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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI RAM LAL NEGI
अऩीराथी की ओय से / Appellant by : Shri Manjunatha Swamy, CIT-DR प्रत्मथी की ओय से/ Respondent by : Shri Nishant Thakkar and Ms. Jasmin Amalsadvala सुनवाई की तायीख / Date of Hearing : 03.11.2016 घोषणा की तायीख /Date of Pronouncement : 03.11.2016 आदेश / O R D E R
PER D. KARUNAKARA RAO, AM:
This appeal filed by the Revenue on 11.4.2014 is against the order of the CIT (A)-1, Mumbai dated 18.2.2014 for the assessment year 2006-07. In this appeal, Revenue raised the following grounds which read as under:- “1. That on the facts and in the circumstances of the case and in law, the Ld CIT (A) has erred in directing the AO to allow the exemption u/s 11 of the Act without appreciating the fact that the assessee is running commercial or business activity viz a restaurant, which is generating huge profit, is open to outsiders, not engaged in distribution of food to poor and needy people as contemplated in its charitable objects, and can no way be construed as a charitable activity, ignoring the detailed findings on facts by the AO.
2. That on the facts and in the circumstances of the case and in law, the Ld CIT (A) has erred in directing the AO to allow the exemption u/s 11 of the Act when the only charitable work carried out by the assessee is running a vegetarian restaurant and earning huge profit year after year and showing the expenses of running restaurant as expenses on the object of the trust.”
2. At the outset, Ld Counsel for the assessee briefly narrated the facts of the case and mentioned that in this case the assessment was completed u/s 148 r.w.s 147 of the Act, wherein the AO denied the exemption u/s 11 of the Act without appreciating the fact that the running of commercial business activity, a restaurant, as part of spreading the vegetarianism is the object of the assessee-Trust. Matter travelled to the first appellate authority and the CIT (A) granted relief relying on his
order for the AY 2008-09, details of which are given in paras 4.2 and 4.3 of his order. In this regard, Ld Counsel for the assessee read out the last lines of the said para 4.3 on page 9 of the CIT (A)‟s order and highlighted the following:-