2017 (10) TMI 1410

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..... various invitees could be considered as a commercial activity. Before any activity can be branded as being in the nature of trade or commerce, the AO has to demonstrate the intention of parties Backed with facts and figures of carrying out activities with profit motive. Mere surplus from any activity, which undisputedly has been undertaken to achieve the dominant object, does not imply that the same is run with profit motive. The intention has to be gathered from circumstances which compelled the carrying on an activity. The primary object of insertion of proviso to section 2(15) was to curb the practice of earning income by way of carrying on of trade or commerce and claiming the same as exempt in the garb of pursuing the alleged charit .....

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..... mstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of depreciation of ₹ 2,55,61,000/- to the assessee in view of the recent decision of the Hon'ble Delhi High Court in the case of DIT(E) Vs. Charanjiv Charitable Trust dated 18.03.2014. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the provision for doubtful debts amounting to ₹ 1,62,000/- as allowable expense. 5. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 3. As regards to Ground No. 1, the ld. Counsel for the assessee at the very outset sated that this issue is squarely covered in assessee s favour vide .....

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..... ade or commerce, the AO has to demonstrate the intention of parties Backed with facts and figures of carrying out activities with profit motive. Mere surplus from any activity, which undisputedly has been undertaken to achieve the dominant object, does not imply that the same is run with profit motive. The intention has to be gathered from circumstances which compelled the carrying on an activity. In the present case, ld. counsel has clearly demonstrated that surplus was generated from interest income and not from catering or hostel activities. Therefore, the objection of ld. DIT(E) does not survive on this count also. 8.18. The primary object of insertion of proviso to section 2(15) was to curb the practice of earning income by way o .....

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