9911796707
TMI Blog1990 (4) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... as Act for brief hereinafter) dealing with the definition of 'charitable purpose' and, therefore, not entitled to the exemption as envisaged by section 11 of the Act. 3. Explaining the revenue's stand, the learned departmental representative advanced two reasons before us viz., (i) that Article 100 of Memorandum and Articles of Association of the Company granted power to declare dividend and (ii) that the activities of the respondent company do not cover the entire population but restricted to a chosen few. This is seriously opposed by the learned counsel for the assessee company. 4. On facts, the respondent company is incorporated under the Companies Act with a share capital of Rs. 10 lakhs as on 31-3-1974, increased to Rs. 4,93,31,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e divisible among the members in proportion to the amount of capital held by them respectively. " In dealing with this issue, we are fully convinced that the submission made by the learned counsel for the Company that the enabling clause for declaration of dividend by itself cannot be said to be determinative of the character of the company's activities. Whether an institution is run for the purpose of profit or not depends upon the facts of each case. In this case reliance was placed on a decision of the jurisdictional High Court in Girijan Co-operative Corpn. Ltd. v. CIT [1989] 178 ITR 359/44 Taxman 60 (AP) and a decision of the House of Lords in Ereaut v. Girls' Public Day School Trust Ltd. 15 TC 529. In Girijan Co-operative Corpn. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the conditions of the members of Scheduled Tribes was an object of general public utility. The primary or predominant object of the activity of the assessee was not earning of profits, but the advancement of members of Scheduled Tribes. The assessee was registered as a co-operative society but in reality it was an agency set up for the purposes stated in the relevant government order and it was the substance which mattered and not the form. That there was a provision for declaration of dividends but the dividends were paid to member societies which served the Scheduled Tribes. There was also a ceiling on dividends. The balance of the profits went into a reserve fund and the reserve fund was also meant to advance the cause of the Scheduled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by us hereinbefore which revolves round the government's intention to promote and assist rapid and orderly establishment, growth and development of industries and commerce in the State of Andhra Pradesh rather than any profit moto. It is certainly a purpose of general public utility within the meaning of section 2(15) of the Act. We are, therefore, of the view that following the aforesaid ratio of the jurisdictional High Court and the House of Lords, merely because the articles of association of the Company made a provision for declaration of dividend such provision does not detract from the predominant objective of the State Government in forming the Corporation, finances fully subscribed by the State, for the rapid and orderly industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mankind or all persons in a country or a state. It was further held that it is sufficient if the intention to benefit a section of the public as distinguished from a specified individual is present. The section of the community sought to be benefited must be sufficiently definite and identifiable by some common quality of a public or impersonel nature. 11. Needless to say that the facts of the case in hand fully answer to the requirements and the tests laid by the Summit Court. The beneficiaries in the present case would be anybody and everybody who is interested or concerned in the rapid industrial development of the State, without any distinction of caste, creed etc. This view also finds support from a decision of the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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