Dy.Commissioner of Income Tax,(Exemptions),, Ahmedabad v. Animal Breeding Research Organization, (INDIA), Anand

ITA 2496/AHD/2015 | 2011-2012
Pronouncement Date: 09-11-2017 | Result: Dismissed

Appeal Details

RSA Number 249620514 RSA 2015
Assessee PAN AAATI0767N
Bench Ahmedabad
Appeal Number ITA 2496/AHD/2015
Duration Of Justice 2 year(s) 2 month(s) 15 day(s)
Appellant Dy.Commissioner of Income Tax,(Exemptions),, Ahmedabad
Respondent Animal Breeding Research Organization, (INDIA), Anand
Appeal Type Income Tax Appeal
Pronouncement Date 09-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 09-11-2017
Assessment Year 2011-2012
Appeal Filed On 24-08-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI MAHAVIR PRASAD JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER ./ ITA.NO.2496/AHD/2015 WITH CO NO.184/AHD/2015 / ASSTT. YEAR: 2011-12 DCIT (EXEMPTION) CIR.2 AHMEDABAD. VS ANIMAL BREEDING RESEARCH ORGANISATION (INDIA) C/O. NDDB NR.JAGNATH MAHADEV ANAND 388 001. PAN : AAATI 0767 N ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI PRASOON KABRA SR.DR ASSESSEE BY : SHRI SANJAY R. SHAH AR / DATE OF HEARING : 06/11/2017 / DATE OF PRONOUNCEMENT: 09/11/2017 $%/ O R D E R PER MAHAVIR PRASAD JUDICIAL MEMBER: THIS APPEAL ALONG WITH CO NO.184/AHD/2015 HAS BEEN PREFERRED BY THE ASSESSEE AGAINST ORDER OF THE LD.CIT(A) VI AHMEDA BAD AND FOLLOWING GROUND HAVE BEEN TAKEN: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD.CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEES A PPEAL NEGATING THE FINDING OF THE AO DENYING THE BENEFITS OF SECTION 1 1(1)(A) OF THE I.T. ACT IN VIEW OF PROVISO 1&2 INSERTED TO SECTION (15) OF THE I.T.ACT AND DELETING ADDITIONS MADE OF RS.RS.92 01 510/- ITA NO.2496 /AHD/2015 WITH CO 2 2. ON THE FACTS AND CIRCUMSTANCE THE CASE THE LD.CIT( A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE FILED IT S RETURN OF INCOME ON 30.9.2011 DECLARING TOTAL INCOME AT RS.NIL. CASE W AS SELECTED FOR SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS FRAM ED ON 27.3.2014 DECLARING INCOME AT RS.92 01 510/- AFTER DENYING CL AIM UNDER SECTION 11 OF THE ACT. ASSESSEE OBJECTED TO THE DENIAL OF EXEMPT ION UNDER SECTION 11 OF THE ACT ON ACCOUNT THAT IT WAS CARRYING ON BUSINESS OF HIGH QUALITY SEMEN ON COMMERCIAL BASIS AND WITH A PROFIT MOTIVE THE AO H AD DISCUSSED THE ISSUE IN PARA 4 TO 12 OF THE ASSESSMENT ORDER. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE WAS NOT INVOLVED IN CHARITABLE ACTIVITIES AS ITS ACTIVITIES/SERVICES WERE RENDERED FOR THE ADVANCEMENT OF GENERAL PUBLIC UTILITY FOR WHICH IT WAS RECEIVING SALE CONSIDERATION. THEREFORE THE AO HELD THAT AS PER THE REVISED PROV ISIONS OF CHARITABLE PURPOSE THE ASSESSEE WAS NO LONGER CHARITABLE TRUS T AND ACCORDINGLY THE ASSESSEE WAS NOT ELIGIBLE FOR EXEMPTION U/S.11 RWS 12A OF THE ACT. THE LD.AO ALSO HELD THAT THE ASSESSEE WAS CARRYING ON BUSINES S WITH PROFIT MOTIVE AND ITS ACTIVITIES WERE NO LONGER CHARITABLE AS IT HAD A SU RPLUS OF RS.92 01 510/- DURING THE RELEVANT YEAR. THE AO DENIED EXEMPTION U/S.11 TO THE ASSESSEE AND TREATED THE SURPLUS OF RS.92 01 510/- AS BUSINESS I NCOME OF THE ASSESSEE. AGAINST SUCH ORDER THE ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD.CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE ASSE SSEE. NOW ASSESSEE IS BEFORE US. 3. WHILE DECIDING THE APPEAL THE LD.CIT(A) HELD TH AT SINCE FACTS OF THE PRESENT CASE WERE EXACTLY SIMILAR TO THE ASSESSEES CASE DECIDED BY THE CIT(A) IN PARA 5.14 . THE LD.AR RELIED ON THE ORDER OF TH E CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE AND ON SIMILAR GRO UNDS THE ITAT HELD THAT ITA NO.2496 /AHD/2015 WITH CO 3 WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE FACTS OF TH E ASSESSEE TRUST ARE SIMILAR TO THE FACTS OF SABARMATI ASHRAM GAUSHALA TRUST AND I N ITS ORDER HONBLE HIGH COURTS DECISIONS HAVE BEEN DISCUSSED AND THE SAME IS AS UNDER: 'WE ARE WHOLLY IN AGREEMENT WITH THE VIEW OF THE TR IBUNAL. THE OBJECTS OF THE TRUST CLEARLY ESTABLISH THAT THE SAME WAS FO R GENERAL PUBLIC UTILITY AND WHERE FOR CHARITABLE PURPOSES. THE MAIN OBJECTIVES OF THE TRUST ARE-TO BREED THE CATTLE AND ENDEAVOUR TO IMPR OVE THE QUALITY OF THE COWS AND OXEN IN VIEW OF THE NEED OF GOOD OXEN AS I NDIA IS PROMINENT AGRICULTURAL COUNTRY TO PRODUCE AND SALE THE COW M ILK; TO HOLD AND CULTIVATE AGRICULTURAL LANDS; TO KEEP GRAZING LANDS FOR CATTLE KEEPING AND BREEDING TO REHABILITATE AND ASSIST RABARIS AN D BHARWADS; TO MAKE NECESSARY ARRANGEMENTS FOR GETTING INFORMATICS AND SCIENTIFIC KNOWLEDGE AND TO DO SCIENTIFIC RESEARCH WITH REGAR D TO KEEPING AND BREEDING OF THE CATTLE AGRICULTURE USE OF MILK AN D ITS VARIOUS PREPARATIONS ETC.; TO ESTABLISH OTHER ALLIED INSTI TUTIONS LIKE LEATHER WORK AND TO RECOGNIZE AND HELP THEM IN ORDER TO MAK E THE COW KEEPING ECONOMICALLY VIABLE; TO PUBLISH STUDY MATERIALS BO OKS PERIODICALS MONTHLIES ETC. IN ORDER TO PUBLICIZE THE OBJECTS O F THE TRUST AS ALSO TO OPEN SCHOOLS AND HOSTELS FOR IMPARTING EDUCATION IN COW KEEPING AND AGRICULTURE HAVING REGARD TO THE TRUST OBJECTS. ALL THESE WERE THE OBJECTS OF THE GENERAL PUBLIC UT ILITY AND WOULD SQUARELY FALL UNDER SECTION 2 (IS) OF THE ACT. PROF IT MAKING WAS NEITHER THE AIM NOR OBJECT OF THE TRUST. IT WAS NOT THE PRI NCIPAL ACTIVITY. MERELY BECAUSE WHILE CARRYING OUT THE ACTIVITIES FOR THE P URPOSE OF ACHIEVING THE OBJECTS OF THE TRUST CERTAIN INCIDENTAL SURPLU SES WERE GENERATED WOULD NOT RENDER THE ACTIVITY TO THE NATURE OF TRAD E COMMERCE OR BUSINESS. AS CLARIFIED BY THE CBDT IN ITS CIRCULAR NO. 11/2008 DATED 19 TH DECEMBER 2008 THE PROVISO AIMS TO ATTRACT THOSE AC TIVITIES WHICH ARE TRULY IN THE REGARDED AS BUSINESS EVEN WHEN PRO FIT MOTIVE CANNOT BE ESTABLISHED/PROVED. IN SUCH CASES THERE SHOULD BE EVIDENCE AND MATERIAL TO SHOW THAT THE ACTIVITY HAS CONTINUED ON SOUND AND RECOGNIZED BUSINESS PRINCIPLES AND PURSUED WITH RE ASONABLE CONTINUITY. THERE SHOULD BE FACTS AND OTHER CIRCUMS TANCES WHICH JUSTIFY AND SHOW THAT THE ACTIVITY UNDERTAKEN IS IN FACT IN THE NATURE OF BUSINESS. THE TEST AS PRESCRIBED IN RAIPUR MANUFACT URING COMPANY [1967] 19 STC 1 (SC) AND SOI PUBLICATION FUND [20Q2 ] 258 ITR 70 (SC); {2002} 126 STC 288 (SC} CAN BE APPLIED. THE S IX INDICIA ITA NO.2496 /AHD/2015 WITH CO 4 STIPULATED IN LORD FISHER [1981] STC 238 ARE ALSO R ELEVANT. EACH CASE THEREFORE HAS TO BE EXAMINED ON ITS OWN FACTS. IN VIEW OF THE AFORESAID ENUNCIATION THE REAL ISSU E AND QUESTION IS THT WHETHER THE PETITIONER-INSTITUTE PURSUES THE ACTIVI TY OF BUSINESS TRADE OR COMMERCE. TO OUR MIND THE RESPONDENT WHILE DEAL ING WITH THE SAID QUESTION HAS NOT APPLIED THEIR MIND TO THE LEGAL PR INCIPLES ENUNCIATED ABOVE AND HAVE TAKEN A RATHER NARROW AND MYOPIC VIE W BY HOLDING THAT THE PETITIONER-INSTITUTE IS HOLDING COACHING CLASSE S AND THAT THIS AMOUNTS TO BUSINESS.' IN THE RESULT WE DO NOT FIND THAT THE TRIBUNAL HAS COMMITTED ANY ERROR AND THE TAX APPEAL IS THEREFORE DISMISSED. 4. RESPECTFULLY FOLLOWING THE HONBLE HIGH COURTS ORDER AND ITATS ORDER IN ASSESSEES OWN CASE DEPARTMENT ALLOWED TH E CLAIM AND SIMILAR EXEMPTION WAS GIVEN BY THE DEPARTMENT. IN VIEW OF T HE ABOVE WE DISMISS THE APPEAL OF THE REVENUE. 5. SO FAR AS CO IS CONCERNED IN CO THE ASSESSEE HA S TAKEN FOLLOWING GROUNDS: 3. THE ASSESSING OFFICER WHILE HOLDING THE APPELL ANT'S INCOME AS BUSINESS INCOME ERRED IN NOT GRANTING SET OFF OF BROUGHT FOR WARD UNABSORBED DEPRECIATION ON THE GROUND THAT IT WAS DEFICIT OF EARLIER YEARS WHICH CANNOT BE TREATED AS BUSINESS LOSS. IT IS SUBMITTED IT BE SO HELD NOW. 3.1 THE ASSESSING OFFICER ERRED IN HOLDING THAT IN EARLIER YEARS APPELLANT WOULD HAVE GOT DEDUCTION OF THE CAPITAL EXPENDITURE AS AP PLICATION OF FUNDS AND SET OFF OF UNABSORBED DEPRECIATION NOW WOULD RESULT IN DOUB LE DEDUCTION. THE APPELLANT SUBMITS THAT IN THE EARLIER YEARS IT HAS NOT CLAIME D DEDUCTION OF CAPITAL EXPENDITURE BUT HAD CLAIMED ONLY DEPRECIATION ACCOR DINGLY THERE IS NO DOUBLE DEDUCTION. IT IS SUBMITTED IT BE SO HELD NOW. 3.2 THE ASSESSING OFFICER ERRED IN NOT APPRECIATING THE SETTLED LEGAL POSITION THAT THE UNABSORBED DEPRECIATION CAN BE SET OFF AGAINST ANY INCOME. IT IS SUBMITTED IT BE SO HELD NOW. 4. THE ASSESSING OFFICER HAS ERRED IN COMPUTING T AX ON THE TOTAL INCOME DETERMINED BY HIM AT FLAT RATE OF 30% IN PLACE OF C ORRECT SLAB RATE AS APPLICABLE TO AN ASSOCIATION OF PERSONS (AOP). IT IS SUBMITTED IT BE SO HELD NOW. ITA NO.2496 /AHD/2015 WITH CO 5 6. THE ASSESSING OFFICER HAS ERRED IN CHARGING I NTEREST UNDER SECTION 234B OF THE ACT & HAS ERRED IN WITHDRAWING INTEREST UNDER S ECTION 244A. 6. WE HAVE GONE THROUGH RELEVANT MATERIAL. IN CONN ECTED APPEAL ITA NO.2496/AHD/2015 WE HAVE GIVEN RELIEF TO THE ASSESS EE AND DISMISSED THE APPEAL OF THE DEPARTMENT. THE LD.AR CITED AN ORDER OF THIS CO-ORDINATE BENCH IN ASSESSES OWN CASE IN ITA NO.2016/AHD/201 AND CO NO.260/AHD/2014 ASSTT.YEAR 2010-11. IT WAS HELD BY THE CO-ORDINATE BENCH THAT COMING TO THE CROSS OBJECTION OF THE ASSESSEE WE FIND THAT THE D EFICIT SHOWN IN THE EARLIER YEARS IS ELIGIBLE TO BE GIVEN SET OFF FOR SURPLUS IF ANY FOR THE YEAR UNDER CONSIDERATION. THEREFORE THE AO IS DIRECTED TO AL LOW THE SET OFF OF BROUGHT FORWARD DEFICIT WHILE GIVING APPEAL EFFECT TO OUR O RDER. IN VIEW OF THE ITATS ORDER WE ALLOW GROUND NOS.1 2 AND 3 IN CO. SO FA R AS GROUND NO.4 IS CONCERNED THE SAME HAS BECOME INFRUCTOUS AND AS FA R AS CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT AND WITHDRAWING INTER EST UNDER SECTION 244A IT NEEDS NOT TO BE ADJUDICATED BECAUSE THE SAME IS CON SEQUENTIAL. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED AND CO OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 9 TH NOVEMBER 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER ( MAHAVIR PRASAD ) JUDICIAL MEMBER AHMEDABAD; DATED 09/11/2017