Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2010 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (10) TMI 1176 - HC - Income TaxExemption u/s 011 - income from the business undertaking - charitable or religious purpose - In present case, the assessee Trust holds the property in Trust. the commercial activity is being carried on by the assessee by using the building as marriage halls, auditoriums etc. The assessee has filed its returns claiming that the income derived therein is being used towards its objectives which are charitable in nature and filed its return claiming that the Income derived from the property held in Trust by the assessee is eligible for exemption u/s 011. However, the AO for the assessment has rejected the exemption sought for by the assessee by holding that in as much as the assessee was carrying on a commercial activity which is not incidental to the object of the Trust as required u/s 011, the exemption cannot be granted. It was also held that the assessee has not complied with the provisions contained u/s 011(4)(A) by not maintaining separate books of accounts in respect of its income assessable under the said business. HELD THAT:- The factual question of the actual income that is to be exempted has not been gone into by taking into consideration of the separate heads of accounts. A perusal of Section 011(4)(A) of the Act would clearly show that the said provision is an exception to Section 011(1), 011(2), 011(3) and 011(3)(A).Therefore, the assessee will have to satisfy the authorities that such an exemption is to be granted by providing substantial materials to show that income derived from the business has been utilised towards the fulfillment of the objectives of the trust. Equally a duty is cast upon the AO concerned to look into the records and give a factual finding, determining the actual income available for exemption. However in view of our reasoning that a business income if utilized towards the achievement of the object of the assesse trust the same would be incidental to the achievement of the object. Accordingly, the substantial questions of law raised are answered in favour of the revenue.
|