The Tax Publishers2020 TaxPub(DT) 4845 (Karn-HC) : (2020) 429 ITR 0249 : (2021) 277 TAXMAN 0036

INCOME TAX ACT, 1961

Section 11 Section 2(15)

Where assessee was a statutory body constituted under section 5 of Karnataka Industrial Area Development Act, 1966, and AO denied exemption under section 11 on allegation that assessee was engaged in sale of land, considering fact that State Government acquired land for scheme of assessee and handed it over to assessee after acquisition for development of industrial area and that profit making was not the driving force or objective of assessee, proviso to section 2(15) could not be invoked in case of assessee.

Charitable trust - Assessee constituted under section 5 of Karnataka Industrial Area Development Act, 1966 - Assessee whether effected sale of land and engaged in commercial activity -

Assessee was a statutory body constituted under section 5 of Karnataka Industrial Area Development Act, 1966. AO alleged that assessee earned profits systematically over last few years and activity of assessee amounted to commercial in nature as it was engaged in the sale of land and in providing services. AO denied exemption to assessee by invoking the provisions of section 2(15). Held: State Government acquired land for scheme of assessee and handed over same to the assessee after acquisition for development of industrial area. Tribunal held that profit making was not the driving force or objective of assessee. Tribunal, therefore, recorded the conclusion that assessee was engaged in the charitable activity through advancement of an object of general public utility and therefore, rightly concluded that proviso to section 2(15) was not applicable to case of assessee and assessee was entitled to benefit of section 11.

REFERRED : Aditanar Educational Institution v. Addl. CIT (1997) 90 Taxman 528 (SC) : (1997) 224 ITR 310 (SC) : 1997 TaxPub(DT) 1051 (SC) and Indian Chamber of Commerce v. Cochin Chamber of Commerce & Industry (1975) 101 ITR 796 (SC) : 1975 TaxPub(DT) 347 (SC), CIT v. Gujarat Industrial Development Corporation (2017) 83 Taxmann.com 366 (Guj-HC) : 2017 TaxPub(DT) 1934 (Guj-HC), Director of Income Tax (Exemption) v. Ahmedabad Urban Development Authority [Tax Appeal No. 2323 of 2010, dt. 25-4-2017] : 2018 TaxPub(DT) 2601 (Guj-HC), CIT v. Yamuna Expressway Industrial Development Authority (2017) 81 Taxmann.com 208 (All) : (2017) 395 ITR 18 (All.) : 2017 TaxPub(DT) 1243 (All-HC), CIT v. Jodhpur Development Authority (2017) 79 Taxmann.com 361 (Raj.) : 2016 TaxPub(DT) 3870 (Raj-HC), India Trade Promotion Organization v. Director General of Income Tax (Exemptions) & Ors. (2015) 53 taxmann.com 404 (Del) : (2015) 229 Taxman 347 (Del) : (2015) 371 ITR 333 (Del) : 2015 TaxPub(DT) 623 (Del-HC), CIT & Ors. v. Lucknow Development Authority & Ors. (2013) 38 Taxmann.com 246 (All) : (2013) 219 Taxman 162 (All.) : 2014 TaxPub(DT) 157 (All-HC).

FAVOUR : In assessee's favour.

A.Y. : 2009-10



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