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TMI Blog2016 (7) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... t 1961 which is applicable from the assessment year 2009-10 in which there is provision for charging tax if total receipt of entities engaged in advancement of general public utility exceeds Rs. 10 lakh. The assessee has shown excess of income over expenditure of Rs. 19,69,28,027.00 by sales of Plots, shops and flats and its activities are in the nature of trade, commerce or business and amended provision of Section 2(15) of the Income Tax Act, 1961 is squarely applicable in this case. 2. That the Ld. Commissioner of Income Tax (appeal), Barreilly has erred in law as well as in facts by not considering the case of M/s Safdurjung Enclave Educational Society Vs. Municipal Corporation Delhi (1992) 3 SCC 390, in which the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e/acquires land and sale them after making development thereon. It has also constructed house/flats/shops etc. on such plots and sold the same at marketable competitive price. Prima facie such activities appear to be commercial activities akin to those carried out by the property dealers, Builders and Developers. Reliance was also placed on the decision of the Hon'ble Supreme Court in the case of M/s Safdurjung Enclave Education Society Vs. Municipal Corporation Delhi (1992) 3 SCC 390, in which it has been held that the activities run on commercial lines do not fall within the ambit of charitable object. Assessment in this case was completed u/s 143(3) of Income Tax Act, 1961 vide Assessment Order dated 13/12/2011 on a total income of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... postulates that a charitable institution may have to carry on incidental business for attainment of its objective. The incidence of taxation is lifted where business is incidental to the attainment of objective & separate books of accounts are maintained. It has already been held that the business of construction is incidental to the attainment of the charitable objective of town planning. The only question to be seen is whether separate books of accounts are maintained for the construction activity. Only for this limited purpose the matter is set aside to the file of A.O. Thus the ITAT held that it was accepted that the assessee is engaged in a charitable purpose. Therefore it is entitled to deduction u/s 11. 6. The Ld. AR submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es will not be hit by the proviso to Sec 2 (15). The Ld. AR further submitted that even till date registration u/s 12A has not been cancelled by the department. Therefore, it will be very wrong on part of department to allege that the assessee is not entitled for exemption u/s 11 or the objects of the assessee are not charitable. 8. The Ld. DR relied upon the order of the Assessing Officer. The Ld. DR referred following case law and circulars:- 1. Jammu Development Authority Vs. Union of India, ITA No. 164/2012, judgment of Hon'ble High Court of Jammu and Kashmir. 2. M/s Jammu Development Authority Vs. CIT, Jammu, ITA No. 30 (Asr)/2011, decision of Hon'ble ITAT Amritsar Bench, Amritsar 3. CBDT Circular No. 11/2008, dated 19/12/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Safdarjung Enclave Educational Society Vs. Municipal Corporation, Delhi (1992) 3 SCC 390 but the same is not applicable in the case as the charitable purpose and object was never changed at any time in case of assessee herein. Thus, exemption u/s 11 rejected by the Assessing Officer is not just and proper. In assessee's own case for the preceding year and the subsequent year, the Co-ordinate Bench of the ITAT has allowed the appeal of the assessee. The Delhi High Court in its decision in the case of India Trade Promotion Organization (Supra) has clearly given the interpretation of Constitutional validity of the proviso to Section 2 (15) of the Act. The Hon'ble Delhi High Court held that the said proviso applies in a situation where the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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