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2018 (5) TMI 1775 - AT - Income TaxTDS u/s 194C - non-deduction of tax at source from the payment of printing charges by assessee trust - Held that:- Assessee in the present case is an association of paediatric doctors with the principal object of general public advancement. During the year under consideration, it had published journal from the funds received from sponsorship fees and the journals so published were issued to the members free of cost. As rightly contended on behalf of the assessee before the CIT(A) as well as before the Tribunal, the activity of publication of journal having been financed from the sponsorship fees and the said journals having been issued to the members free of cost, the same cannot be treated as in the nature trade, commerce or business as envisaged in the proviso to section 2(15) and the income of the assessee from the said activity cannot be treated as its business income. Therefore, find merit in the contention of assessee that the A.O. was not justified in reclassifying the income of the assessee from the activity of publication of journals as business income and in making a disallowance u/s 40(a)(ia). CIT(A) is also not justified in holding that the fact of the assessee being the charitable organisation is of no relevance for the applicability of section 40(a)(ia). Hon’ble Bombay High Court in the case of Bombay Stock Exchange vs DDIT [2014 (6) TMI 444 - BOMBAY HIGH COURT] held that where the income of the assessee was exempt under section 11 and the assessee was not carried on the business, section 40(a)(ia) had no application. Moreover, the insertion of Explanation 3 to Section 11 by the Finance Act, 2018 making inter alia the provisions of Section 40(a)(ia) applicable in case of charitable or religious trust or institution with effect from 1st April, 2019 further shows that section 40(a)(ia) hitherto was not applicable in computing income of entities registration u/s 12A of the Act. Disallowance made by the A.O. under section 40(a)(ia) and confirmed by the Ld. CIT(A) is not sustainable and deleting the same - Decided in favour of assessee
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