Income Tax Appellate Tribunal - Amritsar
M/S Acharya Shri Tulsi Kalyan Kendra, ... vs Assistant Commissioner Of Income Tax, ... on 28 February, 2017
ITA No.551/Asr./2016
IN THE INCOME-TAX APPELLATE TRIBUNAL,
(CIRCUIT BENCH AT JALANDHAR)
BEFORE : SHRI A.D. JAIN, JUDICIAL MEMBER AND
SHRI T.S. KAPOOR, ACCOUNTANT MEMBER
ITA No. 551(Asr.)/2016
Asst. Year: 2012-13
Acharya Shri Tulsi Kalyan Kendra, vs. A.C.I.T., Circle-II,
300, Chauri Sarak, Ludhiana. Ludhiana.
(PAN: AACTA0299B)
(Appellant) (Respondent)
Assessee by : Sh. Jasvinder Singh, Advocate
Revenue by : Smt. Balvinder Kaur, D.R.
Date of hearing : 24.01.2017
Date of pronouncement : 28.02.2017
ORDER
Per A.D. Jain, Judicial Member:
This is assessee's appeal for assessment year 2012-13 against the CIT(A)'s action in upholding the action of the AO in denying to the assessee depreciation and other expenses claimed against rental income from Dharamshala and taxing the rental income as 'income from house property', as against under the head 'income from other sources', as claimed.
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ITA No.551/Asr./2016
2. The facts are as follows.
3. The assessee-society is engaged in various charitable activities. In the return of income filed, the assessee declared loss of Rs.23,26,610/-. Vide order dated 24.03.2015 passed u/s. 143(3) of the Income-tax Act, the AO assessed the income of the assessee- society at Rs.4,17,820/-. The AO took the rental income declared by the assessee as 'income from house property' and taxed it after allowing mandatory deduction u/s. 24 of the Act, as the assessee- trust was not found to be registered u/s. 12/12AA of the Act.
4. The ld. CIT(A) confirmed the assessment order.
5. On behalf of the assessee, it has been, inter alia, stated that the activities of the assessee are meant for religious and charitable purposes, without any motive of earning profit; that the assessee had let out rooms and halls alongwith amenities such as air conditioners, bed sheets, blankets, bath towels, cleaning of rooms and toilets, electricity charges included, morning tea, etc., and that 2 ITA No.551/Asr./2016 these were let out on a daily basis and not on a permanent basis; and that the motive of the assessee is not to give its halls or rooms on rent to one person permanently, but to serve various people of the society, with its charitable services.
6. Having heard the parties and having perused the material on record, we find that the assessee, as noticed by the AO as well as ld. CIT(A), was engaged in the following activities :
a. Managing the homeopathy dispensary for the welfare of the general public.
b. Holding of blood donation camps to facilitate and help various hospitals in the availability of blood with them.
c. Holding of Yoga classes for children and elders.
d. Holding of various health care camps for general public.
e. The hall and rooms made by the society (Dharamshala) are given on rent to general public for holding of public gatherings and staying in the bhawan at normal rates.3
ITA No.551/Asr./2016
7. It remains undisputed that the rental income of the assessee is coming from its Dharamshala, the halls and rooms of which are given on rent on a daily basis, to the general public and not to regular tenants, for holding of public gatherings and staying, at nominal rates. It is also not under challenge that the assessee is incurring certain expenses on the maintenance of the Dharamshala/Bhawan, including electricity expenses, lift expenses (lift has been installed for use by the occupants of rooms on the third floor) and staff salaries for cleaning and maintaining the Dharamshala, which expenses are met out of the rent received. Medical dispensaries, Yoga Classes and blood donation camps are held for the general public. All these activities of the assessee fall under "object of general public utility" within the meaning of section 2(15) of the IT Act. Obviously, the first proviso to section 2(15) does not get attracted, since there is no profit motive involved, much less proved. Moreover, hotels and banquets operating with profit motive, as opposed to the assessee, are being assessed under the head of "business income" and are being allowed all expenses and depreciation out of their income. 4
ITA No.551/Asr./2016
8. For the above discussion, the grievance of the assessee is found to be justified. It is accepted. The rent received is directed to be assessed as 'income from other sources' and not as 'income from house property', as has been done. All expenses including depreciation are directed to be allowed.
9. In the result, the appeal is allowed.
Order pronounced in the open court on 28.02.2017.
Sd/- Sd/-
(T.S. KAPOOR) (A.D. JAIN)
Accountant Member Judicial member
Dated: 28.02.2017
*aks*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT Assistant Registrar
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