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TMI Blog2024 (7) TMI 1483X X X X Extracts X X X X X X X X Extracts X X X X ..... by the State Legislature dated 07.12.1987 (Act No. 49 of 1987) for providing death benefits to the family members of the deceased advocates, who have joined as member in the said scheme. The source of income for the said scheme is income generated through sale of welfare fund stamps, life time subscription from members, interest on corpus deposits and Government grant. Section 16 of the Advocate s Welfare Act, 2001 deals with the Recognition of the Association by the State Bar Council and nothing has been mentioned therein regarding the prior approval from the Bar Council of India before forming a welfare fund. Since, the assessee fund is enacted prior to the formation of the Central Act namely Advocate s Welfare Fund Act, 2001 and the savi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh it is in the nature of trade or business when the gross receipts exceeds Rs. 25 lakhs. ITA No: 699/Chny/2024: 3. The brief facts of the case are that, the Tamil Nadu Advocates Welfare Fund (TNAWF) was created u/s. 6(2) of the Advocates Act 1961 and constituted by the state legislature under the Tamil Nadu Advocates Welfare Fund Act 1987(Act No.49 of 1987) as Tamil Nadu Advocates Welfare Fund Trust Committee. The Welfare fund committee was constituted to provide for welfare fund to advance the Profession of advocacy in the state of Tamil Nadu by extending the benefit to the advocates on cessation of practice and for other instances and matters connected therewith. Tamil Nadu state was one of the first to introduce such a fund arising from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding as under: 6.1 Since the proviso to section 2(1 is invoked, the provisions of sections 11 12 become inoperative. The entire receipts including voluntary contribution is the income of the society. While the revenue expenditure corresponding to such income earning activity is alone allowed, expenses of capital nature and expenditure not connected to the income earning activity like accumulations for future use by the Trust, disbursements of charity In the form of Settlement of Claims (Rs. 3,34,11,976), Voluntary Cessation claims (Rs. 5,72,000) and Medical Aid (Rs. 72,500) are not eligible to be allowed as expenditure. This is because, Section 11 has become redundant In the case under consideration. Also, depreciation is not allowable, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the ld.CIT(A) has erred in allowing the exemption u/s. 11 of the Act to the assessee even though the sale of welfare fund stamps to the members as well as general public that overriding the profit motive is inconsonance with first proviso to section 2(15) of the Act. The ld.CIT(A) failed to appreciate that the assessee has received an amount of Rs. 1.53 crores in the form of trading receipts and sale of welfare fund stamps during the period without incurring much expenditure on the same. Therefore, the order of the ld.CIT(A) is bad in law and prayed for setting aside the order and to confirm the order of the Assessing Officer. 7. Per contra, the ld.AR stated that the Tamilnadu Advocates Welfare Fund has been established u/s. 6(2) of Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicability of the Central Act to the State of Tamilnadu. Therefore, as per section 23 of the Central Act, the Advocate s Welfare Fund is exempt from Income-tax and prayed for dismissing the appeal of the revenue and confirm the order of the ld.CIT(A). 9. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. It is an admitted fact that the Tamilnadu Advocate s Welfare Fund Act, 1987 was created by the State Legislature dated 07.12.1987 (Act No. 49 of 1987) for providing death benefits to the family members of the deceased advocates, who have joined as member in the said scheme. The source of income for the said scheme is income generated through sale of welfare fund st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Welfare Fund of the State against the provisions of section 11 and section 2(15) of the Act is not applicable to the Tamilnadu Advocates welfare Fund. Therefore, we are of the considered view that the assessee is exempted from income-tax and uphold the order of the ld.CIT(A) and hence, dismiss the appeal of the revenue. ITA NO: 700/CHNY/2024: 10. An identical issue has been considered by us in ITA No. 699/Chny/2024 for assessment year 2013-14. The facts are identical for the impugned assessment year 2014-15 also. The reasons given by us in preceding paragraph in ITA No. 699/Chny/2024 for assessment year 2013-14, shall mutatis mutandis apply to this appeal as well. Therefore, for similar reasons, we dismiss the appeal filed by the revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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