Asstt. DIT (E) TC-II, New Delhi Vs. India Islamic Cultural Centre, Opp. Mausam Bhawan 87-88, Lodhi Estate New Delhi-110003
August, 05th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL: "C" BENCH: NEW DELHI
BEFORE SHRI R P TOLANI, JM AND SHRI D K SRIVASTAVA, AM
ITA No. 4127/Del/2012
Assessment Year: 2009-10
Asstt. DIT (E) v. India Islamic Cultural Centre,
TC-II, New Delhi Opp. Mausam Bhawan
87-88, Lodhi Estate
Revenue by: Shri Satpal Singh, Sr.DR
Assessee by: Shri R. S. Singhvi, CA.
Appeal filed by the Revenue is directed against the order passed by the ld.
CIT(A) on 30th May, 2012 for assessment year 2009-10, on the following grounds:
"1. On the facts and in the circumstances of the case and in law,
the Ld. CIT(A) has erred in treating Inspector Report as baseless on
account of absence of managing committee members statements
and verification from service provider when bills / invoices from the
facilities have been procured by the Inspector on independent basis.
2. Ld. CIT(A) has erred in treating gross sale consideration taken
from service provider on revenue sharing basis, as rent and not
commercial / business receipt.
3. Ld. CIT(A) has erred in treating the assessee under the field
of "Education" whereas the activities and accounts show it as
`General Public Utility'.
4. Ld. CIT(A) has erred in applying `The proova Sanskriti Kendra'
decision of Hon'ble ITAT, when the facts have been distinguished by
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5. Ld. CIT(A) has erred in allowing double deduction on account
of allowing depreciation on capital assets which have already been
claimed as application of income. Further whether Ld. CIT(A) is
justified in allowing this claim which was not made at the time of
assessment as `Doctrine of Estoppel' applies here.
6. Ld. CIT(A) has erred in treating membership fees corpus
income and not revenue receipt as held in the assessment order.
7. The appellant craves to add, to alter or amend any ground of
appeal raised above at the time of hearing."
2. The assessee is a society registered under the Societies Registration Act. Its
aims and objects, as per its Memorandum of Association are, briefly, to promote
mutual understanding and tolerance amongst various members of the society, to
remove misunderstanding about Islam and its teachings, to promote an
awareness of the ethos of Islamic culture, to promote mutual understanding,
appreciation and amity in the society, etc. The assessee is also registered as a
charitable institution u/s 12A of the Income-tax Act with the Commissioner of
Income-tax. The said registration was operative in the year under appeal. The
assessee filed its return of income for the year under appeal on 29.09.2009
declaring `Nil' income. During the course of scrutiny by the AO, the assessee was
found to be engaged in running a cafeteria and coffee shop. After examination of
the accounts, the AO felt that the assessee was engaged in the business of
running cafeteria and coffee shop with profit motive. He, therefore, did not allow
the benefit of exemption u/s 11 of the Income-tax Act to the assessee and
consequently assessed the total income of the assessee at Rs.1,07,19,773/-. On
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appeal, the ld. CIT(A) has decided the issue in favour of the assessee, for the
detailed reasons given by him in his appellate order.
3. Aggrieved by the order passed by the ld. CIT(A), the assessee is now in
appeal before this Tribunal. In support of appeal, the ld. DR relied upon the
findings recorded in the assessment order.
4. In reply, the ld. AR for the assessee relied upon the order passed by the ld.
CIT(A). He submitted that identical issue has been considered by this Tribunal in
the case of ADIT v. Indian Youth Centre, ITA No. 5502/Del/2012 for the
Assessment Year 2009-10 and thus the issue is squarely covered in favour of the
5. We have heard both the parties. As already stated earlier, the assessee is
registered as a charitable institution u/s 12A with the Commissioner of Income-
tax. As per income and expenditure account for the year under appeal, the
assessee had surplus of expenditure of Rs.73,34,469/- over income. In other
words, the assessee had not generated any profit from its activities as a charitable
institution. It is not in dispute that the aims and objects of the society are objects
of general public utility inasmuch as they attempt to promote better understanding
amongst various sections of the society. Establishing communal harmony and
better understanding between various sections of the society are purely in the
nature of objects of general public utility.
6. It is true that the assessee had generated profit from cafeteria and coffee
shop but the fact of the matter is that these facilities were created for the
members of the assessee-society. The profit so generated from cafeteria and
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coffee shop was utilized for achieving the aims and objects of the society. The
society had no overall profit in the year under appeal. Profits so generated from
cafeteria and coffee shop were ultimately used for achieving aims and objects of
the institution. Therefore, such profits generated from a few activities of the
institution cannot be used to convert a purely charitable institution into non-
charitable institution. The view that we are taking in the matter is supported by
the order passed by a Coordinate Bench of this tribunal referred to by the ld. AR
for the assessee at the time of hearing.
7. As regards admissibility for depreciation on capital assets for the purpose of
application of income, the issue stands covered by the judgment of the Hon'ble
Delhi High Court relied upon by the ld. CIT(A). The issue is also covered against
the Revenue by the decision of a Coordinate Bench of this Tribunal in the matter
referred to by the ld. AR for the assessee at the time of hearing.
8. In view of the foregoing, appeal filed by the Revenue is dismissed.
(R.P. TOLANI) (D. K. SRIVASTAVA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Order pronounced on 30.07.2014
(I C SUDHIR) (D. K. SRIVASTAVA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Copy forwarded to:
5. DR: ITAT
5 ITA 4127/Del/2012