TMI Blog2015 (1) TMI 1417X X X X Extracts X X X X X X X X Extracts X X X X ..... making, we find that benefit of exemption cannot be denied on the ground that it had made surplus/profits as long as it is not meant for private profit of seller. Profit making is not predominant object of activity. CIT(A) was justified in holding that assessee is doing charitable activity as per Section 2(15), benefit of Section 11 & 12 of the Income-tax Act is available to it. CIT(A) was justified in directing AO to treat the activity of assessee company as charitable and further rightly directed to delete the addition. This reasoned finding of CIT(A) needs no interference from our side. - Decided against revenue. - ITA.No.546/Ahd/2013 (Assessment Year:2009-10) - - - Dated:- 29-1-2015 - Shri Shailendra Kumar Yadav And Shri N. S. Sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, it is not entitled for exemption u/s. 11 12 of Income-tax Act. Assessing Officer observed that main object of company, when it was incorporated, is as under: To engage in the business as manufacturers, dealers, importers, exporters, consignment agents, erectors, traders, consultants in all kinds or pollution treatment plants/equipments whether water pollution, air pollution, noise pollution without limiting the scope thereof, establishing the pollution treatment plants for industries, Government industrial estate in cooperative section acting as consultants for environmental and pollution problems, carrying on all activities, relating to above including plantation for the purpose of pollution treatment . 2.2 Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is not charitable. Assessing Officer also pointed out that activity of assessee company was carried out for the benefit of members to discharge their onus of treatment of chemicals, etc. with substantial charges with a sole intention to earn profit under Section 25 of Companies Act. Assessing Officer concluded that assessee company is rendering services of pollution control as per the norms laid down by the GPCB or any other authority responsible for regulation of pollution control. Since assessee company is rendering services and its aggregate value of surplus are more than ₹ 10 lacs, the proviso to Section2[15) are applicable and thus according to Assessing Officer, exemption u/s. 11 12 are not available to assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Assessing Officer that surplus generated is not distributed to its members/shareholders, etc. The assessee cannot loose exemption merely on the ground that it has made surplus as long as assessee is not generating surplus for private profit of the settler or any other person. In this situation, Assessing Officer was not justified in holding that assessee was generating surplus or profit making was the predominant object of assessee. Assessee company was incorporated with a sole object to comply with directions of Hon'ble High Court of Gujarat in a PIL for industries of Naroda GIDC for establishment in running of Common Effluent Treatment Plant and its storage and disposal facility at Odhav, Ahmedabad. The project was setup und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2(15) is applicable to objects of general public utility. The same was also clarified vide CBDT Circular No. 11 dated 19.12.2008. Since assessee company is directly engaged in preservation of environment as per Section 2(15), the proviso as pointed by Assessing Officer is not applicable in the instant case. Accordingly, Assessing Officer was not justified to conclude that assessee is not doing any charitable activity. With regards to Assessing Officer s contention that assessee is carrying out business activity and is in the nature of profit making, we find that benefit of exemption cannot be denied on the ground that it had made surplus/profits as long as it is not meant for private profit of seller. Profit making is not predo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
