Law:

Section:

Section 11, read with section 2(15) of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Assessment years 1967-68 and 1968-69 and 1970-71 to 1973-74 - Assessee association was established for protecting, safeguarding, guiding and furthering interest and welfare of merchants dealing in diamonds, bullion, jewellery, etc., and to create and encourage friendly feeling and unity amongst merchants - Assessee claimed exemption in respect of income received from survey charges, weightment charges and charges for arbitration - Whether since activities carried on by assessee were for benefit of general public and those were not conducted with a view to make profits assessee was therefore entitled to exemption under section 11 - Held, yes FACTS The assessee association was started for protecting, safeguarding, guiding and furthering the interest and welfare of merchants dealing in diamonds, bullion, manufactured gold and silverware and jewellery, and to create and encourage friendly feeling and unity amongst the merchants. For the assessment years 1967-68 and 1968-69, the assessee claimed exemption in respect of its income. The receipts of the assessee were from survey charges, weighment charges and charges for arbitration. The ITO rejected said claim as in his view, there was no advancement of any object of general public utility served by the association. On appeal, the AAC held that, the assesses' activities were of general public utility and that the income, therefore, was exempt under section 11. On further appeal the Tribunal upheld the order of the AAC by holding that the dominant object of the assessee was intended to benefit the cross-section of the public, as well as the merchants engaged in the jewellery and diamond trade and that if any charges were received for services, it was only incidental and not with a view to make any profit. On reference: HELD The finding of the Tribunal that the assessee was not conducting any activity for profit was clear from the order of the Tribunal. When the assessee was not pursuing any activity for profit, any surplus received could not be said to be assessable to tax by…

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