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2012 (12) TMI 376 - AT - Income TaxExemption u/s 10(23C) - assessee is a registered society formed by Govt. of Madhya Pradesh for promotion and development of open school system in the State - As per audited accounts, assessee showed gross receipt of Rs. 14,34,36,039/- resulting into surplus income of Rs. 3,65,49,479/-. AO found that assessee did not file return of income for the A.Y. 2006-07, therefore, notice u/s 148 was issued. Held that:- Huge surplus has been generated by the assessee, therefore, it can be said that the profit motive of the assessee is clearly established. During hearing, the ld. Counsel for the assessee contended that the word "substantially" will be made even if the grants are 10%. We are not agreeing with this proposition because the word is "wholly or substantially", meaning thereby, either it can be 100% or near to 100% but in any case may not be less than 75% because it has been used with the word wholly and not singularly. Admittedly, there is no clear cut formula regarding per centage in the Act but some figure may be adopted under the facts and circumstances available on record. Assessee has not complied with two essential conditions as stipulated in the Act, therefore, we find no infirmity in the conclusion drawn in the impugned order. It is upheld. Finally, all these appeals are dismissed.
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