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2015 (4) TMI 976 - BOMBAY HIGH COURT

2015 (4) TMI 976 - BOMBAY HIGH COURT - [2015] 379 ITR 506 (Bom) - Charitable purpose - Non applicability of section 2(15) - whether advancement of any other object of general public utility shall not be a charitable purpose? - Held that:- The motive of the assessee is not the generation of profit but to provide training to the needy women in order to equip or train them in these fields and make them self confident and self reliant. There is nursing training, which is also being managed and admin .....

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ancement of any other object of general public utility, but that will not cease to be charitable purposes in this case, because, the activities in which the trust is involved cannot be termed as carrying on of trade, commerce or business. This is to impress upon the women the need to be self reliant and self supporting and to instill in them the confidence that they can make a livelihood for themselves if they rely on the skills as afore-noted, that the activity has been undertaken. It does not .....

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R> Trust has been set up and is functional for the past several decades and it has not deviated or departed from any of its state object and purpose, utilisation of the income, if at all generated, does not indicate carrying on of any trade, commerce or business. The Tribunal's view deserves to be upheld. It is a possible view and cannot be termed as perverse - Decided in favour of assessee. - Income Tax Appeal No. 443 of 2013 - Dated:- 23-3-2015 - S. C. Dharmadhikari And A. K. Menon,JJ. For th .....

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he proviso thereto and thus urges that this appeal raises substantial question of law. In his submission, the proviso emphasises that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration irrespective of the nature of use or applic .....

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61 could not have been invoked and assuming without admitting that the matter could have been decided by the Tribunal by taking into account the proviso and it indeed was decided since the requirement of the proviso is not satisfied in this case. The requirement is that the purpose has to be charitable and cannot be termed as such, if the same involves advancement of any other object of general public utility. Mr.Dastur submits that it will not be treated as a charitable purpose if it involves a .....

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merce or business. The Tribunal has found that the income and expenditure account discloses a sum of ₹ 47,15,249/- as surplus from trading account. The Director of Income Tax held that the assessee trust has shown sales to the tune of ₹ 69,72,052/-, besides the bank interest on fixed deposit and savings bank account is shown as ₹ 56,73,160/-. However, the trust's activity will not fall in the proviso as the sales are only of the items made by the ladies who are attached to .....

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proviso is applicable. That the proviso is applicable for the reasons that he has assigned at the internal page 4 of the order passed by him. 5. Firstly, we must understand that the assessment year in question is 2009-10. The definition of the word 'charitable purpose' in the proviso reads as under:- "Section 2(15) 'Charitable Purposes' includes relief of the poor, education, medical relief [preservation of environment (including watersheds, forests and wildlife) and preser .....

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tion, or retention of the income from such activity. Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is ten lakh rupees or less in the previous year. " 6. A perusal of the same will indicate as to how if the advancement of any other object of general public utility shall not be charitable, if the assessee is involved in carrying on any activity in the nature of trade, commerce or business or any activity .....

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the assessee uses related material which it buys from the open market. This is essential for carrying out the assessee's object. In the process, some finished product such as pickles, jam, etc. are produced and which the assessee sells through the shops, exhibitions and personal contacts. The motive of the assessee is not the generation of profit but to provide training to the needy women in order to equip or train them in these fields and make them self confident and self reliant. There is .....

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ogrammes, which are undertaken to educate the rural women, teach them various skills and make them, aware of how to live honourably. Thus, on these undisputed facts, the Tribunal found that this is not an activity which would fall within the proviso. The Tribunal has rightly referred to the two letters which have been addressed by the trustees of the assessee trust. They clarify that in the past, such activities have been found to be incidental to the object of the trust. Secondly, the donation .....

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