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2012 (11) TMI 429 - HC - Income TaxCharitable purpose u/s 2(15) - Income from property held for charitable or religious purposes - whether the provisions of Section 11(4A) were attracted to the assessee’s case - whether by rendering specific services to members and non-members for a fee, a trade, professional or similar association can be said to be carrying on a business activity? Held that:- A survey of the decided cases shows that trade and professional associations have been held entitled to the exemption under Section 11. An association of businessmen who sold goods on hire purchase Add. CIT vs. South India Hire Purchase Association (1978 (2) TMI 59 - MADRAS HIGH COURT), an association of traders dealing in photographic and connected trades Commissioner of Income-tax v. South Indian Photographic and Allied Trades Assn ( 1983 (7) TMI 3 - MADRAS HIGH COURT) and an association consisting of Kirana Merchants Madras Kirana Merchants Association v. CIT, (1976 (8) TMI 29 - MADRAS HIGH COURT) were held by the Madras High Court to be eligible for the exemption under Section 11 notwithstanding that some of the associations charged their members fees for specific services rendered. It is not proper to characterise the activities of the chamber as activities amounting to a business in the generally understood sense of the word, the most important feature of business being profit motive. It has not been suggested by the income tax authorities that the activities carried out by the assessee chamber were propelled by any profit motive. In such circumstances, it is proper to view the activities as driven by a charitable motive in the sense in which a charitable purpose is defined in Section 2(15). In this view of the matter, the provisions of Section 11(4A) are not attracted to the present case and a remand to the AO for finding out whether the activities were incidental to the objectives of the trust and separate books of accounts were maintained for such business was unnecessary - in favour of the assessee.
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