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2020 (8) TMI 600 - GUJARAT HIGH COURTDisallowance u/s 36(1) (vii) - contribution to the pension Fund - AO observed that the assesse had not furnished the working of its claim as per the conditions laid down thus 25% of the amount claimed was allowed and 75% of the claim was disallowed - CIT(A) considering that the Gujarat Maritime Board Employees Pension Trust Fund was duly approved by the CIT, Gandhinagar with effect from 28.03.2003 and the contribution was paid in compliance of the terms of the appointment on the respective erstwhile state government employees in the earlier year, which was constantly allowed by the department - Tribunal affirmed the view of the CIT (A) - HELD THAT:- The issue relating to the contribution to pension fund under Section 36(1)(iv) of the Income Tax Act read with Rule 87 and 88 of the Income Tax Rules would not constitute a question of law and would be in the realm of factual issue. The ITAT has observed in its order that no evidence was led by the Revenue-Appellant to dispute the correctness of the findings recorded by the CIT (Appeals). Depreciation of assets which were allowed as application of income - HELD THAT:- It is pertinent to note that the aforesaid issue is covered against the Revenue in terms of the judgment of the Apex Court RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION POONA [ 2017 (12) TMI 1067 - SUPREME COURT] - The order of the ITAT discusses, after relying on the Judgment of the Apex Court in the Rajasthani and Gujarati Charitable Foundation (supra) that the income of the trust is required to be computed u/s. 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from the gross income of the trust. Exemption u/s 11 - denying the benefits of Sections 11 and 12 by invoking proviso to Section 2(15) r.w. Section 13(8) - Claim of benefit u/s 2(15) - HELD THAT:- ITAT has clearly observed that the activities carried out by the Assessee are for the advancement of any other object of general public utility without any intention of making profit after considering the provisions of the Gujarat Maritime Board Act, 1981 and the facts of the case. Therefore, it cannot be said that the activities carried out by the Assessee are in the nature of trade, commerce or business. Decisions of this court in the case of CIT v. Gujarat Industrial Development Corporation (GIDC) 2017 (7) TMI 811 - GUJARAT HIGH COURT and Ahmedabad Urban Development Authority (AUDA) 2017 (5) TMI 1468 - GUJARAT HIGH COURT squarely cover the present issue in favour of the Assessee since the fees collected by the Assessee is incidental to the object and purpose of attainment of the main object for the development of minor ports in the State of Gujarat. This Court has held in the case of AUDA 2017 (5) TMI 1468 - GUJARAT HIGH COURT that merely because the AUDA is charging fees and/or cess, the activities cannot be said to be in the nature of trade, commerce or business. In the case of GIDC (supra), this Court has clearly held that the charitable activities also require operational / running expenses as well as capital expenses to be able to sustain and continue in the long run. Therefore, the ITAT has rightly found that the activity of the assesse is for the advancement of any other object of general public utility and is not hit by the provisio to section 2(15) of the Act, and therefore, the Assessee is entitled to exemption u/s. 11 of the Act. - Decided in favour of assessee.
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