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2011 (10) TMI 155 - AT - Income TaxCharitable object - activities of construction of houses, flats, shops etc. which are sold - AO observed that the activities are in the nature of carrying on of business. No charitable activity has been carried on by the assessee. - Held that:- The registration has not been cancelled till date. In other words, the registration is effective for this year. The grant of registration is not an empty formality as it has to be granted after satisfying that the objects are charitable in nature. Since the registration has effect for this year also, the object of the development authority will have to be taken as charitable in nature. - assessee has carried on systematic activities in a regular manner for construction of immovable properties as per plan, which have led to profit, and such activity is incidental to the main object of town planning, therefore, it is clear that the assessee has carried on a business which is incidental to attainment of objects of the authority. - Since there is no motive to make profit, the activity cannot be said to be a business activity. - matter restored to the AO to ascertain as to whether separate books have been maintained for construction business. If separate books have been maintained, deduction under sub-sections (1), (2), (3) and (3A) will be available to the assessee, otherwise not.
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