TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 113
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....ght to have allowed the expenditure of Rs. 5,00,151/- lakhs incurred on the objects of the trust. 3. The Ld.CIT(A) ought to have held that the objects and activities of the appellant are "educational" and therefore proviso to section 2(15) is not applicable. 4. Without prejudice to the above ground, the Ld.CIT(A) ought to have held that the percentage of receipts from recording studio to the total receipts is 10.10% as against 28.86%, and in any event the said receipts were less than 25 lakhs which was the threshold to attract the proviso to section 2(15). 5. The Ld.CIT(A) erred in not appreciating that the studio facility is an integral part of the training activities in the field of music and making it available for recording, is merely incidental to the main objects of the appellant and therefore, cannot be considered as business. 6. The Ld.CIT(A) erred in not appreciating that the surplus from recording studio is merely incidental to the activities carried out in pursuance of the main object of the trust and there is no profit motive. 7. Without prejudice to the above grounds and assuming without conceding that the income from recording studio amounts to business inco....
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....d of charitable activities. v. The intentions to make profit is further substantiated by the fact that irrespective of the continuity of an explicit motive thereof, assessee has not maintained separate books of account as envisaged by the specific provisions of Section 11(4) and (4A) of the Income Tax Act, 1961. vi. Separate books of accounts mean separate Bank Account, separate Trial Balance, separate Profit and Loss Account and separate Balance Sheet. The assessee trust has not maintained any separate books of accounts so that such activities are hindered under the blanket of charitable activities. vii. The assessee also pays service tax and files its service tax returns on the studio charges receipts. Thus, it is established that the activities of giving the studio for hiring are not a coincidental activity but a well-planned activity with an intention of earning income side by side. In view of the above observation of the AO, I find no merit in the argument of the appellant. Accordingly, AO is justified in considering the activity of making available this studio with an intention to make profits in the shield of charitable activities and justified in taxing the income o....
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....Trust Deed' of the assessee. Relying on the order of the Ld. CIT(A), it is pleaded by her that the same may be affirmed. 7. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In Sri Thyaga Brahma Gana Sabha (supra), the assessee is a registered Trust and is the owner of the hall called "Vani Mahal". For the AY 1973-74, the AO, after referring to the objects of the assessee, adverted to different types of membership and, thereafter, proceeded to compute the total income of the assessee. The AO denied the exemption claimed by the assessee u/s 2(15) of the Act. The assessee appealed to the first appellate authority (AAC) and claimed exemption u/s 11 r.w. section 2(15) of the Act. The AAC held that barring the activity of letting out the hall on rent, the rest of the income of the assessee would be exempt u/s 11 of the Act, provided the other conditions were satisfied. In the matter of letting out the hall, he held that there was clearly an activity which resulted in a profit and, therefore, the income attributable to such activity would not be exempt u/s 11 of the Act. Accordingly, he directed the AO to a....
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.... section 2(15) of the Act, "charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit, the Hon'ble High Court concluded that : "25. As already pointed out, in the present case, Vani Mahal was let out to others whenever the assessee was not utilizing it. Even assuming that the net income of the Sabha is from an activity, the question is whether it is for profit. In the objects of the society, nowhere it is stated that earning of profit is its object. Therefore, there is no profit motive in running the Sabha. It would appear that no specific rate was fixed by the Sabha for letting out the hall and, on several occasions, the hall was let out on concessional rates to various parties. The rates charged are more or less ad hoc and in later stages it was shown as "donations". The rate was usually in the routine of Rs. 100 per day. After examining the income and expenditure statement for the past 25 years and the report of the governing body of the sabha, the Tribunal, on facts, came to the conclusion that the Sabha was running at a loss all these y....