TMI Blog2021 (4) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of studio is intrinsic and in pursuance of the objects of the assessee which is education. It is well understood that teaching of Indian Classical Music is within the field of education . The activities of the studio are carried on in order to achieve the main object of the Trust and cannot be construed as business. As mentioned earlier, since the trust is engaged in education, the proviso to section 2(15) does not apply as clarified by CBDT Circular No. 11 dated 19.12.2008. As mentioned earlier, in the case of Sri Thyaga Brahma Gana Sabha [ 1990 (6) TMI 27 - MADRAS HIGH COURT] affirmed the order of the Tribunal in holding that letting out of building did not involve profit-earning activity even assuming it to be an activity. The trust deed is to be read as a whole. Similar are the facts in the instant case. Therefore, following the above decision of the Hon ble Madras High Court, we set aside the order of the Ld. CIT(A). Facts being identical, our decision for the AY 2010-11 applies mutatis mutandis to AY 2012-13. - ITA No. 4193/MUM/2019 And ITA No. 4194/MUM/2019 - - - Dated:- 30-3-2021 - Shri Saktijit Dey (Judicial Member) And Shri N.K. Pradhan (Accountant Member) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are that the assessee filed its return of income for the assessment year (AY) 2010-11 on 28.09.2010 along with Income and Expenditure Account, Balance Sheet and Audit Report in Form No. 10B declaring total income at Rs. Nil. The assessee is registered u/s 12A and 80G of the Act. It received studio charges of ₹ 16,72,197/- from various artists (73 parties) in the year under consideration. The Assessing Officer (AO) observed that the activity of making available the studio to the artists was conducted with an intention to make profits in the shield of charitable activities. The AO arrived at the above finding on the basis of his observation on the continuity, magnitude, quantum and frequency of the activities. Accordingly, the AO brought to tax income of studio charges as business income, by applying provisions of section 11(4A) of the Act and further disallowed expenditure of ₹ 5,00,151/- incurred by the assessee towards the Ajivasan Sounds from the allowable expenditure on the object of the Trust. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that vide order dated 26.04.2019, the Ld. CIT(A) confirmed the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the AO. There is no interference required in the order of the AO in this regard. 5. Before us, the Ld. counsel for the assessee submits that : The Trust has a studio namely Ajivasan Sounds which has been given to various well known artists for the purposes of recordings. The studio has been utilized by the trust for providing hands-on training to its students. On account of the availability of the studio, the students have been able to witness performances by various singing Maestros, which adds to their experience. The trust under its 'Gurukul Philosophy' has a belief that a student must understand how his voice needs to be modulated, the care that he needs to take when singing in a controlled atmosphere, has included the hands-on training of the studio-recording in the curriculum of student which in fact has enabled the trust to attend its main object of imparting education of music in true sense. The Ld. counsel further explains that maintenance of studio is intrinsic and in pursuance of the object of the assessee which is education and it is not trade, commerce or business. Relying on the decision in the case of Shri Thyaga Brahma Sangeet Sabha 188 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed conditions as visualized u/s 11 of the Act were satisfied. Against this order, the assessee filed an appeal before the Tribunal. It is seen that the Tribunal held that looking to the object of the assessee, the hall was utilized only for the purpose of education within the meaning of section 2(15). It further held that even if all the objects of the assessee were not for the purpose of education, they were clearly ones for general public utility. It further held that the activity of letting out the hall is not for profit, and hence the object of the assessee was only for charitable purposes within the meaning of section 2(15) and, therefore, the rental income from the hall is exempt u/s 11 of the Act, provided the assessee satisfied the other conditions. The Revenue filed an appeal against the above order of the Tribunal before the High Court. It is seen that the following facts are noted by the High Court : 9. The Sabha was established to promote the advancement of music and other fine arts. In pursuance of the above objects, the assessee was holding musical entertainments, dramas, kalakshepams, dance, recitals, bhajans, exhibitions and lectures, etc. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act, 1961. Thus, considering the facts appearing on this aspect, in the light of the decisions cited supra, we are of the opinion that the Tribunal was correct in holding that the assessee is entitled to the exemption under s. 11 r/w section 2(15) of the Act in respect of the rental income derived from letting out the Vani Mahal. In that view of the matter, we answer the questions referred to us in the affirmative and against the Revenue. 7.1 It would be relevant to refer to section 2(15) of the Act which defines charitable purpose to include inter alia the following : i. relief of the poor ii. education iii. medical relief, and iv. the advancement of any other object of general public utility. Circular No. 11 of 2008 dated 19.12.2008 issued by Central Board of Direct Taxes (CBDT) clarifies that the newly inserted proviso section 2(15) will not apply in respect of the first three limbs of section 2(15), i.e. relief of the poor, education or medical relief. Consequently, where the purpose of a trust or institution is relief of the poor, education or medical relief, it will constitute charitable purpose even if it incidentally involves the carrying on of comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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