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| The Tax Publishers2020 TaxPub(DT) 3843 (Jp-Trib) INCOME TAX ACT, 1961
Section 11
Where assessee-society was not at all indulged or involved in any kind of milk business and activities of milk collecting and disbursement were only in the nature to support to women welfare, AO was not justified in denying exemption under section 11 to assessee on allegation that receipt from milk trade was a commercial activity.
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Charitable trust - Exemption under section 11 - Receipt from milk trade activity whether commercial activity - Activities of milk collecting and disbursement were only in the nature to support to women welfare
Assessee was a charitable institution, which was registered under Societies Registration Act and also under section 12AA. While framing assessment under section 143(3), AO treated receipt from milk trade activity as commercial activity and made additions. CIT(A) allowed assessee's claim and held that receipt from milk trade was not a commercial activity. Held: Assessee society was not at all indulged or involved in any kind of milk business. The activities of milk collecting and disbursement were only in the nature to support to women welfare. Such giving up of milk chilling plant and other allied facilities including equipment, etc., held by NUS (assessee-society) to FPO created and run by women beneficiaries fully substantiated that there was no business taken up by the assessee. Milk collection and disbursement activity was conducted as per scheme sanctioned by donors only and the assessee did not itself carry out such activity on its own, which distinguished requirement of following the provisions of section (4A) of section 11.
REFERRED : Mool Chand Khairati Ram Trust v. Director of Income Tax (Exemptions) (2015) 59 Taxmann.com 398 (Del) : 2015 TaxPub(DT) 2886 (Del-HC), Director of Income Tax v. Women's India Trust (2015) 60 Taxmann.com 55 (Bom) : 2015 TaxPub(DT) 2094 (Bom-HC), B.B. Educational Society v. CIT, Karnal (2018) 92 Taxmann.com 300 (Delhi-Trib.) : 2018 TaxPub(DT) 2003 (Del-Trib), Thamizh Thai Seva Trust v. Director of Income Tax (Exemptions), Chennai (2015) 53 Taxmann.com 215 (Chen-Trib.) and Sabarmati Ashram Gaushala Trust v. ADIT (Exemption) (2013) 35 Taxmann.com 552 (Ahd-Trib.) : 2013 TaxPub(DT) 2160 (Ahd-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, JAIPUR BENCH
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