TMI Blog1992 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, 1961 ? 2. Whether the Appellate Tribunal is correct in not applying the decision of the Supreme Court in the case of Yogiraj Charity Trust v. CIT [1976] 103 ITR 777, even though the assessee is a mixed trust existing for not only for charitable purposes but also for non-charitable and non religious purposes and clause 4(j) of the memorandum of association gives wide discretion to carry out any of the objects to the exclusion of all other objects and the assessee can pursue only objects at 4(a) and 4(i) ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the predominant object of the assessee-trust is to carry out charitable purposes having regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promotion of moral, educational and physical improvement. (f) To organise training facilities to improve the efficiency of the trainees. (g) To purchase, construct and alter buildings and maintain them suitably for the purpose of the association. (h) To encourage co-operative movement. (i) To obtain contracts from the Government, public bodies or others and get them executed with the help of the employees. (j) To do all things as are incidental or conducive to the attainment of any or all the above objects, The association has been registered under section 12A of the Income-tax Act, 1961 (for short, "the Act'), by the Commissioner of Income-tax, Bangalore, vide his order dated November 17, 1977. The membership is open to all co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 per watch for casing assembly and Rs. 4.50 per watch for complete assembly of watch from the components. For setting up the assembly unit, the assessee received a grant of Rs. 1 lakh from the Central Social Welfare Board, New Delhi, and further grants of Rs. 18,750 and Rs. 16,350 under the socio-economic programme of the Central Social-Welfare Board in 1975 and 1976. For setting up its ancillary unit, two 'A' type sheds were allotted by the Karnataka State Small Industries Corporation in the Peenya Industrial Estate in 1977. In that year, it employed 52 women drawn up from the weaker sections of the society, who were given vocational training in Hindusthan Machine Tools Watch Factory at Bangalore. The Appellate Tribunal also has referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause is not without significance. An activity is involved in the advancement of an object when it is enwrapped or enveloped in the activity of advancement. In another case, it may be interwoven into the, activity of advancement, so that the resulting activity has a dual nature or is twin-faceted. Since we are concerned with the definition of 'charitable purpose', and the definition defines in its entirety a 'purpose' only, it will be more appropriate to speak of the purpose of profit-making being enwrapped or enveloped in the purpose of the advancement of an object of general public utility or, in the other kind of case, the purpose of profit-making being interwoven into the purpose of the advancement of that object giving rise to a purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de over to the State Government for the purpose of road development and the said amount should be utilised only for the purpose for which it was entrusted to the State Government. In the circumstances, the predominant object of the activity was held to be charitable and not an activity to earn profit. In fact, earning of profit may be inevitable to achieve the primary object of the trust-a fact recognised by the Supreme Court in Surat Art Silk's case [1980] 121 ITR 1 as could be seen from a reading of page 48 (121 ITR 1). We have no hesitation in agreeing with the conclusion reached by the Appellate Tribunal that the dominant object of the assessee in the instant cases is not to earn profit but to carry on charitable activities. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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