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2019 (4) TMI 377

e assessee club as noted above is to provide golf facilities to the members for promotion of the sport. The Tribunal correctly held that there was no element of the assessee's activity being in the nature of trade, commerce or business. Once the applicability of the proviso to Section 2(15) is ruled out, the question of the exemption under Section 11 of the Act would arise. - Clause (a) of sub-section (1) of Section 11 provides that subject to the provisions of Sections 60 to 63, the income derived from the property held under trust wholly for charitable or religious purposes to the extent to which such income is applied to such purposes shall not be included in the total income of the previous year of the person in receipt of the incom .....

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of the inserted proviso to Section 2(15) of the Act, defining the term charitable purpose , the assessee would not satisfy the conditions contained therein. 3.2 The issue eventually reached the Tribunal. The Tribunal while allowing the appeal of the assessee by the impugned judgment, noted that the assessee s principal object and activity was of providing gold club and allied facilities to its members for promotion of the sport. The assessee had invested its surplus funds in the banks thereby earning interest income of ₹ 2.17 Crores during the period in question. The Tribunal noted that the Assessing Officer had disallowed the claim on three grounds namely:- (i) With reference to the proviso to Section 2(15) of the Act; (ii) That the .....

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lity". Proviso to Section 2(15) of the Act provides 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, commere 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 provided the same is not excluded by virtue of clauses (i) and (ii) of the proviso with which we are not concerned. In the present case, the main object of the assessee club as noted above is to provide golf facilities to the members for promotion of the sport. The Tribunal correctly held that there was no element of the assessee's activity being in the nature .....

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