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2024 (2) TMI 922 - ITAT DELHIExemption u/s 11 - charitable purposes u/s 2(15) or not? - assessee is an authority constituted under the UP Urban Planning and Development Act, 1973 to promote and secure the development of areas according to plan HELD THAT:- As similar issue involved in has been decided in favour of the assessee by the Hon’ble Allahabad High Court [2022 (8) TMI 1400 - ALLAHABAD HIGH COURT] wherein held that for the applicability of proviso to Section 2(15), the activities of the trust should be carried out on commercial lines with intention to make profit. Where the trust is carrying out its activities on non-commercial lines with no motive to earn profits, for fulfillment of its aims and objectives, which are charitable in nature and in the process earn some profits, the same would not be hit by proviso to section 2(15). The aims and objects of the assessee-trust are admittedly charitable in nature. Mere selling some product at a profit will not ipso facto hit assessee by applying proviso to Section 2(15) and deny exemption available under Section 11. The intention of the trustees and the manner in which the activities of the charitable trust institution are undertaken are highly relevant to decide the issue of applicability of proviso to Section 2(15). There is no material/evidence brought on record by the revenue which may suggest that the assessee was conducting its affairs on commercial lines with motive to earn profit or has deviated from its objects as detailed in the trust deed of the assessee. In these facts and circumstances of the case, the proviso to Section 2(15) is not applicable to the facts and circumstances of the case, and the assessee was entitled to exemption provided under Section 11 for the relevant assessment year. From the record, it also appears that the "authority" had been maintaining infrastructure, development and reserve fund IDRF as per the notification dated 15th January, 1998, the money transferred to this funds is to be utilized for the purpose of project as specified by the committed having constituted by the State Government under the said notification and the same could not be treated to be belonging to the "authority" or the receipt of taxable nature in its hands. For this reason also, it appears that the funds are utilized for general utility." The findings and observations in the aforesaid judgment are squarely applicable in the case in hand also. Decided in favour of assessee. Treating the income/loss earmarked relating to infrastructure fund as taxable - By respectfully following the orders of the Hon’ble High Court own case [2022 (8) TMI 1400 - ALLAHABAD HIGH COURT] the Tribunal in Assessee’s own case [2021 (9) TMI 698 - ITAT DELHI] we remand the matter to the file of the AO to decide the issue afresh keeping the ratio laid down in Saharanpur Development Authorities [2021 (3) TMI 1223 - ITAT DELHI] and Khurja Development Authoritie [2019 (4) TMI 361 - ITAT DELHI] with a view that source of funds transferred to Infrastructure Development Fund, control over the same and obligation of its utilization is required to be examined to ascertain the real nature of Infrastructure Development Fund. Accordingly, direct the Assessing Officer to adjudicate the issue afresh.
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