2017 (7) TMI 1271

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... grievance of the revenue is that the ld. CIT(A) erred in deleting the addition of Rs. 46,54,685/- made by the A.O. by disallowing the claim for exemption u/s. 11 r.w.s. 12A and section 2(15) of the Act. 3. The assessee is a Public Charitable Trust engaged in the development of Cattle and Buffalo and is also recognized u/s. 80G of the Act. 4. The return for the year under consideration was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 5. During the course of the scrutiny assessment proceedings, the A.O. asked the assessee to justify its claim of exemption in the light of the proviso to Section 2(15) of the Act. 6. Assessee filed a detailed reply in support of its cla....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... are similar to the facts of Sabarmati Ashram Gaushala Trust. The objects are also similar. 12. We find that the order of the Tribunal was challenged before the Hon'ble Jurisdictional High court which admitted the following substantial question of law:- (A) "Whether the Appellate Tribunal has substantially erred in directing the Assessing Officer to provide exemption u/s. 11 of the I.T. Act to the assessee?" (B) "Whether the Appellate Tribunal has substantially erred in holding that the proviso to Section 2(15) to the I.T. Act was not applicable to the facts and circumstances of the case?" 13. And the relevant findings of the Hon'ble High Court read as under:- "We are wholly in agreement with the view of the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ity to the nature of trade, commerce or business. As clarified by the CBDT in its Circular No. 11/2008 dated 19th December 2008 the proviso aims to attract those activities which are truly in the regarded as business even when profit motive cannot be established/proved. In such cases, there should be evidence and material to show that the activity has continued on sound and recognized business principles, and pursued with reasonable continuity. There should be facts and other circumstances which justify and show that the activity undertaken is in fact in the nature of business. The test as prescribed in Raipur Manufacturing Company [1967] 19 STC 1 (SC) and Sai Publication fund [2002] 258 ITR 70 (SC); [2002] 126 STC 288 (SC) can be applied. ....