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2016 (8) TMI 1445 - AT - Income TaxExemption u/s 11 - charitable activity u/s 2(15) - CIT(Appeals) held that the activities undertaken by the assessee trust are for the fulfillment of the charitable objects on non-commercial lines and are not hit by the provisions of section 2(15) - HELD THAT:- Assessee is procuring raw material from African countries and distributing the same to its members as well as other concerns which has similar nature of business as those of the members of the assessee society. Further from the objects of the assessee society, it is evident that such trading activity indulged by the assessee society is not mentioned in the objects of the assessee society - the activity of the assessee society viz., procuring raw materials from abroad and distributing the same will amount to pure commercial transaction because it is purely a trading activity generating substantial profits. There is no element of charity in this kind of activity indulged by the assessee society. It is not a case where the assessee had imported raw materials and distributed the same amongst its members and other commercial entities having same kind of business on cost to cost basis. The activity carried out by the assessee at the most benefit the members of the assessee society and certain commercial entities having same kind of business as that of the members of the assessee society and the public who purchases the produce of these entities. Hence this venture of the assessee society cannot be inferred beyond the scope of “Advancement of any other object of general public utility”. Therefore, relying in the decision cited by the learned assessing officer we are of the considered view that the proviso to section 2(15) of the Act would be applicable in the case of the assessee and accordingly, the surplus earned by the assessee deserves to be brought under the ambit of tax. - Decided in favour of revenue
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