13(3)(B) APPLIED. IT WAS THE SUBMISSION THAT T H E O R D E R O F T H E COMMISSIONER OF INCOME TAX (APPEALS) W A S L I A B L E T O B E U P H E L D . 6 . I HAVE CONSIDERED THE RIVAL SUBMISSIONS. W H E N I N T E R P R E T I N G T H E P R O V I S I O N S O F T H E ACT R E L A T I N G T O T H E E X E M P T I O N S S T R I C T I N T E R P R E T A T I O N I S C A L L E D F O R . A P E R U S A L O F T H E P R O V I S I O N S O F S E C T I O N 1 3 ( 1 ) ( C ) P R O V I D E S T H A T T H E B E N E F I T UNDER SECTION 1 1 O R 1 2 I S N O T T O O P E R A T E S O A S T O E X C L U D E F R O M T H E T O T A L INCOME R E C E I P T S I F A N Y P A R T O F S U C H INCOME O R A N Y P R O P E R T Y O F T H E T R U S T O R T H E I N S T I T U T I O N I S D U R I N G T H E P R E V I O U S Y E A R U S E D O R A P P L I E D D I R E C T L Y O R I N D I R E C T L Y F O R T H E B E N E F I T O F A N Y P E R S O N R E F E R R E D T O I N S U B - S E C T I O N ( 3 ) . S E C T I O N 1 3 ( 3 ) ( C ) A S R E F E R R E D T O B Y T H E R E V E N U E T A L K S O F T H E PERSONS B E I N G T H E A U T H O R F O U N D E R O R P E R S O N I S A H U F A M E M B E R O F T H E F A M I L Y . A D M I T T E D L Y M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. I S N O T A H U F THEREFORE I T D O E S A P P L Y T O E X C L U D E T H E B E N E F I T . T H E B E N E F I T H A S N O T B E E N G I V E N N O R IS IT T H E C A S E O F T H E R E V E N U E T H A T T H E D I S C O U N T H A S B E E N G I V E N T O T H E A U T H O R O F T H E ASSESSEE T R U S T O R T H E F O U N D E R . I N F A C T A P E R U S A L O F T H E R E C O R D T O S H O W T H A T M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. H A S N E A R L Y 2 3 2 9 9 M E M B E R S . I T I S A L S O N O T D I S P U T E D B Y T H E R E V E N U E T H A T N O N E O F T H E M E M B E R S H A V E I N T H E I R I N D I V I D U A L C A P A C I T Y G I V E N A N Y D O N A T I O N E X C E E D I N G 5 0 0 0 0 / - T O T H E ASSESSEE T R U S T . N E I T H E R I T I S T H E C A S E O F T H E R E V E N U E T H A T A N Y O F T H E M E M B E R S O F T H E M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. W E R E T H E P E R S O N S W H O H A D C O N T R I B U T E D 5 0 0 0 0 / - O R M O R E T O T H E T R U S T R E C E I V E D T H E B E N E F I T . I T I S A L S O N O T T H E C A S E O F T H E R E V E N U E T H A T W H E N A P P L Y I N G F O R M E M B E R S H I P I N M/S. TOTAGARS COOPERATIVE SALE SOCIETY LTD. T H E M E M B E R S A R E G I V E N A N Y E N T I T L E M E N T O F A N Y D I S C O U N T I F T H E Y S E E K T R E A T M E N T F R O M T H E ASSESSEE T R U S T . T H U S I T B E C O M E S C L E A R T H A T T H E R E I S N O V I O L A T I O N O F P R O V I S I O N S O F S E C T I O N 1 3 ( 1 ) ( C ) ( I I ) N O R T H E P R O V I S I O N S O F S E C T I O N 1 3 ( 3 ) ( C ) W O U L D A P P L Y I N ASSESSEE S C A S E . I N T H E S E CIRCUMSTANCES T H E ADDITION A S M A D E B Y T H E ASSESSING OFFICER A N D A S 4 ITA NO S . 158 /P A N/201 6 C O N F I R M E D B Y T H E COMMISSIONER OF INCOME TAX (APPEALS) S T A N D S D E L E T E D . 7 . IN THE RESULT APPEAL OF THE ASSESSEE STANDS ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON W E D N E S D A Y THE 0 5 TH DAY OF OCTOBER 201 6 AT GOA . (GEORGE MATHAN) JUDICIAL MEMBER DATED : 0 5 TH OCTOBER 201 6 . VR/ - COPY TO: 1 . THE ASSESSEE. THE TOTGAR SEVA SAMITI SRIPAD HEGDE KADAVE INSTITUTE OF MEDICAL SCIENCES SIRSI . 2 . THE REVENUE. D C IT C I R C L E - 1( 1 ) H U B L I . 3 . THE CIT ( E X E M P T I O N S ) B A N G A L O R E . 4 . THE CIT(A) H U B L I . 5 . THE D.R . 6 . GUA RD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T. PANAJI .