| COURT: | Gujarat High Court |
| CORAM: | A. C. Rao J, JB Pardiwala J |
| SECTION(S): | 11, 12AA, 2(15) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Charitable purpose |
| COUNSEL: | J. P. Shah, Manish R Bhatt, S. N. Soparkar, Tushar P. Hemani |
| DATE: | September 27, 2019 (Date of pronouncement) |
| DATE: | October 25, 2019 (Date of publication) |
| AY: | 2004-05 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 2(15)/11 "Charitable Purpose": The fact that the carrying on of charitable activities results in a surplus does not mean that assessee exists for profit. “Profit” means that owners have a right to withdraw the surplus for any purpose including personal purpose. However, if the surplus is ploughed back into the same charitable activities, the assessee cannot be said to be carrying out commercial activities in the nature of trade, commerce or business. The fact that the assessee has dealings with, & share of profits from, BCCI (a commercial entity) does not affect its charitable status | |
It is not in dispute that the three Associations have not distributed any profits outside the organization. The profits, if any, are ploughed back into the very activities of promotion and development of the sport of cricket and, therefore, the assessees cannot be termed to be carrying out commercial activities in the nature of trade, commerce or business.(iii) It is not correct to say that as the assessees received share of income from the BCCI, their activities could be said to be the activities of the BCCI. Undoubtedly, the activities of the BCCI are commercial in nature. The activities of the BCCI is in the form of exhibition of sports and earn profit out of it.However, if the Associations host any international match once in a year or two at the behest of the BCCI, then the income of the Associations from the sale of tickets etc., in such circumstances, would not portray the character of commercial nature
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