Law:

Section:

Section 2(15), read with section 11, of the income-tax Act, 1961 [corresponding to section 4(3) of the indian income-tax Act, 1922]-Charitable purpose-Assessee's objects included protection of interests of members carrying on trade in specified commodities-Its entire capital and income was to be applied solely to its objects and was distributable amongst its members only on winding up-Whether assessee was established for charitable purpose and entitled to exemption from tax-Held, on facts, yes Facts The assessee-company was incorporated prior to 1926. and its objects were, inter alia, (i) to promote and protect the interests of all merchants carrying on business, especially in seeds, and to regulate their business methods and remove all causes of friction between such merchants inter se and between them and their constituents ; (ii) to her the cause of unity and friendliness amongst them ; (iii) to collect and disseminate statistical and other information and to make efforts for the spread of commercial and economic knowledge ; (iv) to prescribe principles of framing contracts with a view to eliminate speculative manipulation ; (v) to act as mediators or arbitrators in all mutual disputes ; (vi) to represent and express opinions on questions and dealings arising out of the business transactions and promotion or opposition of any legislative or other measures affecting Indian Trade ; (vii) to provide decision to establish business precedents ; (viii) to promote and cultivate friendly feelings amongst the members and to advance their welfare and the welfare of the trade ; (ix) to run a clearing house for regulating the members dealing transactions ; and (x) to print and publish any newspaper, journal, pamphlet, etc. The property, capital and income of the chamber, was required to be applied solely towards the promotion of specified objects and no portion was payable by way of bonus or otherwise to the members, except in the case of winding up of the chamber. For the assessment years 1960-61 to 1963-64, the assessee claimed exemption from income-tax on the income derived from its immovable property on the ground (i) that the same was derived from a property held…

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