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10. The Ld.CIT(A) had also upheld the findings of the AO in denial of exemption u/s.11 of the Act, on the ground that once the Trust violates provisions of Sec.13(1)(c) of the Act, then, the benefit of exemption ITA Nos.1632 to 1638/Chny/2023 :: 11 ::
u/s.11 of the Act, cannot be allowed. The Ld.CIT(A) discussed the issue at length in light of discussion of the ITAT in the assessee own case along with certain judicial precedents and held that although, the ITAT has held that the objects of the Trust are charitable in nature and further, running of Kalyanamandapam is incidental to the attainment of main objects and is covered by u/s.11(4) of the Act, but facts are that the Trust violates provisions of Sec.13(1)(c) of the Act, and thus, the benefit of exemption u/s.11 of the Act, cannot be allowed. Therefore, the CIT(A) upheld the findings of the Assessing Officer for denial of exemption u/s.11 of the Act. The Ld.CIT(A) had also upheld the additions made by the AO towards difference in rental income received by the assessee Trust from the partnership firm, M/s.CFD, and rental income received by M/s.CFD, from three tenants on the ground that the facts gathered during the course of survey clearly shows that the assessee has under stated rental income towards letting out of properties and thus, the AO has rightly made additions towards difference between rental income in the hands of the assessee as its income. The Ld.CIT(A) has also upheld additions made by the AO towards disallowance of depreciation on fixed assets on the ground that the income of AOP which is not eligible for exemption u/s.11 of the Act, should be computed under normal commercial accounting principles, and thus, once the cost of asset has been allowed as deduction in the year in which such asset was purchased, depreciation on said assets, cannot be allowed as deduction and thus, rejected arguments of ITA Nos.1632 to 1638/Chny/2023 :: 12 ::

ITA Nos.1632 to 1638/Chny/2023 :: 22 ::

19. The Ld.Counsel for the assessee submitted that the main object of the assessee as contained in its Memorandum of Association indicating carrying out activity of promote any object which was only charitable in nature apart from doing medical relief. The Ld.Counsel for the assessee referring to the objects of the Trust argued that the main objects of the Trust are to provide relief to the poor and medical relief. As per its objects, the assessee Trust is carrying out charitable activities and in the process running Kalyanamandapam which is incidental to the attainment of main objects and is covered by Sec.11(4) of the Act. The Ld.Counsel for the assessee further submitted that this issue is squarely covered in favour of the assessee by the decision of ITAT in assessee own case for AYs 1997-98 to 2014-15, where, the Tribunal after considering the main objects of the Trust, the activities carried out for relevant assessment years and also income derived from running Kalyanamandapam held that the activity of running Kalyanamandapam is only incidental to the attainment of main objects and thus, the assessee could take advantage of sub-section (4) of sec.11 of the Act. The facts for the impugned assessment year are identical and there is no change in facts, except the AO making allegation that there is a violation of provisions of Sec.13(1)(c) of the Act, in so far as let out of properties to a partnership firm, in which, the trustees are partners. Therefore, he submitted that the AO and the Ld.CIT(A) are erred in denying exemption u/s.11 of the ITA Nos.1632 to 1638/Chny/2023 :: 23 ::
activities carried for these assessment years, there is no dispute that the assessee Trust has carried out its activities in accordance with the objects and the objects of the Trust are charitable in nature and more particularly in the field of medical relief. Further, this issue has already been settled by the Coordinate bench in assessee own case in the earlier round of litigation in ITA No.277 to 286/Chny/2018 order dated 02-01-2019. The ITAT after considering the main objects of the Trust, the activities carried out for relevant assessment year and also the income derived from running of Kalyanamandapam has held that the activity of running Kalyanamandapam is property held under Trust and rental income received by the assessee from Kalyanamandapam that which was in the nature of income from business, but such income was derived from property held under Trust. The Tribunal further held that such business of running a Kalyanamandapam is incidental to attainment of main objects and the assessee Trust can take advantage of sub-section (4) to sec.11 of the Act. The Tribunal further held that the audited accounts filed along with its return clearly shows separate income and expenditure for each of the activities including Kalyanamandapam and thus, sub-sec 4A is not applicable to the assessee once its business is considered as incidental to the attainment of its main objects. The relevant findings of the Tribunal are as under: