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Income Tax Appellate Tribunal - Delhi

Civil Services Institute, Dehradun vs Dcit, Circle- 1(4), Rishikesh on 6 July, 2018

         IN THE INCOME TAX APPELLATE TRIBUNAL
             DELHI BENCH: 'Friday' NEW DELHI

         BEFORE SHRI R.S. SYAL, VICE PRESIDENT
                            &
       SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER

                      Stay No.-479/Del/2018
                   (In ITA No. 4485/Del/2018)
                   (Assessment Year: 2015-16)

M/s Civil Services Institute,          vs    DCIT
C/o M/s Hemant Arora & Co. LLP,              Circle 1(4)
354-B, 30 Civil Lines, Roorkee,              Rishikesh
Uttarakhand
PAN No. AABTC6000B

        Assessee by           Dr. Rakesh Gupta, Adv.
        Revenue by            Sh. Vijay Kumar Jiwani, Sr. DR

                Date of Hearing             06.07.2018
             Date of Pronouncement          06.07.2018

                               ORDER
PER K. NARASIMHA CHARY, J.M.

By way of this petition M/s Civil Services Institute-Dehradun (Assessee) seeks stay of outstanding demand of Rs.1,91,47,556/-.

2. According to the assessee, they are the society, registered with the Registrar of the Societies under the Societies Registration Act, 1860 to promote welfare of the officers of Civil Services by conducting seminars, debates, etc. They filed return of income for the AY 2015-16 on 06.09.2015 declaring a total loss of Rs. 46,62,283/-, and during the scrutiny, the Assessing Officer made 2 Stay No. 479/Del/2018 an addition of Rs. 5 crores on account of capital grant receipt, Rs. 94,66,932/- by disallowing the claim for depreciation on the building and a sum of Rs. 55,21,641/- by treating the income earned from the fixed deposit with their bank as income from other sources.

3. It is submitted on behalf of the assessee that in view of a series of decisions in Basanti Devi & Chakhan Lal Garg vs. CIT, ITA No. 927/2009, date of order 23.09.2009 (Del) (HC) and DCIT vs. Nasik Gymkhana, 77 ITD 500 (Pune, ITAT), the capital grant provided to a charitable institution has to be decided on the parameters of Capital vs. Revenue Receipts and in this case the Government of Uttarakhand had sanctioned a one-time contribution of Rs. 5 crores to the corpus of the assessee out of sports department's budget to augment of the corpus of the assessee to ensure the smooth functioning of the activities. He submits that in view of the provisions u/s 2(15) and 2(24)(iia) of the Income Tax Act, 1961 (in short the 'Act') such donations are capital in nature and are not to be treated as revenue receipt. Likewise he submitted that the disallowance of the depreciation is also not tenable inasmuch as the vesting of ownership in the building in the assessee shall not be treated as subsidy. So also he submits that the Ld. AO placing reliance on Bangalore Club, 350 ITR 509 is also misplaced.

4. Ld. AR further submitted that out of the total demand of Rs. 2,39,34,444/-, the assessee had already paid a sum of Rs.

47,86,888/-, and such payment constitutes about 20% of the total demand.

5. Ld. DR submits that since the huge amount of Rs. 1,91,47,556/- is outstanding the assessee may be directed to deposit some more amounts as a condition precedent to grant stay of the demand.

6. We have gone through the record and are satisfied that there is prima facie case and balance of convenience in favour of the assessee. Further in view of the payment of Rs. 47.87 lakhs are roughly constitutes 20% of the demand, it cannot be said that there would be any undue hardship to either of the parties by grant of stay.

7. In the circumstances, we direct that let there be stay of enforcing the outstanding demand for a period of six months or the disposal of the appeal, whichever is earlier. However, the continuance of stay during this period shall be subject to the condition of the assessee not asking time on any date of hearing.

8. Fix the appeal for hearing on 26.07.2018. Since both the parties have taken note of next date of hearing in the open court. No separate notice needs be issued.

Order pronounced in the open court on 06.07.2018 Sd/- Sd/-

            (R.S. SYAL)                     (K. N. CHARY)
          VICE PRESIDENT                  JUDICIAL MEMBER
Dated: 06.07.2018
*Kavita Arora
                                        4
                                                          Stay No. 479/Del/2018




Copy forwarded to:
1.  Appellant
2.  Respondent
3.  CIT
4.  CIT(Appeals)
5.  DR: ITAT
                      TRUE COPY

                                                ASSISTANT REGISTRAR
                                                     ITAT NEW DELHI

              Date of dictation                                  06.07.2018
              Date on which the typed draft is placed before     06.07.2018
              the dictating Member

Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the 06.7.18 Sr. PS/PS Date on which the fair order is placed before 06.7.18 the Dictating Member for pronouncement Date on which the fair order comes back to the 06.7.18 Sr. PS/PS Date on which the final order is uploaded on the 06.7.18 website of ITAT Date on which the file goes to the Bench Clerk 06.07.18 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order