HEH THE NIZAMS JUBILEE PAVILION TRUST,HYDERABAD vs. ITO., EXEMPTION WARD-1(2), HYDERABAD

आयकर अपीलीय अधिकरण, हैदराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ‘B’ Bench, Hyderabad

श्री रविश सूद, न् याययक सदस् य एवं
श्री मिुसूदन सावडिया, लेखा सदस् य के समक्ष ।
BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER
आ.अपी.सं /ITA No.857/Hyd/2025
(निर्धारण वर्ा/Assessment Year:2018-19)

M/s. HEH The Nizams Jubilee
Pavilion Trust, Hyderabad.
PAN:AAATH1601E

Vs.
Income Tax Officer (Exemption),
Ward-1(2), Hyderabad.
(Appellant)

(Respondent)

निर्धाररती द्वधरध/Assessee by: Shri B. Satyanarayana Murthy,
C.A.
रधजस् व द्वधरध/Revenue by:: Dr. Sachin Kumar, SR-DR

सुिवधई की तधरीख/Date of hearing: 04/08/2025
घोर्णध की तधरीख/Pronouncement: 06/08/2025

आदेश/ORDER
PER MADHUSUDAN SAWDIA, A.M.:

This appeal is filed by M/s. HEH The Nizams Jubilee Pavilion
Trust (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 18.03.2025 for the A.Y. 2018-19. 2. The assessee has raised the following grounds of appeal :

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“1. The Orders of the lower authorities in so far as they are against the Appellant Trust, are contrary to the facts of the case and the Provisions of Law.
2. The learned Commissioner of Income Tax
(Appeals) is not justified in sustaining the disallowance of an amount of Rs.7,00,295/- out of expenditure incurred on commission of RS.16,18,028/-. The learned Commissioner of Income Tax (Appeals) should have appreciated that the expenses on commission were incurred solely and exclusively for bringing tourists to visit the pavilion owned and maintained by the Appellant Trust.
3. The learned Commissioner of Income Tax
(Appeals) erred in sustaining the disallowance of the amount of Rs.1,001/- claimed as a write off Sundry balances, consisting of balance in accounts for several years. The learned Commissioner of Income Tax
(Appeals) should have appreciated the amounts written of are not recoverable and that the write off is properly supported by the explanation offered by the Assessee.
Therefore, the learned Commissioner of Income Tax
(Appeals) should not have ignored the ground raised on this issue.
For these and other grounds that may be raised at the time of hearing it is prayed that the Order of the learned Commissioner of Income Tax (Appeals) be set aside or modified as may be deemed fit.”
3. The brief facts of the case are that, the assessee is a charitable trust running a museum, filed its return of income for the assessment year 2018–19 on 08.10.2018 declaring nil income. The case was ITA No.856/Hyd/2025 3

selected for scrutiny and accordingly, notice under section 143(2) of the Income Tax Act, 1961 (“the Act”) was issued on 22.09.2019. During the assessment proceedings, the Learned Assessing Officer
(“Ld. AO”) noticed that the assessee had claimed expenditure of Rs.16,18,028/- on account of commission. Out of this, an amount of Rs.7,00,295/- was paid to various agents (auto drivers) to attract visitors to the museum. Since the assessee failed to produce sufficient evidence in support of these payments, the Ld. AO disallowed the same while completing the assessment under section 143(3) r.w.s.
143(3A) and 143(3B) of the Act on 08.03.2021. Accordingly, the Ld.
AO computed the taxable income at Rs.6,99,119/-.
4. Aggrieved by the order of Ld. AO, the assessee preferred appeal before the Ld. CIT(A), who confirmed the findings of the Ld.
AO and dismissed the appeal of the assessee.
5. Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before this Tribunal. The Learned Authorised Representative (“Ld.
AR”) submitted that the assessee is running a museum and its only source of income is entry fees charged from visitors at the rate of ITA No.856/Hyd/2025 4

Rs.80/- for adults and Rs.15/- for children. In order to attract visitors to the museum, the trust paid commission to auto drivers at the rate of Rs.10/- per visitor. It was submitted that such commission was paid routinely and consistently in earlier years as well, and this is the only viable means to increase footfall. The Ld. AR referred to comparative figures for commission expenditure claimed in financial years 2015–
16, 2016–17 and 2017–18 to demonstrate consistency. He also placed reliance on the driver register maintained by the trust, which records vehicle number, number of persons brought, and driver’s signatures.
The copy of this register was placed at page nos. 10 to 25 of the paper book. It was contended that in such nature of transactions, drivers do not issue formal receipts or bills, and therefore, complete documentation could not be expected. Nonetheless, the assessee maintained proper internal records in support of such payments.
Accordingly, the Ld. AR prayed before the bench to delete the addition made by the Ld. AO.
6. Per contra, the Learned Departmental Representative (“Ld.
DR”) relied upon the orders of the Ld. AO and Ld. CIT(A) and submitted that the assessee failed to produce any concrete or third-

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party evidence in support of the claimed commission payments. It was submitted that the driver register placed on record does not mention the amounts actually paid or received by the drivers, and therefore cannot be accepted as conclusive proof. Accordingly, the Ld. DR prayed for upholding the disallowance and for dismissal of the appeal.
7. We have heard the rival contentions and perused the records placed before us. The assessee, a charitable trust running a museum, has claimed commission expenses of Rs.16,18,028/-, out of which Rs.7,00,295/- was paid to auto drivers to bring in visitors. The genuineness of the remaining amount is not in dispute. On perusal of the driver register (page nos. 10 to 25 of the paper book), we find that the assessee has maintained records showing vehicle numbers, number of persons visiting, and driver’s signatures. While these registers do not indicate the amount paid per entry, the consistent pattern of such entries indicates that a structured and repetitive mechanism was in place for such commissions. Given the peculiar nature of the assessee’s activity, promoting museum visits through informal channels like auto drivers, it is understandable that formal

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invoices or receipts may not be generated by the drivers. In such cases, complete third-party documentation cannot be insisted upon. At the same time, since there is absence of corroborative evidence of actual monetary payments
(such as cash vouchers, acknowledgements, etc.), we find it reasonable to estimate and allow part of the claim in view of the consistent pattern of such expenses and necessity for the purpose of promoting the museum. Accordingly, we deem it fit to allow 50% of the claimed expenditure of Rs.7,00,295/- on estimate basis. Thus, an amount of Rs.3,50,148/- is allowed as deduction, and the balance Rs.3,50,147/- is disallowed.
The appeal of the assessee is partly allowed, with direction to the Ld.
AO to recompute the income after allowing deduction of Rs.3,50,148/- on account of commission expenditure.
8. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 6th August, 2025. (RAVISH SOOD)
ACCOUNTANT MEMBER
Hyderabad, Dated: 06.08.2025. * Reddy gp

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Copy of the Order forwarded to :

BY ORDER,