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2018 (7) TMI 1478 - AT - Income TaxClaim of exemption u/s 11/12 denied - whether the assessee is a ‘charitable organization’ and proviso to section 2(15) do not apply? - whether the sponsorship contract with Samsung India Electronics Pvt. Ltd constitutes carrying on of any activity in the nature of trade, commerce or business? - Held that:- The advancement of any object of benefit to the public or a section of the public as distinguished from individual and group of individuals would be a charitable purpose. An object of public utility need not be an object in which the whole of the public is interested. It is sufficient if well defined section of the public benefits by the objects which means that the expression “object of general public utility” is not restricted to objects beneficial to the whole mankind. An object beneficial to a section of the public is an object of general public utility After considering all and also drawing support from the speech of the Finance Minister and subsequent clarification issued by the CBDT within the framework of amended provisions of section 2(15) of the Act, in our considered opinion, there was no material which may suggest that the assessee association was conducting its affairs solely on commercial lines with the motive to earn profit. There is also no material which could suggest that the assessee association has deviated from its objects which it has been pursuing since past many decades. In our humble opinion and understanding of law, proviso to section 2(15) of the Act is not applicable to the facts of the case and the assessee-association deserves benefit u/s 11/12 of the Act. No reason to interfere with the findings of the first appellate authority. Ground No. 1 is accordingly dismissed. Allowance of depreciation - Held that:- This issue is now well settled in favour of the assessee and against the Revenue as relying on the case of Rajasthan and Gujarat Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] as held that even though the expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes u/s 11A(1) of the Act, yet depreciation would be allowed on assets so purchased. Ground No. 2 is, accordingly, dismissed.
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