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TMI Blog2012 (6) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the united Gowda Saraswat community, and (iii) promotion of any other objects of general utility but not involving the carrying on of any activity for profit except such as is incidental to these objects. 3. Evidently, the society's income consists of membership subscriptions, interest on fixed deposits and income from running kalyana mandapam. In the income-tax return filed for the abovesaid assessment years, the asses-see claimed that the income earned on the letting out of the kalyana mandapam was an income from property and it claimed exemption under section 11 of the Income-tax Act. As regards the wealth-tax assessment, the assessee took the same contention and claimed exemption under section 5(1)(i) of the Wealth-tax Act. The Wealth-tax Officer viewed that running of the kalyana mandapam constituted business activity. Hence, in the income-tax assessment for the assessment year 1987-88, as the provision of section 11(4A) of the Income-tax Act was invoked in respect of the income arising from running the kalyana mandapam and the decision of the Tribunal in the assessee's case for the assessment year 1987-88 was pending in appeal before this court, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VM Charities [2010] 323 ITR 27 (Mad), Director of Income-tax (Exemptions) v. Willington Charitable Trust [2011] 330 ITR 24 (Mad), Asst. CIT v. Thanthi Trust [2001] 247 ITR 785 (SC) and C. K. Gangadharan v. CIT [2008] 304 ITR 61 (SC) and pointed out that even though the Revenue had not gone on appeal as against the earlier decision reported in CIT v. Sam- yuktha Gowda Saraswatha Sabha [2000] 245 ITR 242 (Mad) in view of the decision reported in Director of Income-tax (Exemptions) v. Willington Charitable Trust [2011] 330 ITR 24 (Mad), rendered by this court, the above decision be referred to a Larger Bench, as held in the decision reported in C. K. Gangadharan v. CIT [2008] 304 ITR 61 (SC), or in the alternative, to follow the decision reported in Director of Income-tax (Exemptions) v. Willington Charitable Trust [2011] 330 ITR 24 (Mad), holding the income as business income. He also relied on the decision reported in CWT v. Fagun Co. P. Ltd. [2006] 286 ITR 297 (Mad) [FB], wherein the Full Bench of this court held that the computation under the Income-tax Act and the Wealth-tax Act are different and that the claim of the assessee would have to be considered only as per the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, this court held that the assessee would have to satisfy the authorities as to the actual utilisation of the income for charitable purpose to qualify for the exemption. In the context of the same, to consider the claim for exemption, this court remanded the matter to the assessing authority to find out the actual entitlement of the exemption by considering the materials placed before him on the question of exemption under section 11 of the Income-tax Act. Hence, contrary to the assertion of the learned standing counsel, there is nothing in the said decision which is in conflict with the decision of this court in the assessee's case decided earlier, wherein this court affirmed the findings of the Tribunal that the receipt of the income was not business income but income from house property. 8. Referring to the provisions of section 5(1)(i) of the Wealth-tax Act, she pointed out that even though the provisions of the Income-tax Act and the Wealth-tax Act are different, yet, for the purpose of considering the claim for exemption under section 5(1) of the Wealth-tax Act, the Wealth-tax Act does not ignore the treatment under section 11(4A) of the Income-tax Act. Thus, goi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1987-88 in T. C. No. 901 of 1995, holding that the income from the property let out for kalyana mandapam was income from property and not business income, have not been challenged till this day and have become final. In all subsequent years too, the Revenue has been consciously holding the view that receipt on letting of the kalyana mandapam was assessable as income from property and not as business income. The benefit of section 11 of the Income-tax Act had been consistently applied in the case of the assessee throughout. Thus, as pointed out by the learned counsel for the assessee, as far as the assessee's case is concerned, admittedly, the Revenue had no grievance consistently in treating the income earned on letting of the kalyana mandapam as income derived from the property held under trust wholly for charitable purpose and, hence, the assessee was entitled to exemption under section 11 of the Income-tax Act. Thus, with the receipts from letting of kalyana mandapam treated as income from property and not as business income, we do not find any acceptable ground in the submissions of the learned standing counsel that for the purpose of considering the claim for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the provisions of section 11(4) and 11(4A) of the Income-tax Act, this court held that section 11(4A) of the Income-tax Act does not exclude section 11(4). Exemption under section 11(4A) would be available only when the business is incidental to the attainment of the object of the trust and when it is not the case, then such an income cannot be exempted. Thus, only such income which is used towards the object of the trust stands exempted. The said view was taken in consonance with section 11(4) as it stood then. In any event, this court held that section 11(4) and 11(4A) of the Act, being complementary to each other, section 11(4A) does not restrict section 11(4). As regards the compliance with the maintenance of separate books of account, this court pointed out that the assessee would have to satisfy the authorities by producing materials to show that the income derived from the business was utilised to fulfil the object of the trust. Since the said question had not been gone into by the authorities, this court thought it fit to remand the matter back to the Assessing Officer to find out the actual entitlement of the assessee by considering the materials placed before them. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which separate books of account are maintained or that the business is carried on by the institution. This is referred to in clause (22) or (22A) or (23B) or (23C) of section 10 of the Income-tax Act. The said provisions were introduced in conformity with the amendment made in the Income-tax Act under section 11(4A) by which exemption from the Income-tax Act in respect of profits and gains of business of public charitable or religious trusts was with-drawn, except in the case of trusts falling under the specified categories. Thus, in line with the provision contained in the Income-tax Act, assets held in business are to continue to be exempt from the Wealth-tax Act in the following cases, viz., "(i) where 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 the business is of a kind notified by the Central Government in this behalf in the Official Gazette ; (ii) where the business is carried on by an institution wholly for charitable purposes and the work in connection with the business is mainly carried on by the beneficiaries of the instit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is absolutely no dispute on the proposition of law that the provisions under the Income-tax Act and the Wealth-tax Act are totally different. Given the fact that the income from the kalyana mandapam is treated as income from property and that the property had been admittedly held by the assessee under trust for public purpose of a charitable nature, one need not advert to the applicability of the provision herein to the facts of the case. In any event, it is not the case of the Revenue that the case of the assessee falls under section 11(4A) of the Income-tax Act, a plea which the Revenue cannot take at this stage, having regard to the income-tax assessment granting exemption under section 11 of the Income-tax Act. Thus, the decision of this court rendered in T. C. No. 901 of 1995 for the assessment year 1987-88 binding on the Revenue, so too the treatment under the Income-tax Act for the year under consideration granting exemption, the income by letting out the kalyana mandapam as income from the property is also binding on the Revenue and it is not now open to the Revenue to take a different view. Hence, we do not find any acceptable ground to accept the case of the Revenue that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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