Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (12) TMI 211 - DELHI HIGH COURTExemption u/s 11 of the Act - whether business activities carried on by the assessee were incidental to the main aims and objects of the Trust which are of Charitable nature or not - In the present case business in Katha was carried on by the trustees or the Board of Directors and not by the beneficiaries of the trust - held that:- If a property is held under trust, and such property is a business, the case would fall under Section 11(4) and not under Section 11(4A) of the Act. Section 11(4A) of the Act, would apply only to a case where the business is not held under trust. - we are unable to accept the contention urged on behalf of the revenue before us that the provisions of Section 11(4A) are sweeping and would also take in a case of business held under trust. The mere fact that whole or some part of the income from Katha business is ear-marked for application to the charitable objects would not render the business itself being considered as incidental to the attainment of the objects. We are in agreement with the view taken by the CIT (Appeals) in his order for the assessment year 1992-93 that the application of the income generated by the business is not the relevant consideration and what is relevant is whether the activity is so inextricably connected or linked with the objects of the trust that it could be considered as incidental to those objectives. It was contended on behalf of the assessee that the mere letting out of the factory on lease w. e. f. 01.01.1992 does not amount to carrying on of any business. We are unable to accept this contention. Decision in the case of Thanthi Trust [2001 (1) TMI 80 - SUPREME COURT] distinguished - the observations of the Supreme Court must be understood and appreciated in the background of the facts in that case and should not be extended indiscriminately to all cases. It was contended on behalf of the assessee that in case we hold that the assessee-trust is not eligible for exemption because the Katha business was itself not held under trust, it would produce an anomalous or discriminatory result inasmuch as all that is required is for the settler of the trust to declare that the Katha business itself would be held in trust. It is not for us to comment on the contention; we cannot question the legislative wisdom and if there is really an anomalous or discriminatory resultant position, it is for the legislature to take care of it. It is not for us to enter "such a complex arena in which no perfect alternatives exist" All the appeals decided against the assessee and in favour of the Revenue.
|