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TMI Blog2022 (6) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... at the micro finance activity of the assessee falls under the category of relief of the poor and not under the category of advancement of any other object of general public utility within the meaning of sec.2(15) of the Act. It is accordingly held that the first proviso to sec.2(15) is not applicable to the case of the assessee. Consequently, it is held that the assessee is eligible for exemption u/s 11 of the Act. Hence, the AO is directed to allow exemption u/s 11 of the Act. These grounds of appeal are therefore allowed. Disallowance of capital grant expenses, loans write off expenses, loss on sale of bus, loss on valuation of fixed assets and Gradatim software expenses debited to income and expenditure account in the nature of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in short Act ) and engaged in rendering community development services. The assessee filed it s return of income for the A.Y.2010-11 on 20.09.2010 admitting excess of expenditure over income of Rs.1,87,34,946/-. The assessment u/s 143(3) was completed on 31.03.2013 determining total income at Rs.3,90,51,200/-. In the assessment order, the Assessing Officer (AO) held that the assessee is not eligible for exemption u/s 11 of the Act and made various disallowances while computing the income chargeable to tax. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A), the main contention of the assessee was that the AO is not correct in holding that the assessee is not eligible for exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is an activity in the nature of trade, commerce or business, attracting the proviso to section 2(15) of the l.T.Act which is an activity in the nature of trade, commerce or business, attracting the proviso to section 2(15) of the I.T.Act, thereby rendering it to be a non-charitable activity and therefore not eligible for exemption u/s.11. 4. The Ld.CIT(A) erred in law in deleting the addition made by the AO amounting to Rs.8,14,402/- towards loans written off on the fact that the assessee has not made any effort to recover the loan amounts relating to the deceased persons from the respective mutual guarantors. 5. The Ld.CIT(A) erred in Law in deleting the addition made by the AO amounting to Rs.2 I ,704/- towards Loss on sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on the decision of ITAT, Bangalore, hence, this Hon ble Tribunal may be pleased to confirm the orders passed by the AO. 6. On the other hand, the Ld.counsel for the assessee submitted that the AO denied exemption u/s 11 of the Act to the assessee on the ground that the activity of micro financing carried out by the assessee falls under the scope of advancement of any other object of general public utility and not relief of the poor within the meaning of section 2(15) of the Act and also since the receipts from the said activity which is in the nature of trade, commerce or business exceeded the specified limit of Rs.10 lakhs, the first proviso to the said section laying down that advancement of any other object of general public utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the micro finance activity of the assessee falls under the category of relief of the poor and not under the category of advancement of any other object of general public utility within the meaning of sec.2(15) of the Act. It is accordingly held that the first proviso to sec.2(15) is not applicable to the case of the assessee. Consequently, it is held that the assessee is eligible for exemption u/s 11 of the Act. Hence, the AO is directed to allow exemption u/s 11 of the Act. These grounds of appeal are therefore allowed. Considering the ratio laid down by the ITAT as well as the Hon ble High Court of Andhra Pradesh, we hold that the Ld.CIT(A) has rightly passed the order and we do not find any infirmity in the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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