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2017 (2) TMI 496 - AT - Income TaxEntitlement for exemption u/s 11 - Held that:- The price of the goods is not fixed by the assessee at the time of its supply but it is fixed by the Govt. of A.P. depending on the expenditure incurred by the assessee and also its overhead which is also evident from the fact that the assessee suffered losses in certain years while it has excess of income over expenditure in certain other years. The excess of income over expenditure alone cannot be a determining factor as to the nature of the assessee’s activities. The exemption u/s 11 depends on the nature of the activities carried on by the assessee and not as to whether the assessee is making profit out of such activity. The establishment of factories for manufacturing of the food articles is also one of the ancillary activities of the assessee. Therefore, we agree with the finding of the CIT (A) that the assessee is an institution engaged in the activities for relief of the poor and therefore, whether it is making profit or otherwise becomes irrelevant while granting exemption u/s 11 of the Act. Further, the CIT (A) had also called for a remand report from the AO about the application of income and has observed that it has complied with the provisions of section 11(4a) of the Act. Therefore, we see no reason to interfere with the order of the CIT (A) for all the A.Ys. - Decided against revenue
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