ITAT exempts Bombay Chamber of Commerce for rendering services in relation to commercial activities

Bombay Chamber of Commerce & Mackinnon Mackenzie (ITA No. 5832/Mum/2019)

Facts:

1. The assessee is a non-profit company incorporated in 1924, inter alia for the purposes of promoting and protecting the trade, commerce and manufacturers of India and in particular the trade, commerce and manufacturers of the Bombay Presidency.

2. The assessee is also engaged in activities which are in the nature of business by way of arranging seminars, collecting participation fees from the participants, interest income and sale of publications.

3. The last limb of Sec.2(15) being the advancement of any other object of general Public Utility’ shall not be regarded as Charitable purpose’ if it involves the carrying on of any activity in the nature of trade, commerce or business for a cess or fee or any other consideration.

4. Clause 4 of the Memorandum of Association of the company states that income and property derived shall be applied solely towards the promotion of the objects of the Association and no portion thereof shall be paid or transferred directly or indirectly by way of dividend or bonus or otherwise howsoever by way of profit to the persons who at any point of time have been members.

The ITAT held as below:

1. The theory or dominant or primary object of the trust has been treated to be the determining factor, even in regard to the advancement of any other object of general public utility, so as to make the carrying on of business activity merely ancillary or incidental to the main object.

2. The amounts received are not in nature of trade (since there is no exchange of goods either for goods in return or money) or commerce (since it is not engaged in purchase and sale of goods) or business (since the company is a non-profit making body formed with the promotion of protecting the trade, commerce and manufacture of India)

3. The assessee is therefore entitled for income tax exemption under section 11 of the Act.