1964 (10) TMI 19 - SC - Income Tax

Whether the income from property owned by the assessee is exempt under section 4(3)(i) for the aforesaid six years of assessment ?

Whether the activities of the assessee amount to a trade or business, the profit or loss from which is assessable under section 10 ?

Held that:- It is true that in this case there is in fact no trust in respect of the income derived from the building owned by the assessee. But the property and the income therefrom is held under a legal obligation, for, by the terms of the permission granted by the Government to the assessee to exclude from its name the use of the word " limited ", and by the express terms of clause 4 of the memorandum of association, the property and its income are liable to be utilised solely for the purposes set out in the memorandum of association.

In the present case the primary purpose of the assessee was not to urge or oppose legislative and other measures affecting trade, commerce or manufactures. The primary purpose of the assessee is, as we have already observed, to promote and protect trade, commerce and industries, to aid, stimulate and promote the development of trade, commerce and industries and to watch over and protect the general commercial interest of India or any part thereof. It is only for the purpose of securing these primary aims that it was one of the objects mentioned in the memorandum of association that the assessee may take steps to urge or oppose legislative or other measures affecting trade, commerce or manufactures. Such an object must be regarded as purely ancillary or subsidiary and not the primary object. Appeal dismissed.