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2017 (1) TMI 887 - AT - Income TaxExemption U/s 11 and 12 - non charitable activities - receipt of rent as hit by the amended provisions of Section 13(8) r.w. 1st and 2nd proviso of Section 2(15) - Held that:- As decided in assessee’s own case for the A.Y. 2010-11 as held by the Apex Court in the case of Surat Arts Silk (1979 (11) TMI 1 - SUPREME Court) what is important in the case of trust or institution is the primary or dominant purpose. If the dominant purpose is charitable, another object which by itself may not be charitable, would not prevent the trust or institution from being a valid charity. It is noted in this case that the charges for the room are very nominal. This also indicates that there is no profit motive involved in this case. Thus it is apparent that the dominant motive in this case is not earning profit but to do charity in the form of public service by providing accommodation to the common man at affordable rates. The activities of the assessee, therefore, cannot be characterized as business activities. Hence, proviso to section 2(15) is not attracted in this case and, therefore, the disallowance of exemption u/s 11 & 12 is unjustified. The AO is, accordingly, directed to assess the society as per the provisions of section 11 & 12, and grant the requisite exemption. - Decided in favour of assessee.
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