Case Law Details
Brief Facts of the Case and Question
Brief Facts: The assessee had filed its return of income on 29-9-2009 declaring Nil income for AY 2009-10. The AO completed the assessment u/s 143(3) after examining the details and explanations and the books of accounts at Nil income. Subsequently, ld. Director of Income-tax (Exemptions) (“DIT(E)”, examined the records and noticed that as per income and expenditure account, total income of the assessee had been shown at Rs. 2640.96 lakhs.
Out of this, Rs. 783.18 lakh had been considered for computation of income for charitable activity u/s 10(23C)(iv) and remaining amount had been claimed exempt on the principle of mutuality. Ld. DIT(E) examined the accumulation chart and income and expenditure account and concluded that major activities of the assessee revolved around accommodation and catering facilities and these activities were not on no-profit/loss basis, since there was continuous surplus being reflected in the account for many previous years.
The assessee society in its audit report in form no. 10BB had shown only part of its income and expenditure attributable to activities in terms of section 10(23C)(iv), whereas the total income/expenditure/ surplus etc. as per the Income & Expenditure a/c of the assessee for the current assessment year were Rs. 2640.96 lacs/ 2348.19 lacs/ Rs. 292.17 lacs respectively.
Question Raised:
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