ITO (E), New Delhi v. Indian Olympic Association, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : C NEW DELHI) BEFORE SHRI A.D. JAIN J UDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA. NO.149/DEL./2010 (ASSESSMENT YEAR : 2001-02) M/S INDIAN OLYMPIC ASSOCIATION VS. DDIT TRUST CI RCLE 2 B-29 QUTAB INSTITUTIONAL AREA NEW DELHI. NEW DELHI-16. (PAN/GIR NO.AAATI3010J) AND ITA NO.254/DEL./2010 (ASSESSMENT YEAR : 2001-02) ITO (E) TRUST WARD-II VS. M/S INDIAN OLYMPIC ASS OCIATION NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HIREN MEHTA CA (APPEAL WITHDRAW AL) REVENUE BY : SMT. MONA MOHANTY SR.DR ORDER PER BENCH : THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE WHICH ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-XXI NEW DELHI DATE D 12.08.2009 FOR AY 2001-02. FOR THE SAKE OF CONVENIENCE BOTH THE APPEALS ARE BEING DISPOSED OF BY THIS COMMON ORDER. FIRST WE TAKE UP ASSESSEES APPEAL I.E. ITA NO.149 /DEL./2010. 2. IN THIS APPEAL THE ASSESSEE HAS THE GRIEVANCES FOR NOT ALLOWING EXEMPTION U/S 10(23) AND U/S 11 OF THE I.T. ACT. LD.AR OF THE AS SESSEE HAS WITHDRAWN THIS APPEAL FOR THE REASON THAT AS PER TRIBUNAL DECISION DATED 19.3 .2010 IN ITA NO.3703/DEL./2008 IN ASSESSEES OWN CASE FOR AY 2002-03 IT WAS HELD BY THE TRIBUNAL THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT FROM 1.4.2 001 ONLY I.E. FOR AY 2002-03. THE SUBMISSION OF THE LD.AR OF THE ASSESSEE DATED 29.04 .2010 REGARDING WITHDRAWAL OF THE ITA NOS.149 & 254/DEL./2010 (AY : 2001-02) 2 ASSESSEES APPEAL IS PLACED ON RECORD AND THE SAME IS ALLOWED. THE APPEAL OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. 3. NOW WE TAKE UP THE APPEAL OF THE REVENUE I.E. I TA NO.254/DEL./2010. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: 1. THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN FACTS A ND CIRCUMSTANCES OF THE CASE AND IN LAW IN UPHOLDING THE AOS ACTION IN REJ ECTING THE CLAIM FOR EXEMPTION U/S 10(23). 2. THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN FACTS AN D CIRCUMSTANCES OF THE CASE AND IN CONFIRMING THE ACTION OF THE AO IN DENY ING APPELLANT BENEFIT OF EXEMPTION UNDER SECTION 11. 4. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER WHEREAS LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A). IT WAS POINTED OUT BY THE BENCH THAT IN THE PRESENT CASE THIS IS THE SUBMISSION OF THE ASSESSEE BEFORE CIT(A) AS NOTED BY THE CIT(A) ON PAGE 9 OF HIS ORDER THAT AS PER ASSESSEE THE AO HAS NOT AT ALL GONE INTO THE DETAILS OF EXPENSES INCURRED AND WITHOUT GIVING ANY OPPORTUNIT Y DISALLOWED THESE EXPENSES BY STATING THAT THERE IS NO NEXUS BETWEEN THE INCOME E ARNED AND EXPENSES INCURRED. IT WAS POINTED OUT BY THE BENCH THAT SINCE THE EXPENSES HA VE NOT BEEN EXAMINED BY THE AO THE ISSUE REGARDING ALLOW ABILITY OF EXPENSES HAS TO GO BACK TO THE FILE OF THE AO FOR A FRESH DECISION. IT WAS SUBMITTED BY THE LD.AR OF THE ASS ESSEE THAT SUITABLE DIRECTION MAY BE GIVEN REGARDING ALLOW ABILITY OF THESE EXPENSES IF THE SAME ARE FOUND TO BE REVENUE IN NATURE AND CONNECTED TO THE RECEIPTS OF THE ASSESSE E WHICH ARE TAXED AS INCOME AND IF THE SAME ARE NOT IN THE NATURE OF PERSONAL EXPENSES/CAP ITAL EXPENSES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO HAS ASSESSED THE INCOM E OF THE ASSESSEE AS AN AOP AND THE ENTIRE RECEIPTS OF RS.284.14 LAKHS HAS BEEN ASSESSE D AS INCOME WITHOUT ALLOWING ANY DEDUCTION ON ACCOUNT OF EXPENSES WHEREAS IT IS THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE HAS INCURRED EXPENSES OF RS.326 LAKHS DURING THIS P ERIOD. THE CIT(A) HAS ALLOWED THE DEDUCTION ON ACCOUNT OF THESE EXPENSES BUT SINCE I T IS ADMITTED POSITION THAT THE EXPENSES WERE NOT EXAMINED BY THE AO THIS ISSUE HAS TO GO B ACK TO THE FILE OF THE AO FOR A FRESH DECISION. WE HOLD ACCORDINGLY. THE ORDER OF THE CIT(A) ON THIS ISSUE IS SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FILE OF THE AO F OR A FRESH DECISION. THE EXPENSES ITA NOS.149 & 254/DEL./2010 (AY : 2001-02) 3 INCURRED BY THE ASSESSEE HAS TO BE ALLOWED IF THE S AME ARE INCURRED TO EARN THESE RECEIPTS OF RS.284.14 LAKHS WHICH IS ASSESSED AS INCOME OF T HE ASSESSEE. THE ASSESSEE HAS TO FURNISH COMPLETE DETAILS OF THESE EXPENSES AND THE ASSESSEE HAS TO SATISFY THE A.O. THAT THESE EXPENSES ARE OF REVENUE NATURE AND ARE INCURR ED FOR EARNING THESE RECEIPTS AND THE SAME ARE NEITHER CAPITAL EXPENDITURE NOR PERSONAL E XPENDITURE. THE AO SHOULD PASS NECESSARY ORDER AS PER LAW IN THE LIGHT OF ABOVE DI SCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED WHEREAS THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN OPEN COURT ON THE DATE OF HE ARING I.E. 29.04.2010. SD/- SD/- (A.D. JAIN) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED APRIL 29 2010. SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXI NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR/ITAT ITA NOS.149 & 254/DEL./2010 (AY : 2001-02) 4