9911796707
TMI Blog1987 (4) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... publication of a magazine which is in nature of commercial venture, is entitled to exemption as provided under s. 11 of the IT Act, 1961?" We, however are declining the Commissioner's reference request. The related facts and our reasons are as follows. 2. The respondent is a company registered under s. 26 of the Indian Companies Act. The ITO denied the claim of exemption of income under s. 2(15) r/w s. 11 of the IT Act, 1961., as according to him the condition of application of 75 per cent of the income was not fulfilled. The ld. CIT(A) set aside the assessment in respect of asst. yr. 1978-79 with directions to make further enquiries regarding the assessee's exemption claim. Thereafter, the ITO analysed the statement of receipt and exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete the picture and project that for its decision the Bench relied on the Supreme Court judgement in the case of Surat Silk Cloth Manufacturers Association and the decisions reported in CIT vs. Andhra Chamber of Commerce (1981) 130 ITR 184 (SC), CIT vs. Andhra Pradesh State Road Transport Corporation (1986) 52 CTR (SC) 75; (1986) 159 ITR 1 (SC) and held that the Federation's activity was primarily aimed at providing certain amenities and benefits to its members and cls. 5 and 10 of the Memorandum further provided that the income and the property of the Federation was to be solely utilised or applied for the promotion of the objects of the Federation and that in the event of the dissolution or winding up of the Federation, the entire propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es was derived in the course of achieving the objects of the Federation, and that there was no basis for the ITO to contend that the predominant object was carrying on of an activity of business or earning a profit. According to him, the earning of income by Federation was only ancillary to the carrying on of charitable activities of general public utility by the assessee Federation. In support of his contentions Shri Juneja has placed reliance on the decision reported in CIT vs. Madras Stock Exchange Ltd. Apr. 1977 CTR (Mad) 1: (1976) 105 ITR 546 (Mad) CIT vs. Andhra Chamber of Commerce (1981) 130 ITR 184 (SC) and Addl. CIT vs. Surat Art Silk Cloth Manufacturers Association (1979) 13 CTR (SC) 378 : (1980) 121 ITR 1 (SC) and CIT vs. Andhr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the Federation and that in the event of the dissolution of the Federation or its winding up, the entire property of the Federation was to be transferred not to the members of the Federation but to another association or institution having similar objects of general public utility. Just because it published certain magazine or brought out publication for the benefit of its members, it could not be said to have indulged predominantly in any activity for profit. This activity was primarily aimed at providing certain amenity or benefits to its members. The requirement of the provisions of s. 2(15) of the Act are satisfied where there is either a total absence of the purpose of profit-making or it is insignificant as compared to the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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