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TMI Blog2018 (5) TMI 1775X X X X Extracts X X X X X X X X Extracts X X X X ..... g been issued to the members free of cost, the same cannot be treated as in the nature trade, commerce or business as envisaged in the proviso to section 2(15) and the income of the assessee from the said activity cannot be treated as its business income. Therefore, find merit in the contention of assessee that the A.O. was not justified in reclassifying the income of the assessee from the activity of publication of journals as business income and in making a disallowance u/s 40(a)(ia). CIT(A) is also not justified in holding that the fact of the assessee being the charitable organisation is of no relevance for the applicability of section 40(a)(ia). Hon’ble Bombay High Court in the case of Bombay Stock Exchange vs DDIT [2014 (6) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure for printing of the said journal was claimed to be financed from sponsorship fees. In the return of income filed for the year under consideration on 26.11.2013, surplus of ₹ 4,58,880/- was offered to tax by the assessee. During the course of assessment proceedings, it was noticed by the A.O. that the assessee has paid printing charges of ₹ 41,59,000/- to M/s. Reed Elsevier India Pvt. Ltd. without deduction of tax at source as required under section 194C. In this regard, it was explained by the assessee that there was no business carried on by it and the surplus generated from the activity of publication of journal was shown under the head income from other sources . It was contended on behalf of the assessee before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surplus from the said activity as business income instead of income from other sources and making a disallowance u/s 40(a)(ia) for non-deduction of tax at source from the payment of printing charges. The Ld. CIT(A) did not find merit in this contention of the assessee. He held that the assessee being a charitable organisation was of no relevance for the applicability of section 40(a)(ia) and the A.O., therefore, was fully justified in invoking the said provision to make the disallowance. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal. 4. I have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the assessee in the present case i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity cannot be treated as its business income. I, therefore, find merit in the contention of the learned counsel for the assessee that the A.O. was not justified in reclassifying the income of the assessee from the activity of publication of journals as business income and in making a disallowance u/s 40(a)(ia). 5. In my opinion, the Ld. CIT(A) is also not justified in holding that the fact of the assessee being the charitable organisation is of no relevance for the applicability of section 40(a)(ia). As pointed out by the learned counsel for the assessee, this view taken by the Ld. CIT(A) is contrary to the decision of the Hon ble Bombay High Court in the case of Bombay Stock Exchange vs DDIT 365 ITR 181 wherein it was held that wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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