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2020 (1) TMI 1149 - HC - Income TaxExemption u/s 11 - application of income for any purpose other than the object of the Trust - HELD THAT:- In the present case, Tribunal held that object of the assessee is undoubtedly promotion of sports, games and providing recreation facilities to the public at large and to the members in particular and therefore receipts on account of compensation from decorator against gymkhana function, miscellaneous income and compensation from caterer (restaurant) cannot be construed as activities in the nature of trade, commerce or business for the purpose of the proviso to Section 2(15) of the Act. This court in the case of Director of Income Tax (Exemptions) Vs. Shri Vile Parle Kelavani Mandal,[2015 (5) TMI 220 - BOMBAY HIGH COURT] has held that educational institutions require funds; activity of letting out of halls for marriages, sale and advertisement rights is not a regular activity undertaken as part of business. Income is generated by giving various halls and properties of the institution on rental basis on holidays when those are not required for educational activities. Therefore, such activities cannot be construed to be business activities, such activity being an incidental activity; and thus income generated therefrom cannot be brought to tax. This court in Shree Nahsik Panchvati Panjrapole [2017 (3) TMI 1262 - BOMBAY HIGH COURT] emphasized that the test that should be applied whether it was income earned from business or income earned from incidental activity is the test of dominant object of the trust i.e., what is the dominant object of the activity. If the dominant object of the activity is profit making, the purpose would not be charitable but if the dominant object of the activity is charitable then notwithstanding making of profit, the charitable character of the purpose would not be lost. Depreciation to assessee trust - double deduction - HELD THAT:- Issue covered by the decision of the Supreme Court in Commissioner of Income Tax-III, Pune Vs. Rajasthan and Gujrat Charitable Foundation, Poona, [2017 (12) TMI 1067 - SUPREME COURT] whereby those questions have been answered in favour of the assessee and against the revenue.
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