THE COMMISSIONER OF INCOME TAX -EXEMPTION vs. THE DELHI PUBLIC SCHOOL SOCIETY

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ITA/745/2018HC DelhiDLHC01113399201801 October 2018Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE CHANDER SHEKHAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the first issue regarding the deletion of the addition of Rs. 9,75,31,625/- in respect of franchisee fees is covered against the Revenue by the High Court's own decision in Director of Income Tax (Exemption) versus Delhi Public School Society, (2018) 403 ITR 49 (Delhi). Therefore, no substantial question of law arises on this point. The second issue concerning the carry forward of deficit and its set off against income of a subsequent year is also covered by a previous judgment of the Delhi High Court in ITA No.1075/2008, Director of Income Tax versus Raghuvanshi Charitable Trust dated 27th July, 2010. As both issues are covered by precedents, the Court found no substantial question of law requiring consideration. Consequently, the appeal filed by the Revenue was dismissed. No specific operative directions were issued as the appeal itself was dismissed.

What were the facts?

The appeal by the Commissioner of Income Tax – Exemption (Revenue) challenges an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had upheld the Commissioner of Income Tax (Appeals) decision to delete an addition of Rs. 9,75,31,625/-. This addition was made by the Assessing Officer (AO) concerning franchisee fees received by the respondent-assessee, Delhi Public School Society, from various satellite schools. The assessment year(s) are not explicitly stated. The procedural history involves the AO making an addition, the CIT(A) deleting it, and the ITAT upholding the deletion. The Revenue is now appealing this ITAT order to the High Court.

What were the issues?

1. Whether the Income Tax Appellate Tribunal erred in upholding the deletion of the addition of Rs. 9,75,31,625/- made by the Assessing Officer in respect of franchisee fees received by the assessee from satellite schools, which turns on the interpretation of provisions related to income and its taxability. Assessee's Contention: Not recorded. Revenue's Contention: The Revenue argued that the addition made by the AO was justified. The ITAT's decision to uphold the deletion was incorrect. 2. Whether the Income Tax Appellate Tribunal erred in allowing the carry forward of a deficit and setting it off against the income of a subsequent year, which turns on the provisions governing carry forward and set off of losses. Assessee's Contention: Not recorded. Revenue's Contention: The Revenue argued against the carry forward and set off of the deficit against subsequent year's income.

AI-generated summary — verify with the full judgment below

$~18 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 745/2018

THE COMMISSIONER OF INCOME TAX –EXEMPTION ..... Appellant Through: Mr. Ruchir Bhatia, Ms. Vibhooti and Mr. Puneet Rai, Advocates.

Versus

THE DELHI PUBLIC SCHOOL SOCIETY ..... Respondent Through: Mr. Satyen Sethi, Mr. Arta Trana Panda and Ms. Gargi Sethee, Advocates.

CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE CHANDER SHEKHAR

O R D E R %

01.10.2018 First issue and question raised in the present appeal pertains to the Income Tax Appellate Tribunal upholding the decision of the Commissioner of Income Tax (Appeals) deleting the addition of Rs.9,75,31,625/- made by the Assessing officer in respect of franchisee fees received by the respondent-assessee from different satellite schools. The aforesaid issue is covered against the Revenue by the decision of this Court in Director of Income Tax (Exemption) versus Delhi Public School Society, (2018) 403 ITR 49 (Delhi).

The second issue raised by the Revenue on carry forward deficit and set off the same against the income of subsequent year is also covered by the Judgement of the Delhi High Court in ITA No.1075/2008, Director of Income Tax versus Raghuvanshi Charitable Trust dated 27th July, 2010. In view of the aforesaid position, no substantial question of law arises for consideration and hence the appeal is dismissed.

SANJIV KHANNA, J.

CHANDER SHEKHAR, J. OCTOBER 01, 2018 MR

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