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1995 (2) TMI 112

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....ssessee derives income from rent including the rent from hiring of auditorium and also furniture and fixture. The AO treated the income from hire charges of auditorium and furniture as income from business and by applying the provisions of section 11(4A), he denied the exemption u/s 11 to the assessee. 3. The CIT(A) also upheld the order of the AO. Hence, these appeals by the assessee before us. At the time of hearing before us, the ld. counsel for the assessee has submitted that the assessee is a charitable trust. It, apart from other properties, owns an auditorium. The auditorium and other facilities, namely, furniture and fixture are hired out to general public. The hiring out of the auditorium and the furniture is an activity for promo....

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....y of section 11(4A) was considered. Therefore, those decisions will have no application in the present appeals. 4. We have carefully considered the arguments of both the sides. The ld. DR has heavily relied upon the provision of section 11(4A) introduced by the Finance Act. 1983 w.e.f. 1-4-1984. This provision reads as under : "(4A) Sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in relation to any income, being profits and gains of business, unless--- (a) the business is carried on by a trust wholly for public religious purposes and the business consists of printing and publication of books or publication of books or is of a kind notified by the Central Government in this behalf in the Official ....

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....ural and literary programmes, to organise and set up Ghalib Museums, Memorial and Centres and to organise such other befitting programmes to perpetuate the memory of Mirza Ghalib." The assessee derived income from rent of property auditorium and furniture and fixtures. The AO accepted the rent from other properties but in respect of rent from auditorium and furniture and fixuture he held the rent to be income from business. The object of the trust as mentioned in para 2(b)(i) above is to plan, organise, promote, execute and supervise cultural and literary programmes. To achieve such objects, the assessee is owning and maintaining an auditorium and furniture and fixture. Therefore, letting out of the auditorium and furniture and fixture is ....

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....e provision of section 11(4A) was not there but at that time the definition of charitable purposes u/s 2(15) read as under : "Charitable purposes include relief of poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit." In all the above cases, their Lordships were considering the words "the advancement of any other object of general public utility not involving the carrying on of any activity for profit". Their Lordships have come to the conclusion that when the predominant object was not to earn the profit but to carry out objects of general public utility, the profit earned is rent would not amount to carrying on of any activity for pr....