Case Law Details
DCIT Vs Ernet India (ITAT Delhi)
The facts in brief are that assessee is an Autonomous Society under the Department of Information & Technology, Ministry of Communication & Information Technology, Government of India, which was established as a non-profitable organization. It was registered under Section 12A of the Act vide certificate / order dated 26.03.2004. The main object of the assessee was to run a nation-wide academic and research network, to undertake and promote R & D in the area of communication, develop policy options in the country for development of network infrastructure and to act as a research centre for technological and managerial resources in the area of computer network. The case was taken up for scrutiny and relying on the assessments made in earlier years, it was held that the appellant’s transactions are in the nature of business or commerce similar to private players in the market on the following grounds:
(i) the appellant has entered into memoranda of understanding with various subscribers for providing services in lieu of specified consideration;
(ii) the appellant charges professional fee for services rendered to government institutions, in relation to execution of their Network Research Projects, which has led to huge surplus;
(iii) the appellant is earning exceptionally high net profit from the ‘business’ of providing connectivity and research project services;
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