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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI
Before: SHRI MAHAVIR SINGH, JM & SHRI RAJESH KUMAR, AM
O R D E R PER RAJESH KUMAR, A. M: This is an appeal filed by the revenue challenging the order dated 27.2.2015 passed by the ld.CIT(A) against holding that the income from letting out hall for marriage purpose and space for advertising is not a business activity.
At the outset, the ld.AR for the assessee submitted before us that the identical issue has been decided by the jurisdictional High Court in own case titled The Director of Income Tax (Exemption) V/s M/s Shri Vile Parle Kelavani Mandal in Income Tax Appeal No. 693/Mum/2013, dated 23.3.2015 and therefore prayed that the ground raised
by the revenue should be dismissed. L.d DR appears to be fairly agreed to the submissions of the ld.AR.
3. We have carefully considered the rival contentions, perused the material placed before us during the course of hearing including the decision of authorities below as also the decisions relied upon by the ld. AR. We find that the Hon’ble Jurisdictional High Court in the assessee’s own case (supra)has decided the identical issue and for the sake of convenience, relevant operative part of the judgment is reproduced below: “5. The Tribunal has held that the "Management and Development Program & Consultancy Charges' is part and parcel of 'Narsee Monjee Institute of Management Studies' which has been set up by the respondent-assessee. The respondent-assessee is a trust and has set up 30 schools and colleges. The Commissioner as also the Tribunal has found that the element of business is missing in conducting management courses. There may be some surplus generated which itself is applied towards the attainment of the object of the educational institute. The separate books of account cannot be insisted upon because once this programme is part and parcel of the activities undertaken and carried out by the Narsee Moonjee Institute of Management Studies, then the condition precedent set out in sub-section (4A) of section 11 of the I.T. Act is completely satisfied. Such finding of fact cannot be termed as perverse and it is in consonance with the factual aspect regarding activities of the trust and the object that it is seeking to achieve. Similarly, in regard to income from the hiring of the premises and advertisement rights, the said question is also not substantial question of law. Letting out of halls for marriages, sale and advertisement rights has not been found to be a regular activity undertaken as a part of business. The educational institutions require funds. The income is generated from giving various halls and properties of the institution on rentals only on Saturdays and Sundays and on public is not incidental to attain the objects of the trust. This being merely an incidental activity and the income derived from it is used for the educational institute and not for any particular person, separate books of account are also maintained, then, this income cannot be brought to tax. This conclusion is also not perverse and given the facts and circumstances which are undisputed.”
As far as question No.4 is concerned, this Court has repeatedly held that there is nothing like double deduction. When the assessee has acquired an asset from the income of the trust and thereafter the amount that is claimed is the depreciation on the use of the assets, such depreciation claim does not mean double deduction. The deduction earlier claimed is towards towards application of funds of the trust for acquiring assets. The latter is depreciation and it is permissible deduction considering the use of the assets. This has been clarified repeatedly by this Court. If any reference is required then the case of CIT v. Institution of Banking Personnel Selection (IBPS) [2003] 264 ITR 110/131 Taxman 386 (Bom.) is enough.
Going by the law laid down by this Court, we are of the opinion that that even the question No.4 in the paper-book cannot be termed as substantial question of law. The appeal thus has no merits and is dismissed. No order as to costs.”
The issue raised in grounds of appeal
no.2,3 and 4 is that the ld.CIT(A) has erred in allowing the carry forward of deficit of Rs.189,02,19,641/- and allowing set off against the income of the subsequent years, without appreciating the facts that the same amounted to double deduction. First, by way of 100% depreciation of fixed assets in the year of purchase as application of income and secondly, by allowing depreciation. In the appellate proceedings, the ld. CIT(A) allowed the appeal of the assessee on this issue after considering the contentions and submissions of the assessee. The ld. CIT(A) allow the appeal in favour of the assessee by observing and holding as under: “7. In the 4th ground of appeal, the appellant has claimed that it is entitled to carry forward the deficit of earlier years and in this regard, the appellant has relied upon the judgement of Hon'ble Bombay High Court in the case of Institute of Banking Personnel, 264 ITR 110. I have considered the above submissions of the appellant and agree that this issue has been decided by Hon'ble Bombay High Court in the case of Institute of Banking Personnel (supra) in favour of the assessee. Hon'ble Bombay High Court in the said case has held that "Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the Trust [or charitable and religious purposes in the earlier years against the income earned by the Trust in the subsequent year will have to be regarded as application of income of the Trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in section 11 of the Act and that such adjustment will have to be excluded from the income of the Trust under section 11. (1 Ha) of the Act. Our view is also supported by the judgement of the Gujarat High Court in the case of CIT v. Shri Plot Shwetamber Murti Pujak Jain Mandal (1995) 211 ITR 293", Accordingly, the AO is directed to follow the principles laid down by Hon'ble Bombay High Court in the case of Institute of Banking Personnel (supra) and allow the appellant to carry forward the deficit of earlier years (after set-off, if any in the current year) after due process of verification. Ground of appeal No. 4 is treated to be allowed for statistical purposes.”
5. We have carefully considered the rival contentions, perused the material placed before us during the course of hearing including the decision of authorities below as also the decision of Hon’ble jurisdictional High Court in the case of Institute of Banking Personnel, 264 ITR 110. We find from the decision of the Hon’ble Jurisdictional High Court that the question no.3 was with respect to “3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law forward the case income exempted under section 11 of the Income-tax Act, 1961?" We find that the facts of the assessee are materially same to the case as decided by the Hon’ble High Court. We, therefore, respectfully following the ratio decidendi by the Hon’ble Jurisdictional High Court upholding the order of ld. CIT(A) on this issue and grounds raised by the revenue are accordingly dismissed.