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2023 (4) TMI 32 - ITAT AHMEDABADExemption u/s 11 - Activities carried out by the assessee are in the nature of business and are governed by the provisions of section 11 (4) of the Act and the first and second proviso to section 2 (15) - HELD THAT:- As decided in assessee own case [2020 (7) TMI 272 - ITAT AHMEDABAD] the activities carried out by the assessee is for advancement of any other object of general public utility without any intention of the profit motive after considering the provision of the Gujarat Maritime Board Act, 1981 and fact of the case, it cannot be said that the activities carried out by the assessee are in the nature of trade commerce or business. It is observed that predominant object of the assessee is to administer control on miner ports in the State of Gujarat and there is no profit motive as demonstrated by the provision of section 73, 74 and 75 of the Gujarat Maritime Board Act, 1981. The Gujarat Maritime Board is under legal obligation to apply the income which arises directly and substantially from the business held under trust for the development of minor ports in the state of Gujarat. Further after following the decision of Hon'ble Gujarat High Court in the case of AUDA [2022 (10) TMI 948 - SUPREME COURT] and GIDC [2017 (7) TMI 811 - GUJARAT HIGH COURT], the fees collected by the assessee is incidental to the object and purpose of attainment of the main object for development of mining ports as enumerated in the provision of the Gujarat Maritime Board Act, 1981,therefore, we consider that activity of the assessee is for advancement of any other object of general public utility and not hit by the proviso to section 2(15) of the act, therefore, the assessee is entitled for exemption u/s. 11 - Appeal of the assessee is allowed. Assessee has violated section 11(2)(b) r.w.s. 11(5) - violation of provisions of section 11(5) of the Act on the ground that investments were made by the assessee in companies which were not “public sector companies” as defined in section 2(36A) - HELD THAT:- Only the relevant income falling within the mischief of section 13(1)(d) of the Act will lose the benefit of exemption under section 11 and 12 of the Act and the balance of the total income of the trust will remain eligible for the benefit of exemption under section 11 of the Act. In other words, violation of section 13(1)(d) cannot lead to denial of exemption under section 11 and 12 of the Act, to the total income of the trust. Addition of TDS being outrightly deducted from income available for application purposes - whether the amount deducted as TDS should also be considered for the purpose of application of income? - HELD THAT:- In the case of CIT v. Ganga Charity Trust Fund [1985 (10) TMI 67 - GUJARAT HIGH COURT] held that payment of income-tax by assessee, a charitable trust, was a charge on income or outgoing which ought to be deducted before determining surplus income for purpose of application under section 11(1)(a) of the Act. Again, in the case of CIT v. Jayashree Charity Trust [1984 (12) TMI 30 - CALCUTTA HIGH COURT] the High Court held that where net dividend received by assessee after deduction of tax at source was spent for charitable purposes, assessee was entitled to benefit of exemption on that portion of income which had been taken away by deduction of tax at source even though that amount had not been spent or accumulated for purposes of charity.
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