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2020 (3) TMI 673 - AT - Income TaxExemption u/s 11 - CIT-A held that proceeds of kuri business in the case of the assessee substantially benefited the members or subscribers and the predominant object was to generate profit in the hands of subscribers - CIT(A) concluded that running a kuri business is not incidental to objectives of trust and Section 11 (4A) impose a bar on such business and income from Kuri business becomes taxable in the hands of the trust - HELD THAT:- Assessee-Trust will not be entitled to claim exemption u/s. 11 if it was found to have carried on business from which income was derived. Admittedly, the assessee in the present case is engaged in the activity of providing medical relief to the public. During the assessment year under consideration, the assessee earned income from kuri business to the tune of ₹ 12,28,637/-. This activity of kuri business cannot be considered as incidental to earning profits of the assessee. None of the primary objects of the assessee-Trust have nexus with the business activity of the assessee. Therefore, the assessee- Trust cannot claim exemption u/s. 11 of the I.T. Act as the activity of kuri business is not done in the course of carrying on the primary objects of the assessee-Trust. The activity carried on by the assessee-Trust in the form of kuri business is hit by the proviso to section 2(15) of the Act as mentioned in earlier para. We are in full agreement with the findings of the lower authorities that as the proviso to section 2(15) puts an embargo on carrying on business by the charitable Trust only if the business is incidental to the main and pre-dominant objects of the the assessee-Trust. AR placed reliance on the decision of the Cochin Bench of the ITAT in the case of Dharmodayam Co. [2002 (2) TMI 313 - ITAT COCHIN] which is misplaced because the decision pertains to cases prior to 1-4-1992 when section 11(4A) of the I.T. Act was not on statute. Section 2(15) was amended with effect from 1.4.2009 by Finance Act, 2008. - Decided against assessee.
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