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2019 (11) TMI 460

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..... ciation 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 amou .....

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..... n 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/-, Bamboo - ₹ 5,90,90,760/-, Cashew - ₹ 2,61,44,437/-, Coffee Seed ₹ 7,56,54,607/-, Pepper - ₹ 66, 96,983/-, Miscellaneous Forest Produce - ₹ 2,37,06,679/- aggrega .....

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..... a 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. (iii) To carry on the business of planters, cultivators, sellers and dealers in timber, plywood, pulpwood, match wood and such other products of every description and to manufacture, dispose of, sell and deal, in products of such plantations and other forest crops of every .....

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..... , 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 Eucalyptus, Bamboo, Cashew, Coffee seed, Pepper etc and sale of these products. The expenditure booked by the assessee are relatable to growing cultivation, processing of these products only. There is no mention about any expenditure involving the charitable activities claimed by the assessees. 32. Considering all the facts, it is clear that the assessee is engaged purely on business activi .....

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..... ction 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 of the Ld. Revenue Authorities and requested for confirming those orders. 6. We have heard the rival submissions and carefully perused the materials on record. From the assessment order passed by the Ld. AO for the AY 2016-17 dated 22/12/2018 in the case of the assessee, it is evident that registration was granted to the assessee U/s. 12A of the Act vide order in H.Qrs.12A/24/91-92, dated 15/10/1991. When the registration is granted to the assessee vide order dat .....

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