2000 (3) TMI 27

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....--In all these tax cases, the common question of law that arises for consideration is : "Whether, the Appellate Tribunal has justified in law and had valid materials to hold that the assessee-Sabha is entitled to exemption under section 11 of the Income-tax Act, 1961, even though the Sabha has let out the Kalyana Mandapam for profit?" The respondent-Sabha, namely, Samyuktha Gowda Saraswatha ....

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.... with the use of the hall, the Sabha also lets out on hire furniture, utensils, decorative items, etc., as may be required by the persons hiring the hall. The Income-tax Officer for the assessment years 1977-78, 1978-79 and 1979-80 held that the objects of the trust are partly charitable and partly non-charitable and hence the assessee was not entitled to exemption under section 11 of the Act. ....

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....nd such activity was an activity to better its investment yield and such funds to be used for charitable purpose, namely, advancement of education and relief to the poor and, hence, the assessee was entitled to exemption. Learned counsel for the Revenue contended that the entire income of the Sabha should be taken into account for the purpose of levying income-tax and submitted that the advance....

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....ll was to earn income to fulfil and apply the same to the main objects of the assessee-Sabha. We are of the view that the decision of the apex court in CIT (Addl.) v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 applies to the case as the objects of the assessee are education and other objects of general utility and the letting out of the kalyana mandapam was not one of the obje....