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2023 (8) TMI 1107 - AT - Income TaxExemption u/s 11 - letting of “Dharmashala” for commercial activities by the assessee - HELD THAT:- Assessee had garnered a substantial amount by commercially exploiting the “Dharmashala” for multi-facet purposes by giving diversified nomenclature to the receipts, i.e., booking/cancellation charges, repairing and maintenance expenses, cleaning charges, receipts towards fines imposed, electricity charges, etc., which as claimed by the AR was on a cost basis or nominally above cost because after being set off against the actual expenditure/notional expenditure in the profit and loss account, the assessee trust was left with a minuscule surplus We cannot find favor with the said claim. Nothing is discernible, much less evidenced based on supporting material which would reveal that the booking/ancillary receipts collected by the assessee from the aforesaid commercial activities were nominally above cost. On the contrary, if the notional expenditure of depreciation is ignored, then the fact that the assessee was carrying out purely commercial activities is proved to the hilt. Also, drawing support from the judgment of Ahmedabad Urban Development Authority [2022 (10) TMI 948 - SUPREME COURT] letting of “Dharmashala” for commercial activities by the assessee as observe that as the letting of “Dharmashala” for commercial activities by the assessee, as claimed by the AR was its lifeblood for sustaining its activities of running the “Dharmashala,” but the same being in the nature of business or services in relation to a business, for cess or fee/charges; therefore, the receipts garnered from such activities would be hit by Section 2(15) of the Act. Thus lower authorities who had rightly declined the assessee’s claim for exemption u/s. 11 - Decided against assessee.
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