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Issues: Whether the assessee was entitled to exemption under section 11(1) of the Income-tax Act, 1961 in respect of income from its kury business after the introduction of section 11(4A).
Analysis: The controlling question was whether the kury business was merely a business carried on by the assessee or whether the business itself was held under trust for charitable purposes. The earlier decisions had already held that the kury business was held in trust and not carried on by the assessee as an ordinary business. Section 11(4A) applies to profits and gains of business carried on by a trust or institution unless the statutory conditions are satisfied, but it does not extend to income from a business itself held in trust. The amendment to section 2(15) and the deletion of section 13(1)(bb) did not alter that legal position.
Conclusion: The assessee was entitled to exemption under section 11(1) of the Income-tax Act, 1961 in respect of the income from the kury business, and the question was answered in favour of the assessee and against the Revenue.
Ratio Decidendi: Section 11(4A) does not withdraw exemption where the business itself is held under trust for charitable purposes; it governs only business income of a trust or institution carried on by it within the statutory conditions.
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