9911796707
TMI Blog1978 (8) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... s exempted under provisions of s. 11 r/w s. 2 (15) of the Income-tax Act, 1961 for the asst. yrs. 1974-75 and 1975-76". In our opinion, the above question of law is not referable for the following reasons. 2. For the asst. yrs 1974-75 and 1975-76, the ITO struck a different path from that adopted in the earlier assessments and withheld exemption under s. 11 to the assessee for these years. The reason for withholding the exemption stemmed from the fact that the decision of the Tribunal, which was against the Departmental in the earlier years, was pending in reference before the High Court at Bombay. The ITO computed the total income for the asst. yr. 1974-75 at Rs. 25,119 which included property income of Rs. 3,289 and income from othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise dealers dealing in retail cloth, hosiery, ready made garments, etc., to promote in them the spirit of cooperation and to take various steps for the furtherance of their business interests (2) to study all relevant economic and commercial problems, make the members aware of them and to give them proper guidance and directions (3) to collect necessary information about the tax on trade of Mill Cloth of different qualities and all other textile goods and to supply the requisite information to the various members in the interests of their trade. It has been clearly found by the Tribunal in the earlier years that the prime object of the assessee is to organise dealers dealing in retail cloth, hosiery, goods etc., and not to carry on any trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 per cent of the ex-mill price of the cloth purchased by the approved shops in order to meet the administrative and other incidental expenses in connection with the working of this scheme. 8. On a careful perusal of the constitution of the Federation as well as the details of the "Approved Cloth Shops Scheme", we have not doubt in our mind that the conclusion of the Tribunal for the earlier years that the prime object of the Federation was only to organise the dealers in retail cloth, hosiery goods etc., and that the Federation was not formed with a view to carrying on a trade activity for profit making is unassailable. Everything depends on the purpose for which the activities are undertaken. The mere fact that some activities result i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions or even to outsiders on occasions would not take on the character of business especially in the light of the aims and objects of the Federation. After all, the assessee has to have some income in order to preserve itself and to continue to function and further the purposes for which it was brought into existence. Therefore, we have to look at the activities carried on by the assessee in their proper perspective and view them in a proper light. 10. The two decisions of the Supreme Court relied upon by the Departmental representative are not at all in conflict with the claim of the assessee. Krishna Iyer, J. Has observed in the case of the Indian Chamber of Commerce, the Revenue cannot go into meticulous mathematics and charge every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before the Madras High Court happened to be the South Indian Film Chamber of Commerce which was an instrument of the Government for the purpose of ensuring certain standards in the matter of storage of films or distribution thereof. The Madras High Court emphasised that if the assessee itself indulged in an activity of a trading nature, it could legitimately be said that the activity was dropped to the profits derived from it. The facts in the present case bear a close parallel to the facts in the case of South Indian Film Chamber of Commerce. In fact, the distilled essence of the two Supreme Court decisions (101 ITR 234 and 101 ITR 796) has been taken out by the Madras High Court in the following manner in the aforesaid decision at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not warrant any re-consideration. We, therefore, hold that the AAC's decision is right and needs no interference. 12. In the result, the appeals are dismissed". 13. From and out of the aforesaid facts, it would be clear that the Tribunal had come to its conclusion in the light of the principles laid down by the Supreme Court in the two decisions cited above. It has held that it had no reason to differ from the view taken by the Tribunal for the earlier years. The Department has not challenged the finding of the Tribunal on the ground that it is unreasonable or perverse or on the ground that the Tribunal had taken irrelevant materials into account or ignored relevant factors. Therefore, the decisions of the Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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