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TMI Blog2004 (10) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... dental Meditation. It is registered under the Societies Registration Act as well as under section 12A(e) of the Income-tax Act. During the year under consideration, it derived income from rent and interest as well as from agricultural and dairy activities. It filed its return of income for the year under consideration on 30-10-1995 which was accompanied by audit report in Form No. 10-B. In the said return of income, exemption was claimed by the assessee under section 11 and an option under section 11(2) was also exercised by filing Form No. 10. During the course of assessment proceed- ings, it was noticed by the Assessing Officer from the income and expenditure account filed by the assessee alongwith its return of income that the expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing its claim for exemption under section 11, the assessee-society preferred an appeal before the learned CIT(A) and after considering the submissions made on its behalf before him as well as the material available on record, the learned CIT(A) agreed with the stand of the assessee-society that use of its property by another charitable trust is also a charitable activity carried on by the assessee-society. He further held that the Assessing Officer having not pointed out any violation as enumerated in section 13, the exemption under section 11 could not be denied to the assessee-society. He also held that the assessee-society having complied with the relevant provisions by filing Form No. 10, it was entitled to accumulate the income for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He also contended that such use by the other societies cannot be equated with the donation given by one charitable trust to other charitable trust and the learned CIT(A), therefore, was not justified in extending the analogy laid down in the various judicial pronouncements in the context of donations for allowing relief to the assessee on this issue. He also contended that the objects of the assessee-society as set out in its memorandum of association were very specific and since its income earned during the year under consideration was not applied for the furtherance of the said objects, it was not eligible for exemption under section 11 as rightly held by the Assessing Officer. He further contended that allowing its property to be used b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure incurred by the assessee-society on agricultural and dairy operations was never considered by the learned CIT(A) as application of its income for charitable purpose and since there was enough income earned by the assessee-society from the respective sources to cover up the said expenditure, there was no question of treating the same as application of its income by the assessee-society. The learned counsel for the assessee also submitted that in the similar facts and circumstances involved in the previous year relevant to assessment years 1992-93 and 1993-94, the Department has allowed the claim of the assessee for exemption of its income under section 11. He also placed on record copies of assessment orders for the said years at pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Gujarat High Court in the case of Sarladevi Sarabhai Trust No. 2 (supra) and of Hon'ble Calcutta High Court in the case of Hindusthan Charity Trust (supra). 7. In the present case, the property, i.e., building held under trust by the assessee's society was allowed to be used by it to other societies working for the same aims and objects for which it was formed and since the same undisputedly were of charitable nature, we do not see any reason why the analogy of the aforesaid judicial pronouncements can be extended to hold that such use of the buildings of the assessee-society by the other societies working for the same aims and objects could be construed as its charitable activities. Even in the Circular No. 1132 issued by the CBDT on 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's appeal. 8. As regards the other issue raised by the revenue relating to the expenditure on agricultural and dairy operations being treated by the learned CIT(A) as application of income, it is observed that no such decision was expressly rendered by the learned CIT(A) in his impugned order. However, the amount of income claimed to be applied by the assessee-society for charitable purposes during the year under consideration to the extent of Rs. 2,87,498 as certified by the auditor also included an amount of Rs. 86,675 incurred by the assessee on agricultural and dairy expenses and this claim of the assessee was allowed by the learned CIT(A). In this regard, it is observed that agricultural and dairy activities were being carried on by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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