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2017 (4) TMI 1101 - AT - Income TaxDenied exemption claimed u/s.11 - whether activities of the assessee society could be classified as one of general public utility or as religious - Held that:- It is interesting to note the argument advanced by the assessee as to why it was distributing books other than religious ones. As per the assessee such books were displayed so as to attract general public to the Christian religious books. It is not disputed by either party that major receipts of the assessee came from distribution of Christian religious books, though this was supplemented by realizations from sale of other books. In my opinion sale of other books in the nature of dictionaries, history, social science, literature etc can only be considered as incidental to its major activity which was publishing and distributing religious books and tracts. Such incidental activity alone, in my opinion cannot jacket the assessee as one pursuing an object, different from distribution of religious books. Thus, the claim of the assessee that it’s main activity was confined to object clauses (b) and (c), in my opinion carries much strength. Object clause (d) onwards can be considered only as incidental to clause (b) and (c). Whether publication and distribution of religious books can be considered a religious activity? - Held that:- In my opinion assessee which was pursuing printing, publishing and distribution of Christian literature and tracts as its main activity, could be considered only as a religious one. In my opinion lower authorities fell in error by applying section 2(15) to it, when said Section has no applicability on religious institutions. In respect of Cochin branch, there was a suit filed by the assessee against its Manager who claimed ownership to the said branch. As for the Trivandrum branch, assessee had entrusted its operation to CSI Diocese of South Kerala through an MOU dated 01.04.2004. It has also not been disputed by the Revenue that the said branch was running in a loss. In any case accounts of these branches were not incorporated since 31.03.2005 and the position continued so since many years. In other words, Revenue had accepted the factual position with regard to these branches in the earlier years and the claim for exemption u/s.11 of the Act was granted to the assessee in such earlier despite similar comments in the audit report. In any case non incorporation of the accounts of the branches was not due to any fault of the assessee but due to factors beyond its control. Claim of depreciation - Held that:- Assessee can take advantage of judgments which went in its favour. Claim of depreciation has to be allowed. In the result, set aside the orders of the lower authorities and direct that the assessee be granted exemption claimed by it u/s.11 of the Act and also allowed depreciation. - Decided in favour of assessee
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