TaxTMI 
TaxTMI 
2016 (9) TMI 855
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....now. (2) Without prejudice to the above the Ld. CIT(A) has erred in holding that the activities of the appellant is not in the nature of charitable purpose in view of the definition of Section 2(15) of the Income Tax Act. It is submitted that the appellant trust is not at all collecting or receiving any CESS or fee for carrying on any activities in the nature of trade, commerce or business. In view of this, the invocation of section 2(15) and holding that the appellant trust is not entitled to exemption u/s. 11(1)(a) is erroneous and the same be reversed. (3) The Ld. CIT (A) has erred in taxing the gross income of the appellant of Rs. 3,36,06,368/- at 30% considering the status of the appellant as A.O.P. without granting the proper deductions available under the Income Tax Act. It is submitted that the same be allowed now. (4.) Without prejudice to the appellant's right to get the exemption u/s. 11(1)(a), it is submitted that the Ld. CIT (A) erred in not giving the set off of earlier years' carried forward losses of Rs. 4,02,28,751/- as per section 72 of the Income Tax Act. It is submitted that the appellant is entitled to set off of losses of ear....
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....hat the cess in question was not in the nature of any trade, commerce or business including any profit motive. The Assessing Officer declined the same in assessment order dated 13-03-2013 thereby reiterating above stated contents of the show cause notice to add the excess cess sum in question of Rs. 3,36,6,368/- as assessee's business income thereby declining exemption claim u/s. 11(1)(a) of the act. 6. The CIT(A) upholds Assessing Officer's action as follows:- "3.3. I have considered the order of the AO as well as the submissions made by the appellant. From the order of the Assessing Officer, it is seen that AO has denied exemption u/s. 11 to the appellant by holding that the objects of the appellant involved activities/services rendered for advancements of other object of general public utilities for which the appellant is receiving cess. He has also relied upon the fact that the appellant has been denied approval u/s. 35(1)(ii) of the IT Act, 1961 stating that the appellant is not carrying our any research activities. Accordingly, the AO has held that during the F.Y. 2009-10 relevant to A.Y. 2010-11, the activities of the trust are no longer charitable in view of the....
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.... Utpadak Mandalis. In lieu of rendering such services, the appellant is receiving cess from the farmers who are selling their milks. There is 3 tier cooperative structure for production and sale of milk in Gujarat. This structure consists of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the district level, which in turn is federated into a Milk Federation at the state level. Milk collection is done at the Village Dairy Society, milk procurement and processing at the District Milk Union and Milk & Milk products marketing at the said Milk Federation. Thus all these 3 tiers are involved in the production of milk, manufacture of different milk products and sale of the same. These activities are in the nature of trade, commerce or business because of the fact that the activities of these 3 tiers along with the activities of milk producers, who form the root level of this structure, are profit oriented. The appellant is providing services to such milk producers and their cattle. As against this the appellant is charging a cess of 12 paisa per litre of milk deposited by the milk producers with Village Dairy Cooperative Society. Thus the appellant's cla....
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.... aforesaid agreement reveals that you are engaged in the business of dairy farming and it is seen that in pursuance of this agreement, you have conducted only trials of the premix (rovimix-VM) containing different proportion of vitamins and minerals on crossbred Indian animals. This activity being a contractual trial of various premixed feeds done on Indian cows for overseas client cannot be termed as scientific research of empirical nature for the purposes of section 35(1)(ii) of the IT Act, 1961. 2.4 You have also entered into agreement with M/s. BIOMIX, Mumbai, a company specializing in the field of pharmaceuticals and diagnostic industries and developing patented diagnostic and therapeutic products and clinical trials, to allow them your cheese plant for production of RECEPTOL and colostrums products for exclusive use by BIOMIC, for the purpose of which Biomix would build a pilot plant at Amul Cheese Factory and Amul shall only source and procure colostrums for Biomix as per agreed price. This again is a pure business activity providing facility to the company M/s. BIOMIX, and has nothing to do with conducting research by you." Thus, the appellant has also bee....
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....a particular provision becomes redundant. The harmonious construction of the previous of the Act are required to be made so that affect can be given to all such provisions of the Act. Hence, the appellant's contention are rejected. Reliance is also placed upon the decision of Jaipur Bench of Tribunal in the case of Rajasthan Housing Board, 21 taxmann.com 77(JP) in which the Bench has held that in view of amended provisions of provisions of section 2(15), if in any year, gross receipts of a charitable institution exceed prescribed limit, then in that year, the AO is empowered to examine allowability of exemption under Section 11, but same has not effect on registration granted to said institution under Section 12AA. 3.3.6. The alternative plea of the appellant is that it is doing activity of medical relief. The objects of the appellant have been reproduced by the AO in his assessment order. From this it can be seen that the objects of the appellant are multi faceted. The first object of the appellant is to carry research, development and extension work conductive to the economic development of agriculturist and to provide an organization for the benefit and service to t....
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....oncur with this line of reasoning as section 35 rejection order denying deduction of expenditure on scientific research stands on a totally different footing as against the impugned exemption proceedings. We make it clear that we are dealing with section 2(15) r.w.s. 11 of the Act wherein the only issue is that of the assessee being engaged in charitable activities in furtherance to its charitable objects followed by application of income in furtherance thereto. We accordingly are of the opinion that both the lower authorities have wrongly rejected assessee's exemption claim by invoking section 2(15) proviso of the act, since it neither carries out any activity in the nature of trade, commerce business nor any activities or renders any service in relation to the same whilst collecting the impugned cess @ 12 paisa per liter from milk producers in lieu of making them avail the above stated facilities. A co-ordinate bench of this tribunal in DCIT vs. Andhra Pradesh Civil Supplies Corporation (2016) 70 taxmann.con 48 (Hyderabad) also interprets the above stated proviso to conclude that an Assessing Officer has to satisfy the relevant conditions u/s. 2(15) 1st proviso in question before....
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....ng the breeds and prohibiting the slaughter of cows and calves and other milch and drought cattle. Latter article further specifies State's efforts to protect and improve the environment and safeguard the forest and wild life of the country. We revert back to the assessee's activities at this stage. There is no dispute that it makes available maternity, animal nursery, fertility and vaccination facilities to milching animals belonging to milk producers in lieu of collecting cess @ 12 paisa per liter deposited with the primary milk cooperative bodies. The same in our view squarely comes within the four corners of the article 48 of the act amounting to taking steps for preserving and improving the breeds of cows and calves and other milching animals. This Act gives rise to a safe inference that the State makes all its laws keeping in mind these Directive Principles contained in Chapter IV hereinabove including those under Article 265. We further notice that similar provisions are also there in chapter IV(A) incorporating fundamental duties of every Indian citizen Article 51(g) inter alia prescribes to have compassion for living creatures. We deem it appropriate to opine in view of al....