ACIT, Circle 23(1) Room no.190, C.R.bdlg. New Delhi Vs. Indian Wind Energy Associates 3rd floor, PHD House, Siri Fort road August Kranti Marg New Delhi 110 016
May, 26th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : "C" NEW DELHI
BEFORE SHRI J. SUDHAKAR REDDY, AM AND
SHRI RAJPAL YADAV, JM
ITA No: 2744/Del/2012
AY : - 2007-08
ACIT, Circle 23(1) vs. Indian Wind Energy Associates
Room no.190, C.R.bdlg. 3rd floor, PHD House, Siri Fort road
New Delhi August Kranti Marg
New Delhi 110 016
PAN: AAAH 12639 R
Appellant by : Sh.Satpal Singh, Sr.D.R.
Respondent by: Sh.Paonam, Adv.
PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER
This is an appeal filed by the Revenue directed against the order dt.
29.3.2012 of the Ld.CIT(Appeals)-XII, New Delhi on the following grounds.
"1. On the facts and circumstances of the case the Ld.CIT(Appeals) has erred in
deleting the disallowance made by Assessing Officer of Rs.16,36,854/-
representing 15% of conference (workshop) expenses.
2. On the facts and circumstances of the case the Ld.CIT(Appeals) has erred in
deleting the disallowance made by Assessing Officer of Rs.2,96,040/- on
account of travelling expenses."
2. Facts in brief:- The assessee is a society registered under Societies
Registration Act, 1860 and engaged in promotion and development of wind
industry and running of Wind Mill in terms of its aims and objects. Income
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declared during the year in appeal was from Membership fees, Wind Mill,
Conference and other direct income the assessment of which was made by the
A.O. u/s 143(3) of the I.T.Act at a loss of Rs. 1,21,51,330/- as against the
returned loss of Rs. 1,44,86,227/- on account of certain disallowances and
addition made. The Assessing Officer inter-alia disallowed Rs.16,36,854/-
claimed as conference expenses and Rs.2,96,040/- as travelling expenses. The
assessee carried the matter in appeal. The Ld.CIT(Appeals) granted relief.
Aggrieved the revenue is in appeal.
3. We have heard Shri Satpal Singh, Sr.D.R. on behalf of the revenue and
Shri Paonam, the Ld.Counsel for the assessee. The Ld.CIT(Appeals) in his order
at para held as follows:
"Ground Nos. 2(a), (b) and (c) relate to the addition of Rs. 16,36,854/-
representing 15% of the cost for holding conference "5th World Wind Energy
Conference & Exhibition 2006". The material facts are that during the year by
virtue of an agreement dated 31-05-2006 entered into with World Wind Energy
Association (WWEA) the assessee hosted the 5th World Wind Energy
Conference and Exhibition from 6th to 8th November, 2006 at New Delhi. Under
the terms and conditions of the said agreement, the WWEA was to be paid 60%
of the net surplus of the total receipts from conference after meeting all the
expenses incurred in organizing the event. Total receipts from hosting the said
conference was in the sum of Rs. 1,58,45,445/ - and total expenditure incurred
under different heads was Rs.1,09,12,363/- thereby leaving a net surplus of Rs.
49,33,082/ - to be shared by WWEA and the assessee in the ratio of 60% and
40% respectively. Thus, a sum of Rs.29,59,855/- representing 60% of the net
surplus was payable by the assessee to WWEA. However, while drawing up
income and expenditure account of the conference (workshop) by the Auditors,
only 15% of the cost of Rs. 1,09,12,363/- which worked out to Rs. 16,36,854/-
was deducted as payable to WWEA as against actual amount of Rs. 29,59,855/-.
Thus, after accounting for 15% of cost, total expenditure was claimed at
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Rs.1,25,49,217/- and net surplus at Rs. 32,96,238/- in the income and
expenditure statement of WWEC-2006. Although separate account of the
conference hosted was maintained for which income and expenditure statement
was drawn up which was also duly audited, the entire gross receipts of Rs.
1,58,45,455/- from conference and total expenditure of Rs.1,25,49,217/- (taken
at Rs. 1,24,27,156/-) were accounted for in the books of the assessee. A perusal
of copies of the audited financial statements filed by the assessee will reveal that
except the claim of 15% of cost, no any other amount on account of amount
payable to WWEA had been charged either to income and expenditure account
of the assessee or to income and expenditure statement of the conference
(workshop). Thus, conclusion drawn by the A.O. that the amount of Rs.
16,36,854/- had been claimed twice is without any basis and unsustainable and
the impugned addition is liable to be deleted inasmuch as the claim was made in
terms of the agreement as found by the A.O. himself. It is relevant to mention
here that vide invoice dated 19-03-2007 WWEA had raised a bill for Euro 32000
against their share in the net surplus of the conference income and the same
had been paid by the assessee after deduction of tax u/s 195 of the I.T.Act.
4. After hearing rival contentions, we find that the A.O. is wrong in coming
to a conclusion that the assessee has claimed a deduction twice. The findings of
the Ld.CIT(Appeals) could not be controverted by the Ld.D.R. There is no
double deduction claimed. Hence this ground of the Revenue is dismissed.
5. Ground no.2 is on the issue of travelling expenses. The Ld.D.R. could not
controvert the findings of the Ld.CIT(Appeals) that this expenditure is different
from the conference expenses. He held that separate set of books are being
maintained by the assessee. This factual finding is upheld. This ground is
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6. In the result the appeal by the Revenue is dismissed.
Order pronounced in the Open Court on 21st May,2014.
(RAJPAL YADAV) (J.SUDHAKAR REDDY)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: the 21st May, ,2014
Copy of the Order forwarded to:
1. Assessee; 2.Respondent; 3.CIT; 4.CIT(A); 5.DR; 6.Guard File