9911796707
TMI Blog2015 (12) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... cquisition of assets as application of income in earlier years and the value of the assets on which depreciation claimed has been fully allowed as expenditure or application in the earlier years that cannot be any claim of depreciation once again. The present claim of depreciation cannot be a double deduction over and above the fully value of the assets, if it was granted as application of income in earlier years. With these observations, this ground is allowed for statistical purposes. Taxability of interest income, it is to be taxed under the head "income from other sources" and it is not an exempted income and there is no reason to exempt the same from taxation as the assessee is not entitled exemption u/s.11 of the Act, in view of the judgment of the Supreme Court in the case of Bangalore Club v. CIT (2013 (1) TMI 343 - SUPREME COURT ). - ITA Nos. 210 & 211/Mds/2014 - - - Dated:- 6-11-2015 - Chandra Poojari, AM And Challa Nagendra Prasad, JM For the Appellant : Shri A Kanakaraj, CA For the Respondent : Shri M Srinivasa Rao, CIT ORDER Per Chandra Poojari, Accountant Member These appeals by the assessee are directed against the common order of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;murasoli' newspaper amount to advancement of any other object of general public utility involving the carrying of an activity in the nature of trade, commerce or business and taxing the entire income without granting exemption u/s.11 of the Act. According to the ld. AR, the assessee is engaged in various activities, which are given below : (i) to improve and spread tamil language, literature and culture and also to take steps to make tamil as effective medium of communication for the modern age and to create and enhance public awareness among the common man so as to make them as good and effective citizens of an enlightened democratic society by inculcating general knowledge. (ii) To utilize modern equipments, innovations and technologies like television, audio, video and radio and other electronic media for effectively achieving the above object. (iii) To publish and run newspapers, magazines and other communication media like books, pamphlets and the like for the above said objects with which the trust is founded. (iv) To run and administer educational institutions for the benefit of all people; such educational institution may also be in regard to arts, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be granted. For this purpose, the ld. AR relied on various decisions, which are kept on record. 5. On the other hand, the ld. DR submitted that activity of publishing of newspaper carried on by the assessee is a commercial one. Being so, the assessee cannot be granted exemption u/s.11 of the Act. 6. We have heard both the parties and perused the material on record and various case law cited by the parties. Sec. 11 of the Act stipulates that the income from property held for charitable or religious purpose shall not be included in the total income of the previous year of the person in receipt of the income to be given effect in the manner as specified therein. The term 'charitable purpose' has not been defined under the statute; but for the inclusive nature of the term as specified under s. 2(15) of the Act, which as existed before the amendment is as follows : Sec. 2(15) : Charitable purpose includes relief of the poor, education, medical relief and the advancement of any other object of general public utility. As per s. 2 of the Finance Act, 2008, the said provision was amended adding a 'proviso' w.e.f. 1st April, 2009 as follows : Provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liament and hence I propose to amend the law to exclude the aforesaid cases. Genuine charitable organizations will not in any way be affected (para 180). 6.3 The learned counsel pointed out that, the amendment was brought about as a measure of rationalization and simplification, streamlining the definition of charitable purpose and not as a measure of taxation. It is also stated that the concept of charity in India is wider, simultaneously adding that, by virtue of the amendment, the position that existed prior to 1st Feb., 1984 has been brought back and that is all. This however will not tilt the balance in any manner in the case of the assessee so as to take the activities outside the charitable purpose, particularly in view of the fact that in publishing of newspaper will not constitute any trade or business. According to the ld. AR, to perform charity, income is inevitable and contended that the activities being pursued by the assessee may constitute a trade or business, if it is not applied for the purposes of charity. Contrary to this, the ld. DR submitted that though the object of the assessee is to carry on charitable activities, but it does not carry those charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade, commerce or business as they appear in the second limb of cl. (b) are in connection with the service referred to the trade, commerce or business pursued by the institutions to which the service is given by the assessee. If the said words are actually in respect of the trade, commerce or business of the assessee itself, the said clause [second limb of the stipulation under cl. (b)] is rather otiose. Since the activity of the assessee involving any trade, commerce or business, is already excluded from the charitable purpose by virtue of the first limb [cl. (a)] itself, there is no necessity to stipulate further, by way of cl. (b), adding the words or any activity of rendering any service in relation to any trade, commerce or business .................. . As it stands so, giving a purposive interpretation to the statute, it may have to be read and understood that the second limb of exclusion under cl. (b) in relation to the service rendered by the assessee, the terms any trade, commerce or business refers to the trade, commerce or business pursued by the recipient to whom the service is rendered (as there may be a situation involving in publishing of newspaper. 6.6. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of IGH and WWH is a business incidental to the attainment of the objectives of the trust or not. By any stretch of imagination, it is not possible to hold that the business of running IGH and WWH are incidental to the above stated objectives of the assessee-trust. Incidental means offshoot of the main activities; inherent by-product of principal activities. Activities to compliment and support the main objectives are not in the nature of incidental to the business. They are supporting activities, at the maximum. The genesis of incidental activities must be from the principal activities themselves. There cannot be one source for the principal activities and another source for incidental activities. In the present case, even if activities of the assessee were stated to be relief of poor, medical relief and education, it was not possible to conclude that running of business in the form of IGH and WWH were business incidental to the carrying on of main objective of the assessee-trust. Therefore, the assessee is not protected by the provision stated in section 11 (4A), either. 6.7. Thus, as observed earlier, publishing of newspaper is a commercial line w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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