TaxTMI 
TaxTMI 
2011 (10) TMI 697
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.... Income-tax Act, particularly when the hiring of the auditorium and providing space for rent are commercial activities and there is nothing charitable about the activities carried on by the assessee. 3. The assessee society is registered under sec. 12A of the Act vide order dated 9.02.1977 of the learned Commissioner of Income-tax. It was found by the Assessing Officer that the assessee's main source of income was from hiring charges of auditorium, rental income and maintenance charges received from the tenants. After hearing the assessee and considering the assessee's application, the AO found himself in agreement with the views of his predecessor that hiring of auditorium and rent of property were the principal activity of the assessee, ....
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....08 by observing as under:- 3. The submissions of the ld. DR before us are to the effect that earning of rental income by hiring the premises and charging maintenance charges is a commercial activity, therefore, the assessee should have maintained separate books of account for this activity. There is nothing on record to show any charitable activity in pursuance of the objects of the society. Therefore, it is agitated that the provision contained in section 11(4A) is applicable. 3.1 As against the aforesaid, the submission of the ld. counsel is that the assessee has been assessed as a charitable society over a long period of time. There has been no change in facts in this year. The issue raised by the revenue stands covered by the decisi....
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....ct was not to earn the profit but to carry out objects of general public utility, the profit earned is rent would not amount to carrying on of any activity for profit. Here, in this case also, the predominant object of the letting out of the auditorium and furniture and fixture is for carrying out of the object of the trust and, therefore, in view of the above decisions, it is not an activity carried on for profit. Therefore, it cannot be said to be profits and gains of the business. Accordingly, s. 11(4A) will have no application. Therefore, we hold the assessee-trust be allowed exemption under s. 11 even in respect of the income from rent from letting out of the auditorium and furniture and fixtures. Accordingly, ground no. 1 of the ass....