TMI Blog2019 (11) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... f Association are only ancillary objects supporting the main objects of the assessee. Therefore, we are of the considered view that the assessee s objects fall under the 6th limb of section 2(15) hence in the case of the assessee the proviso to Section 2(15) of the Act is not applicable. On examining the revenue received by the assessee amounting to ₹ 3,70,59,197/- as observed in the Order of the Ld.CIT(A) which is extracted hereinabove, we are of the considered view that they are only residual income arising from the main objects / ancillary objects of the assessee-company. For the above stated reasons, we do not find the order of the Ld. AO justifiable for not granting the benefit of exemption U/s.11 of the Act and treating the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee by holding that assessee s claim of exemption U/s. 11 cannot be accepted. 3. Brief facts of the case are that the assessee is a company engaged in charitable activities in the nature of preservation of environment, forests, wildlife etc., registered U/s. 12A of the Act, filed its return of income on 7/1/2014 declaring NIL income. Subsequently the case was taken up for scrutiny under CASS. During the course of scrutiny assessment, it was observed by the Ld. AO that the assessee has claimed exemption of its income to the extent of ₹ 3,70,59,197/- U/s. 11 of the Act. It was further observed by the Ld. AO that the main activities of the assessee were sale of forests produce such as Eucalyptus ₹ 75,72,70,975/-, B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of association of the assessee, it can be seen that the assessee's main objectives are as shown below: (i) To develop land for raising Forest Plantation and in particular Eucalyptus, Tropical- Pines, Rubber, Cashew, Cocoa and such other suitable species in the State of Andhra Pradesh for the purpose of development of industries based on their produce. (ii) To plant, grow, cultivate, produce and raise plantations of all kinds of varieties of Forest plants, trees and crops and natural products of every kind and other agricultural crops and to buy, sell, export, import, process, distribute or otherwise, deal in all kinds of Forest plants, tree crops, natural products and Agricultural crops. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding water-shed management, preservation of water tables, conservation of natural forests, creation of employment opportunities to the tribal/rural population etc. Further from the final accounts of the assessee, it is seen that there is no accounts involving the activities including water-shed management, preservation of water tables, conservation of natural forests, creation of employment opportunities to the tribal/rural population etc. From the accounts it becomes clear that the assessee was not involving in any of the charitable activities as mentioned above in this para. 31. From the accounts also becomes clear that the assessee is engaged in only activities of cultivation/ growing of forest products including Euca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was registered U/s. 12A of the Act. The Ld. AR further argued that the Ld. CIT (A) had erroneously held stating, 12A application must be submitted every year and registration obtained for availing the benefit of section 11 of the Act. The Ld. AR submitted that the entire activities of the assessee-company were with respect to protection of environment, forests and wildlife falling in the 6th limb of section 2(15) of the Act and therefore proviso to section 2(15) of the Act is not applicable in the case of the assessee. It was therefore pleaded that the tax imposed on the assessee by treating the amount of ₹ 3,70,59,197/- as taxable income may be deleted. The Ld. DR on the other hand stoutly argued in support of the orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- as observed in the Order of the Ld.CIT(A) which is extracted hereinabove, we are of the considered view that they are only residual income arising from the main objects / ancillary objects of the assessee-company. For the above stated reasons, we do not find the order of the Ld. AO justifiable for not granting the benefit of exemption U/s.11 of the Act and treating the amount of ₹ 3,70,59,197/- as the taxable income of the assessee which is upheld by the Ld. CIT (A). Therefore, we hereby set aside the order of the Ld. CIT (A) and further direct the Ld. AO to delete the tax imposed on the assessee by treating the amount of ₹ 3,70,59,197/- as taxable income. 7. In the result, appeal of the assessee is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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