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2015 (10) TMI 480 - AT - Income TaxEntitlement to exemption u/s 11 - assessee is a Karnataka Urban Water Supply and Drainage Board - Assessee explained that its main source of income was from ETP charges and Water Charges - Held that:- The principle laid down in the case of India Trade Promotion Organization Vs. DGIT(Exemption) and others [2015 (1) TMI 928 - DELHI HIGH COURT] if applied to the facts of the present case, will clearly show that the Assessee does not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility. The assessee is operating on no profit basis. This is substantiated by the actual income received on operations of the Assessee and the expenditure incurred set out in para-14 of this order. The income of the Assessee is primarily consists of Establishment, Administration and Supervision Charges, Water charges, interest, rent and other income (comprising of hire charges, fines, sale of scrap, tender forms etc.). If interest, rent and other income are excluded and compared with the expenditure on operations incurred by the Assessee, it becomes clear that the Assessee does not have profit motive. The proviso to Sec.2(15) of the Act is therefore not applicable to the case of the Assessee. We therefore hold that the Assessee is entitled to the benefits of Sec.11 of the Act for the impugned assessment years. The AO has not disputed the conditions necessary for allowing exemption u/s.11 of the Act, except the applicability of proviso to Sec.2(15) of the Act. In view of our conclusions that the said proviso is not applicable to the case of the Assessee, we hold that the Assessee’s income is not includible in the total income and therefore the income returned by the Assessee is directed to be accepted. - Decided in favour of assessee.
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