ITO, Chandigarh V. Improvement Trust, Rajpura

ITA 1306/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7021 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 08-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1306 & 1307/CHD/2016 ASSESSMENT YEAR: 2013-14 THE ITO VS. IMPROVEMENT TRUST, RAJPURA WARD (EXEMPTION) ROTARY CLUB ROAD, RAJPURA CHANDIGARH PAN NO. AAATI4964R (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PARIKSHIT AGGARWAL REVENUE BY : SMT. CHANDRAKANTA DATE OF HEARING : 29/06/2017 DATE OF PRONOUNCEMENT : 01/08/2017 ORDER PER B.R.R. KUMAR A.M. BOTH THESE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), PATIALA DT. 26/09/2016 ON THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE APPEAL OF THE ASSESSEE BY APPLYING THE RATIO LAID DOWN IN HON'BLE ITAT, AMRITSAR DECISION IN THE CASE OF HOSH IARPUR IMPROVEMENT TRUST IN ITA NO. 200/ASR/2010 AND 336/ASR/2014 AND THUS HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION U/S 11 AND IS COVERED BY THE ADVANCEMENT OF GENERAL PUBLIC UTILITY. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE APPEAL IGNORING THE TRUE INTENT BEHIND THE PROVISO TO SECTION 2(15) WHICH PROVIDES THAT AN ENTITY FORMED FOR THE ADVANCEMENT OF GENERAL PUBLIC UTILITY SHALL CEASE TO BE CHARITABLE IF ITS RECEIPTS FROM THE BUSINESS/COMMERCIAL ACTIVITIES EXCEEDED SPECIFIED L IMITS IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OF THE INCOME FROM SUC H ACTIVITY. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) HAS ERRED IN INTERPRETING THE PROVISIONS OF SECTION 2(1 5) VIZ A VIZ THE FACTS OF 1 ASSESSEE CASE AND ALLOWING THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE'S ACTIVITIES WERE NOT FOR PROFIT MOTIVES WHEREAS PROV ISO TO SECTION 2(15) DOES NOT CONTAIN SUCH CONDITION. THE PROVISO ONLY SAYS AN AS SESSEE ENGAGED IN- TRADE/BUSINESS/COMMERCIAL ACTIVITIES OR RENDERS ANY SERVICE IN RELATION TO SUCHJ ACTIVITIES FOR CESS OR FEE SHALL NOT BE CHARITABLE IF ITS RECEIPTS FROM SUCH ACTIVITIES EXCEED SPECIFIED LIMITS. THUS GRANT OF EXEMPTION IS NOT DEPENDENT ON EXISTENCE OF PROFIT MOTIVE. AN ENTITY INCURRING LOSS ON SUCH ACT IVITY IS ALSO LIABLE TO LOSE EXEMPTION IF ITS RECEIPTS EXCEED SPECIFIED LIMITS. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOU T GIVING FINDINGS ON ASSESSING OFFICER'S AVERMENT THAT THE ASSESSEE WAS ENGAGED IN SALE PURCHASE OF PROPERTIES AND WAS THUS COVERED BY THE PROVISO TO SECTION 2(15 ). IN THE RELIED UPON JUDGEMENT THERE IS NO FINDING TO THE EFFECT THAT SU CH ACTIVITIES ARE NOT OF COMMERCIAL/BUSINESS NATURE. 2 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE JUDGEMENT OF THE J URISDICTIONAL TRIBUNAL IN THE CASE PUDA VS. CIT REPORTED AS (2006) 103 TTJ CHD 98 8, IN WHICH THE HON'BLE TRIBUNAL HAS HELD THAT THE ACTIVITIES OF THE PUDA A RE OF COMMERCIAL NATURE AND THUS NOT ENTITLED TO EXEMPTION. THE LD CIT(A) HAS F AILED TO TAKE NOTE THAT BOTH PUDA AND THE ASSESSEE ARE ENGAGED IN IDENTICAL ACTI VITIES. 2. SINCE THE ISSUE IS INVOLVED IN BOTH THE APPEALS ARE IDENTICAL THEREFORE THE APPEALS ARE BEING DISPOSED OF TOGETHER FOR THE SAKE OF CONVENIENCE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS AN ARTIFICIAL JURIDICAL PERSON HAVING INCOME FROM PLANNING, DEVELOPMENT AND IMPROVEMENT OF NABHA CITY. THE APPELLANT HAS BEEN GRANTED REGISTRA TION U/S 12AA OF THE IT . ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER OBSERVED THAT THE APPELLANT IS CARRYING ON BUSINESS OF SALE & PURCHAS E OF RESIDENTIAL PLOTS AND COMMERCIAL PROPERTIES BY AUCTION AND EARNED HUG E NET PROFIT OF RS.98,07,285/- DURING THE YEAR UNDER CONSIDERATION, WHICH IS IN NATURE OF TRADE, COMMERCE AND BUSINESS , BUT DOES NOT FALL WITHIN THE MEANING OF WORDS 'THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' U/S 2(15) OF THE INCOME TAX ACT, 1961. HOWEVER, THE APPELLANT TRUST HAS STATED DURING ASSESSMENT PROCEEDINGS THAT IT IS NOT CARRYING ON A NY BUSINESS ACTIVITY BUT THE OBJECT OF TRUST IS PLANNING, DEVELOPMENT AND IMPROV EMENT OF CITY. THE ASSESSEE TRUST IS AN IMPROVEMENT TRUST CONSTITUTED UNDER THE PROVISIONS OF PUNJAB TOWN IMPROVEMENT TRUST, 1922 AND THE PRINCIPAL OBJECTS O F THE TRUST IS TO-BRING OUT IMPROVEMENT IN THE TOWN BY PROVIDING STREETS, HOUSING FACILITIES O R MAKING PROVISION FOR DRINKING WATER ETC. FOR THE BENEFIT OF GENERAL PUBLIC AND THE ACTIVITIES ARE CHARITABLE IN NATURE IN VIEW OF SECTION 2(15) OF THE ACT AND THE SAME WAS ENTITLED TO REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961. 4. LD. CIT(A) HELD IN HIS ORDER AS UNDER: 5.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT HAD GIVEN DETAILED SUBMISSIONS. IT HAS BEEN CONTENDED B Y THE APPELLANT THAT THE ENTIRE ISSUE IS COVERED BY THE DECISION OF HON'BLE ITAT AMRITSAR BENCH, AMRITS AR, IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST VS. INCOME TAX OFFICER, WARD 1, HOSHIARPUR ITA NOS.200/ASR / 2010 AND 336/ASR/2014-FOR ASSESSMENT YEARS: 2005-06 AND 2009 - 10 DATED 10.09.2015 WHEREIN FULL RELIEF HAS BEEN ALLOWED TO THE APPELLANT. 3 5.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE C OUNSEL OF THE APPELLANT AS ALSO THE REASONING OF THE ASSESSING OFFICER GIVEN IN ASSESSMENT ORDER. I HAVE PERUSED THE ABOVE CITED JUDGMENT OF THE HON'BLE ITAT, AMRITSAR IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST VS. INCOME TAX OFFICER, WARD 1, HOSHIARPUR (2 015) 173 TTJ 273 (AMRITSAR) . THE CASE RELIED ON BY THE COUNSEL OF THE APPELLANT IS IDENTICAL ON FACTS AND CIRCUMSTANCES WITH THE PRESENT APPEAL AND HENCE THE RATIO LAID DOWN THEREBY IS APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF THE INSTANT APPEAL AS WELL. THE RELEVANT PORTION OF THE JUDGMENT OF HON ' BLE ITAT IS REPRODUCED AS UNDER:- '36. LEARNED DEPARTMENTAL REPRESENTATIVE HAS POINTE D OUT THAT THE COMMERCIAL PLOTS AND UNITS ARE AUCTIONED OFF WHICH SHOWS THAT THE IDEA IS TO MAKE MAXIMUM PROFITS BUT WHAT HE CLEARLY OVERLOOKS IS THE FACT T HAT SINCE IT IS NOT A DESIRABLE STATE OF AFFAIRS FOR THE STATE TO SUBSIDIZE BUSINESSES, A ND TO ENSURE HIGHEST DEGREE OF TRANSPARENCY IN MAXIMISING RETURNS FROM PUBLIC ASSE TS, COMPETITIVE BIDDING FOR COMMERCIAL UNITS IS A SAFE OPTION, AND THAT THE USE OF BIDDING PROCESS IS JUSTIFIED FOR THE LARGER CAUSES. THE BIDDING PROCESS ENSURES TRAN SPARENCY IN FUNCTIONING OF THE IMPROVEMENT TRUSTS AND THAT, BY ITSELF, DOES NOT MA KE THE FUNCTIONING OF THE IMPROVEMENT TRUST A COMMERCIAL VENTURE. IT IS ALSO IMPORTANT THAT THIS USE OF BIDDING PROCESS IS ONLY IN THE CONTEXT OF COMMERCIA L UNITS ETC. THE DEVELOPMENT OF COMMERCIAL AREAS IS IN THE INTEREST OF PLANNED GROW TH OF AN AREA AND WHEN SUCH COMMERCIAL-AREAS DEVELOP, ALL THE STAKEHOLDERS IN T HE DEVELOPMENT OF THAT AREA BENEFIT. IN ORDER OF THIS BENEFIT TO THE COMMON CAU SE, IT IS NOT NECESSARY THAT THE BUSINESSMEN, BUYING SUCH UNITS, MUST ALSO BENEFIT. THE DENIAL OF ANY ADVANTAGE, AT THE COST OF GENERAL PUBLIC, TO THE BUSINESS ENTITIE S BUYING THE COMMERCIAL AREAS, IN OUR CONSIDERED VIEW, DOES NOT AMOUNT TO DEFEATING A N OBJECT OF GENERAL PUBLIC UTILITY. IN THIS CONTEXT, IT IS IMPORTANT TO UNDERS TAND THE BENEFIT FROM DEVELOPING COMMERCIAL AREAS, WHICH IS FOR PUBLIC GOOD, AND BEN EFIT TO THE BUSINESS PERSONS IN BUYING THESE UNITS FROM THE ASSESSEE TRUST, WHICH C AN ONLY BE FOR THE GOOD BENEFIT OF THESE ENTREPRENEURS. AS FOR THE SALE OF RESIDENT IAL UNITS, IT IS AN ADMITTED POSITION THAT IN TERMS OF THE PUNJAB TOWN IMPROVEMENT (UTILI ZATION OF LAND AND ALLOTMENT OF PLOTS) RULES, 1983, THERE IS A FORMULAE ON THE BASI S OF WHICH THE PRICE IS WORKED OUT. LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT DISPUT E THAT ASPECT BUT HE ALLEGES PROFIT MOTIVE EMBEDDED IN THIS FORMULA AS S HOWN BY ADJUSTMENTS FOR (A) CONSERVANCY CHANGES FOR 5 YEARS @ 10% PER MONTH PER ACRE; AND (B) PREVISION FOR UNFORESEEN CHARGES @ 15% OF TOTAL RESERVE PRICE. FI RSTLY, EVEN IF THIS ALLEGATION ABOUT PRESENCE OF THE TWO ELEMENTS ONLY TO MAXIMIZE THE PROFIT BE TAKEN AS CORRECT, IT IS IMPORTANT TO BEAR IN MIND THE FACT T HAT THIS IS NOT THE PRESENCE OF PROFIT ELEMENT IN THE ACTIVITIES WHICH VITIATES CHARITABLE CHARACTER OF THE ACTIVITIES BUT IT IS THE ABSENCE OF RESTRICTIONS ON MAKING PROFITS WHICH VITIATES THE CHARITABLE CHARACTER OF THE ACTIVITIES. IN THE INDIAN CHAMBER OF COMMERCE (SUPRA), WHICH HAS BEEN RELIED UPON BY THE ASSESSING OFFICER AND R EFERRED TO IN CBDT INSTRUCTION NO. 1024 (SUPRA), IT HAS BEEN STATED THUS; 'ORDINAR ILY PROFIT MOTIVE IS A NORMAL INCIDENT OF BUSINESS ACTIVITY AND IF THE ACTIVITY O F A TRUST CONSISTS OF CARRYING ON OF A BUSINESS AND THERE ARE NO RESTRICTIONS ON ITS MAKIN G PROFIT, THE COURT WOULD BE WELL JUSTIFIED IN ASSUMING IN THE ABSENCE- OF -SOME' IND ICATION ID' THE CDNTRARY THAT THE OBJECT OF THE TRUST INVOLVES THE CARRYING ON OF AN ACTIVITY FOR PROFIT'. THAT APART, MERE PRESENCE OF THESE TWO ITEMS DOES NOT SHOW THAT THE UNDERLYING OBJECT OF INCLUDING THESE TWO ITEMS IN THE FORMULA WAS PROFIT MAXIMISATION. THE INCLUSION FOR PROVISION FOR UNFORESEEN CHARGES, IN OUR UNDERSTAND ING, IS A FAIR AND CONSERVATIVE APPROACH TO ENSURE THAT THE COSTS INCURRED BY THE A SSESSEE TRUST ARE RECOVERED FROM THE END BUYERS OF THE RESIDENTIAL UNITS OR LAN D. THE ELEMENT OF CHARITY IS NOT IN GIVING AWAY THE RESIDENTIAL UNITS AT SUBSIDIZED OR LOW PRICES BUT IN PURSUING THE OBJECT OF ADVANCEMENT OF OBJECT OF GENERAL PUBLIC U TILITY IN PLANNED DEVELOPMENT OF THE AREA IN ACCORDANCE WITH THE POLI CIES OF THE STATE GOVERNMENT. 37. A LOT OF EMPHASIS HAS BEEN MADE BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE FACT THAT NOTHING, OR VERY LI TTLE, HAS BEEN DONE BY THE TRUSTS FOR THE POOR PEOPLE BUT WHAT THIS ARGUMENT OVERLOOK S IS THAT THE ASSESSEE TRUST IS NOT GRANTED REGISTRATION UNDER SECTION 2(15) FOR IM PLEMENTING POVERTY ALLEVIATION PROGRAMS OR DOING OTHER ACTS OF CHARITY BUT IT IS G RANTED REGISTRATION BECAUSE WHAT IT IS PURSUING, BY FOLLOWING THE STATE GOVERNMENT P OLICIES FOR PLANNED DEVELOPMENT OF CITY, IS ADVANCEMENT OF AN OBJECT OF GENERAL PU BLIC UTILITY. PURSUING AN OBJECT OF GENERAL PUBLIC UTILITY DOES NOT NECESSARILY INVOLVE MORE NOTICEABLE DIRECT ACTS OF CHARITY DRIVEN BY COMPASSION AND BENEVOLENCE. THERE IS SO MUCH TO BE DONE GOVERNMENT AGENCIES, AS THESE ASSESSEE TRUSTS ARE P ERCEIVED TO BE, THAT NO MATTER WHAT THESE AGENCIES DO, THERE IS STILL LOT L EFT TO BE DONE. JUST BECAUSE THESE AGENCIES COULD HAVE DONE MORE, SUCH EXPECTATIONS, N O MATTER HOW LEGITIMATE, 4 DO NOT OBLITERATE THE WORK DONE BY THESE AGENCIES A ND THE ROLE PLAYED BY THESE AGENCIES FOR PUBLIC GOOD IN FURTHERANCE OF ADVANCEM ENT OF OBJECTS OF GENERAL PUBLIC UTILITY. 38. LEARNED DEPARTMENTAL REPRESENTATIVE HAS ALSO PO INTED OUT THAT THE ASSESSEE TRUSTS DO NOT GET ANY GRANT FROM THE STATE GOVERNME NT WHICH SHOWS THAT FIRST THEY MAKE PROFITS FROM LAND DEALS AND THEN USE THE INCOM E SO EARNED FOR THE PUBLIC CAUSES STATED. IT IS FOR THIS REASON, ACCORDING TO THE DEPARTMENTAL REPRESENTATIVE, THAT THE ASSESSEE TRUST CANNOT BE S AID TO BE ANYTHING OTHER THAN A BUSINESS SIMPLICITOR. ON THE CONTRARY, ACCORDING TO THE LEANED DEPARTMENTS REPRESENTATIVE, IT IS LIKE ROBBING PETER TO PAY PAU L. WE ARE UNABLE TO SHARE THESE PERCEPTIONS OF THE LEARNED DEPARTMENTAL REPRESENTAT IVE. AN OBJECT OF GENERAL PUBLIC UTILITY DOES NOT NECESSARILY REQUIRE THAT TH E ACTIVITIES OR THE BENEFICIARIES MUST BE FUNDED OR SUBSIDIZED BY THE STATE. AS LONG AS BROADER PUBLIC CAUSE IS SERVED, WHETHER BY THE STATE FUNDING OR BY EFFICIENT REGULATION OF THE AFFAIRS, IT IS AN OBJEC T OF GENERAL PUBLIC UTILITY. IT IS ALSO IMPORTANT TO BEAR IN MIND THAT COSTS OF PROPER DEVE LOPMENT OF AREA ARE ALSO COSTS INCIDENTAL TO THE PINTS AND UNITS SOLD BY THE ASSES SEE AND, THEREFORE, THESE TWO THINGS SHOULD NOT BE SEEN IN ISOLATION. AS FOR THE SPECIFIC INSTANCE OF INORDINATE HIKE IN PRICES WITHIN A SHORT PERIOD OF THREE AND A HALF YEARS, WE ARE UNABLE TO COMMENT UPON THE SAME AS FULL FACTS RELATING THERET O' ARE NOT ON RECORD. THAI ASPECT, HOWEVER, FOR THE DETAILED REASONS SET OUT A BOVE, DOES NOT AFFECT OUR CONCLUSION ANYWAY. 39. AS FOR THE DECISION OF THE COORDINATE BENCH IN THE CASE OF THE PUNJAB URBAN DEVELOPMENT AUTHORITY V. CTT (2006) 156 TAXMAN 37(C HD.L IT IS A CASE IN WHICH THERE IS NO MENTION ABOUT SELLING THE RESIDENTIAL U NITS AND PLOTS AT THE PRICE ON THE BASIS OF A FORMU'AE LAID DOWN BY THE STATUTE. IN TH E ' PRESENT. CASE, THERE IS N O DISPUTE ON THIS ASPECT, AND THAT IS A CRUCIAL ASPEC T HAVING BEARING ON THE CONCLUSIONS. THERE WAS ALSO NO, AND COULD NOT HAVE BEEN ANY, OCCASION TO CONSIDER THE IMPACT, WHAT IS REFERRED TO AS 'KILL E FFECT', OF THE AMENDMENTS BY THE FINANCE ACT, 2015. THE REVENUE, THUS, DERIVES NO AD VANTAGE FROM THIS JUDICIAL PRECEDENT. AS REGARDS THE DECISION OF THE COORDINAT E BENCH IN THE CASE OF AMRITSAR IMPROVEMENT TRUST (SUPRA), ON WHICH SO MUC H RELIANCE HAS BEEN PLACED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, IT IS A LREADY SET ASIDE'-BY HON'BLE JURISDICTIONAL HIGH COURT. AS A MATTER OF FACT, IN THE COURSE OF PROCEEDINGS BEFORE HON'BLE HIGH COURT IN THE CASES OF OTHER IMPROVEMEN T TRUSTS, LEARNED COUNSEL FOR THE REVENUE HAS FAIRLY ACCEPTED THAT THE DECISIONS OF THE TRIBUNAL, FOLLOWING THE AFORESAID DECISION, ARE REQUIRED TO BE SENT BACK TO THE TRIBUNAL FOR FRESH DETERMINATION ON THE SCOPE OF PROVISIONS OF SECTION 2(15). THE REVENUE, THUS, DERIVES NO ADVANTAGE FROM THIS JUDICIAL PRECEDENT E ITHER. 40. FOR THE REASONS SET OUT ABOVE, WE ARE OF THE CO NSIDERED VIEW THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DECLINING T HE BENEFIT OF SECTION 11 READ WITH SECTION 2(15) TO THE ASSESSEE, AND IN HOLDING THAT THE ASSESSEE TRUST WAS NOT COVERED BY ADVANCEMENT OF ANY OBJECT OF GENERAL PUB LIC UTILITY. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOW ANCE OF EXEMPTION OF RS 65,20,690. THE ASSESSEE GETS THE RELIEF ACCORDINGLY . GRIEVANCES OF THE ASSESSEE ARE UPHELD. 41. IN THE RESULT, ITA NO. 496/ASR/ 2013 IS THUS AL LOWED IN THE TERMS INDICATED ABOVE.' IT IS WORTHWHILE TO MENTION HERE THAT THE AFORE MENTIONED DECISION OF T HE HON'BLE ITAT , AMRITSAR HAS BEEN FOLLOWED BY THE HON'BLE ITAT, CHA NDIGARH IN THE CASE OF IMPROVEMENT TRUST, SANGRUR VS. ITO, SUNAM IN ITA NO. 987/CHD/2014, A.Y . 2010-11 DATED 14.12.2015 AND IN THE CASE OF PATIALA IMPROVEMENT TRUST VS. ITO, W-L, PATIALA IN APPEAL ITA NO. 305/CHD / 2013, A.Y . 2009-10, ITA NO. 1 182/CHD/2013, A.Y. 2010- 11, ITA NO . 8 M/CHD / 2014 , A.Y. 2009-10 DATED 15.02.2016. RESPECTFULLY FOLLOWI NG THE ABOVESAID JUDGMENT OF THE HON'BLE ITAT IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST VS. INCOME TAX OFFICER , WARD 1, HOSHIARPUR (SUPRA), THE GROUNDS OF APPEAL NO. 1 TO 4 ARE ALLOWED. 5. BEFORE US THE LD. DR RELIED ON THE ORDER OF THE LD. CIT(A) WHILE LD. AR RELIED ON THE ORDER OF ASSESSMENT ORDER. SINCE THIS MATTER HAS BEEN DEALT IN NUMBER OF IMPROVEMENT TRUST NAMELY IMPROVEMENT TRUST, SANGRUR VS. ITO, SUNAM IN ITA NO. 5 987/CHD/2014, A.Y. 2010-11 DATED 14.12.2015 AND IN THE CASE OF PATIALA IMPROVEMENT TRUST VS. ITO, W-L, PATIALA IN APPEAL I TA NO. 305/CHD / 2013, A.Y . 2009-10, ITA NO. 1182/CHD/2013, A.Y. 2010-11, ITA N O . 8 M/CHD / 2014 , A.Y. 2009- 10 DATED 15.02.2016. THE JURISDICTIONAL HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH IN CASE OF CIT(EXEMPTION) VS. M/S IMPROV EMENT TRUST, MOGA IN ITA NO. 147 OF 2016 VIDE ORDER DT. 23/12/2016 HELD THAT MERE PROFIT MAKING ON ACCOUNT OF CERTAIN INCIDENTAL OR ANCILLARY ACTIVITI ES OF THE TRUST DO NOT DISENTITLE IT TO THE EXEMPTIONS. THE TRUST CONSTITUTED UNDER THE PTI ACT IS LIKELY TO MAKE PROFIT ON ACCOUNT OF ITS COMMERCIAL OR BUSINESS ACTIVITIES SUCH AS WHEN IT ACTS PURSUANT TO THE POWER UNDER SECTION 28(2)(III) BY DISPOSING OFF ITS LANDS. THAT, HOWEVER, DOES NOT TAKE IT OUT OF THE DEFINITION OF CHARITAB LE PURPOSE IN SECTION 2(15). AS WE HELD EARLIER, TRADE, COMMERCE AND BUSINESS IN SE CTION 2(15). AS WE HELD EARLIER, TRADE, COMMERCE AND BUSINESS IN SECTION 2( 15) MUST BE SUCH AS TO INVOLVE AN ELEMENT OF PROFIT. PROFIT, HOWEVER, IS N OT THE PREDOMINANT MOTIVE OF SUCH TRUSTS. IN OUR VIEW CONSIDERING THE NATURE OF THE ACT, SELLING OF PLOTS AND PREMISES BY THE TRUST IS ONLY INCIDENTAL AND ANCILL ARY TO ITS MAIN PURPOSE WHICH AT THE COST OF REPETITION IS TOWN IMPROVEMENT IN ALM OST EVERY RESPECT. EVEN WHERE THE PLOTS ARE DEVELOPED AND PREMISES ARE CONS TRUCTED AND SOLD AT THE MARKET PRICE, THE ACTIVITY IS NOT COMMERCIAL OR BUS INESS VENTURE PER SE BUT ONE NECESSITATED ON ACCOUNT OF THE IMPLEMENTATION OF TH E PROVISIONS OF THE TRUST THROUGH STATUTORY SCHEMES. THE MAIN PURPOSE OF SUCH SCHEMES IS DRIVEN BY PUBLIC REQUIREMENTS AND NOT AS A COMMERCIAL VENTURE PER SE. THEY ARE INCIDENTAL TO THE MAIN OBJECT OF THE TRUST. OWING THE JUDGMENT OF HONBLE HIGH COURT NO INTERFE RENCE IS CALLED IN THE ORDER OF THE LD. CIT(A). 6. IN THE RESULT APPEALS OF THE REVENUE ARE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER 6 DATED : AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR