Assessee is engaged in processing of unusable gas cylinders, though there is nothing to indicate that the gas cylinders are completely ‘broken’; in fact, none of the processes stated to have be undertaken address the same. However, as apparent, it is only where the processing leads to a commercially new product that it can be said that manufacture has taken place.
We may without prejudice also examine the assessee’s claim of being a primary co- operative agricultural and rural development bank. The Revenue has rejected the assessee’s claim on the ground that it does not meet the definition thereof inasmuch as its area of operation is not confined to a Taluk (Explanation (b) of section 80P (4)). In this regard, we firstly observe that the assessee has not clarified if it is a member of the Rajasthan State Co-operative Land Development Bank and, if so, since when. Secondly, it has not shown that its principal object is to provide long term credit for agricultural and rural development activities, which constitutes the defining attribute of such a bank, with its object clause nowhere indicating so.
Section 80P is applicable to regional rural banks. This position is undisputed in the instant case as well. The only question is the exigibility to deduction thereunder of the impugned incomes. The word ‘investment’ occurring in the definition of ‘banking’ in section 5(b) of the Banking Regulation Act is of importance. Section 6(1)(a) of the said Act provides that apart from the business of banking, a banking company may engage, inter alia, in acquiring, holding, issuing on commission, under-writing, dealing in stock, funds, shares, debentures, debenture stock, bonds, obligations, securities and investments of all kinds.
Adverting to facts, the expenses under reference could not be strictly called ‘social welfare expenses’, and stood rightly considered as ‘donation. They are in fact toward promotion of activity in specific discipline, viz., music, flower growing – and that too of a particular variety, et. al., and rather in the nature of extending patronage thereto by sponsoring events (to that extent), showcasing talent therein, of interest and, consequently, visited largely by enthusiasts in those areas/disciplines.
The Commissioner (Appeals) considered the fact that there is no bar to purchase agricultural land on which house was to be constructed. The fact is that subject to the provisions of sub-section (4) of section 54F, where, in the case of an assessee being an individual or a HUF, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereinafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed,
Investment within 6 months is the investment for that financial year in which transfer has taken place. Hence, subsequent investment is to be considered as part of the investment of financial year in which transfer has taken place. We therefore, hold that the ld. CIT(A) was not justified in allowing deduction to the assessee to the extent of Rs. 1.00 crore u/s 54EC of the Act. We therefore, uphold the order of the AO.
Though vide Instruction no. 1/2006 dated 24-03-2006, it was clarified that trading units can be set up in the SEZ. However, the modification was made on 24-05-2006 in which it was made clear that the deduction u/s 10AA will be available in respect of the trading in the nature of re-export of imported good. Thus the assessees were promised that they will be eligible for deduction u/s 10AA of the Act in respect of the profit earning on trading of re-export of imported goods. The revenue has not been able to show us that such instruction was not withdrawn or the Board has issued instruction that instructin dated 24-05-206 from the Ministry of Commerce will not be applicable for the purpose of allowing exemption u/s 10AA of the Act. Hence, in view of the doctrine of promissory estoppel, we hold that the assessee is entitled to deduction.
A trust can claim exemption provided a specific position of income is applied for purposes of the Trust. Income includes capital gain and hence trust will lose exemption if such income is not applied.
The assessee-trust registered under section 12A and also approved under section 80G(5) was found to have more then 3/4th of of its total receipt for organizing ‘Bhagwat Katha’; section 80G(5B) limits expenditure on activities of religious nature to 5% of income for year; since expenditure in instant case exceeded 5% and violated section 80G(5B), approval under section 80G was withdrawn with observation that Bhagawat Katha is religious notwithstanding its public character and being open to all castes and religions.
A golden rule of interpretation is the contextual interpretation. A word has always to be interpreted only with the context with which, one is seized. Here we are concerned with the provisions of Sec.40(b) hence, the interpretation has to be done accordingly. Interpretation of the provisions otherwise or the way the Id. AO has done, if accepted, has the effect of rendering the very Explanation 3 totally nugatory or purposeless. Needless to say, that every word used by the legislature, is significant and cannot be lost sight of.
