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2019 (4) TMI 662 - ITAT MUMBAIExemption u/s 11 - charitable activity u/s 2(15) - main object of assessee trust - HELD THAT:- The Trust is sponsored and the nature of activities of the trust is to provide credit insurance cover to Indian Exporters keeping in view of the national interest. The Trust is sponsored by Govt. of India with the objective to promote exports, improve competitiveness of Indian exports and to implement schemes formulated by the Govt. of India for the benefits of medium and long term exporters in national interest. Certainly, none of the above objectives are tainted with motive of trade, commerce or business as Govt. of India is not into business of providing Credit Insurance. Wherever, it has intended to do so, it has been done through Corporate structure e.g. ECGC of India Ltd. (Export Credit Guarantee Corporation) which does the credit insurance activity on commercial basis with Govt. of India as the sole shareholder with a premium and other income of ₹ 1020 crores (appx) and a net surplus of ₹ 171 (approx) for FY 2012-13. On the basis of the above, NEIA’s activity cannot and should not be considered to be in nature of trade, commerce or business. Since the dominant and prime object of the assessee is not to earn the profit in relation to trade, commerce and business, therefore, the exemption u/s.11 & 12 is not liable to be declined. Accordingly, we set aside the finding of the CIT(A) in this issue and allowed the claim of the assessee. Corpus donations - disallowance in sum of ₹ 190 crores received during the year from Central Government of India accounted as Corpus Contribution - HELD THAT:- Relying on decision in CREDIT GUARANTEE FUND TRUST FOR MICRO AND SMALL ENTERPRISES VERSUS ITO-1 (1) , (EXEMPTIONS) , MUMBAI [2018 (2) TMI 1875 - ITAT MUMBAI] mere action of charging fee for services, by itself, would not justify invoking of the proviso to section 2(15) unless it is established that the purpose and object is profit motive. Considering the entirety of circumstances we are unable to find any credible reasoning taken by the Revenue to say that the purpose and object of the assessee Trust falls within the meaning of expression ‘trade, commerce or business’ used in the proviso to section 2(15) - the assessee Trust has been settled by the Government of India and SIDBI. The trust deed brings out the objects and purpose for which the assessee Trust has been set up, namely, to mitigate the difficulties faced by the small scale industries and micro enterprises in availing credit facilities from various lending institutions. It is also to be noted that the object and purpose of the Trust is focussed on small scale industries and micro enterprises and is not available to entrepreneurs at large. Apart there-from, it is also prescribed in the scheme operationalized by the Trust that the benefits are to be made available only to credit facilities aggregating upto ₹ 10.00 lacs sanctioned and disbursed by the lending institutions. Therefore, it could not be inferred that there is any profit motive so as to view the activities to be ‘trade, commerce or business’ as understood for the purposes of proviso to section 2(15) - it is not possible to infer that assessee Trust is carrying on any regular ‘trade, commerce or business’ and on the contrary it is an entity which is essentially existing for charitable purposes but conducting some activities for consideration or fee. - Decided in favour of assessee.
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