Commissioner of Income Tax vs Gordhandas Bhagwandas Charitable Trust

R. Jayasimha Babu, J.—The Tribunal followed an order made by it in another case where the facts are similar. That order was brought

before us in a reference and that reference was answered by us against the Revenue. The decision is in the case of Commissioner of Income Tax

Vs. Samyuktha Gowda Saraswatha Sabha, . It was held therein that the objects of the assessee were spreading education and other objects of

general utility. The letting out of the Kalyana Mandapam was not one of the objects of the assessee, but an activity carried on to fulfil the objects of

the trust. The income derived from the Sabha was not its business income, but its property income and, therefore, the provisions of Section 13(1)

(bb) of the IT Act, 1961, were not applicable.

In this case also the object of the trust is to provide medical relief to the poor and spread education. The income received by it by letting out the

Kalyana Mandapam is, therefore, income from property and not business income. The income of the assessee was, therefore, entitled to

exemption u/s 11 of the IT Act.

We, therefore, answer the question referred to us as to whether, on the facts and in the circumstances of the case, the Tribunal is right in law in

holding that the assessee is entitled to exemption in respect of amounts received from letting out of the marriage hall to the general public, in favour

of the assessee and against the Revenue.