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2019 (11) TMI 924 - AT - Income TaxBenefit of exemptions u/s.11 - Charitable purpose u/s 2(15) - planned development in a particular region - whether the activity of the assessee company is in the nature of ‘advancement of any other object of general public utility’? - whether the nature of activity is commercial and akin to ‘trade, commerce or business’ etc.? - HELD THAT:- The object of the assessee authority is to engage in advancing of objects of public utility is not in dispute. The dispute relates to the second limb i.e. whether such object of advancement of general public utility also acquires the character of trade, commerce or business with commercial intent or whether the authority exists solely for advancement of object of public utility and do not exist with a motive to make profit in a commercial spirit. As observed, the assessee is a Government agency and is engaged in co-ordinate and planned development of Jamnagar region which is pre-dominant object of the authority. The authority has been granted registration under s.12A of the Act for claiming deduction/exemption under s.11 of the Act. On similar facts, the in Ahmedabad Urban Development Authority vs. ACIT [2017 (5) TMI 1468 - GUJARAT HIGH COURT] held that general public utility services and amenities provided by such authorities would fall within the meaning of ‘charitable purposes’ as contemplated under s.2(15) of the Act and consequently, the assessee is entitled to claim exemption of income under s.11 of the Act. The issue has already been adjudicated in favour of the assessee in other assessment years by the co-ordinate bench as noted above. We thus see no error in the conclusion drawn by the CIT(A) in favour of the assessee. Once the activity is considered to be charitable in nature, the assessee would be entitled to all consequential benefits flowing to income generated from such activity including the benefits provided under s.11(2) of the Act and 11(1)(a) of the Act towards accumulation of profits without any demur.
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