Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 957 - AT - Income TaxCharitable purpose - Incidental receipts on account of “cost of application fees and scheme brochure” in the nature of trade or commerce - Addition to income - assessee is a National Horticulture Board set up by the Government of India in 1984 as an autonomous society under the Societies Registration Act 1860 - Held that:- The authorities below were clearly in error in invoking first proviso to Section 2(15), particularly as it has not even been their case that the assessee was carrying out any business activity in charging the processing fees or service fees, even if receipts on account of application forms can be construed as such, from the applicants for the subsidy. The mere fact that service charges have been received by the assessee donot vitiate the charitable nature of assessee’s activities and, as observed by Hon’ble Delhi High Court in the case of GS 1 (2013 (10) TMI 19 - DELHI HIGH COURT), that “a small contribution by way of fee that the beneficiary pays would not convert charitable activity into business, commerce or trade in the absence of contrary evidence” and that “quantum of fee charged, economic status of the beneficiaries who pay, commercial value of benefits in comparison to the fee, purpose and object behind the fee etc. are several factors which will decide the seminal question, is it business”. There is nothing on the record to even suggest that the fees charged by the assessee is such that it suggests that it is in nature of a business, nor is it even the case of the Assessing Officer. It was, therefore, not a fit case for holding that merely because the assessee has charged a fees, even if that be so, for processing the subsidy applications, the assessee’s activities cease to be charitable activities under section 2(15). The Assessing Officer is, accordingly, directed to delete the impugned addition of ₹ 2,20,57,530. The assessee gets the relief accordingly. - Decided in favour of assessee.
|