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2022 (2) TMI 1362 - AT - Income TaxDenying of exemption u/s 11 - non charitable activity - AO held that the actual activities carried out by the assessee are in the nature of pure commercial activity carried out by any Contractor and work/activity carried out by the assessee during the entire year can only be described as carrying out Civil Construction Work - HELD THAT:- As 'incidental' is an offshoot of the 'main activities', inherent bye-product of pre-dominant activities. The activities complementing the main activities are not in the nature of incidental to the business. It is incidental if it is supporting the activities to the main activities. The Tribunal held that the activities carried on by the assessee is itself principal activities and not incidental activities. Hence, it is not possible to hold that the construction activities carried out by the assessee is not protected by the provisions of section 11(4A), there is no merit in the argument of the assessee. As contended by the assessee that the surplus funds generated from the construction business was spent towards charitable activities and therefore, the assessee is entitled for exemption under section 11(4) is not acceptable. Initially, the assessee carried on the business itself which is not at all property held under trust. This activity is a business activity and the provisions of section 11(4A) is applicable. The tribunal held that there is no nexus between the activities carried on and the objects of the assessee that can constitute an activity incidental to the attainment of the objects, namely, to promote cause of charity, mission activities, welfare, employment, diffusion of useful knowledge, upliftment and education and to create an awareness of self reliance among the members of the public etc. Being so, the assessee is not entitled for any exemption under section 11. We have examined the facts of the assessee’s case and find that the same is identical to the case decided by the ITAT, Cochin Bench [2018 (11) TMI 117 - ITAT COCHIN] The ratio laid down in the aforesaid case therefore is squarely applicable to the facts of the assessee’s case. Decided against assessee.
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