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2022 (8) TMI 241 - Income Tax
Revision u/s 263 - deduction /exemption u/s 10(24) by accepting the income /receipts of the assessee under the head ‘Income from other sources’ - HELD THAT:- It is an admitted fact that the assessee is a registered Trade Union of Film and Television Writers registered under the Trade Union Act, 1926. The assessee holds certificate of registration of Trade Union since 1960 earlier in the name of ‘Film Writer’s Association, Bombay’ subsequently was re-named as ‘Screen Writer’s Association’. The terms of constitution of Association contains various clause which on perusal does not appear to us to have any business activity. It is trite to reproduce the aims and objectives of the association for better understanding of the functions of the association.
PCIT said that “Any receipt which is a direct consequence of its core activities will always form part of income from business and profession, irrespective of whatever name is lent to the receipt” does not hold good and is according to our considered opinion a mere conjecture and surmises. The receipts of the assessee under various heads are those collected from its members namely Life Member, Regular Member, Associate Member and fellow Member. As admittedly accepted that such association requires fund for the purpose of carrying out its activities and such funds can be raised by charging its member various fees such as admission fees, admission form fee, confederation fees, constitution book fees, ID card fees, Life membership fee, registration fee, etc. This undoubtedly will not fall under the category of business activity as there are no profit motive in such association.
Assessee is not a business entity and does not work for profit. It is an association for the welfare of certain category of persons who writes in the film industry and other audio visual media and its objective is to protect the interest of its members though there is income generated not for profit but for the purpose of the welfare of the association and its members. PCIT has failed to establish that it is a business entity and hence the order of the PCIT is directed to be quashed, thereby allowing the claim of deduction /exemption made by the assessee u/s 10(24) - Decided in favour of assessee.