Commissioner Of Income Tax, New Delhi v. Federation Of Indian Chambers Of Commerce & Industries, New Delhi

HAART Alara, As faseitTay aetna aie sfesaa arag aie HA WETIStaIa, AE faeett| (Commissioner of Income Tax, New Delhi Federation of Indian Chambers: of Commerce andIndustries, New Delhi) (15 ate, 1981) (raranftaft ato Gao TS, Yo Ho Ba ale¥° Uto AHTUIATT)| araer afafraa, 1961 (1961 #t 43)—earet 2(15)at Tet 11(1)(%)—ga satea—ad at atlas setaome ag “faal ara & fae feet fieatea et aerarfae arfa acca & aa—“qdg gataa” at afer ¥STAT eae Et Qe wt aeafaaa—afe faatfedt®fare or areafas Sexe ata Sarat at 2, at ag agfe get saterat & ara & fag feet frag ot aaa ararwater wet star arfee, qt at onrgit—afe fraffedr &fearmera yea seer & argufins ar agree g, aa: WFfrarecrrat at aerttA faatfcal grav sea. ea ax ae agtANTAL AT THAT | Bstaa aig efera dead ain stad ws geete, affacet, arqat afafaan, 1956 % seta faerara aeqdt 8 1 ek oeafafian at art 26 & adit tfaectea fear car att ek aqamar # a ‘fafaes’ gee gett et agar? & we 1 a at caat MEargs Fatt at gag at aaeat F Ata arate a faakea searql ag aa AAT AIT BT VTA AIA Seeal at ofa H fear Hear& i fratfedt ar gear sdeq area F eaazara, arise site vate a afaata, dean ale faara star g1 gah oder Setar F aaT-aa 3 ¥ far augt faater ay 1962-63 % atera faa ganawearay 31 fearaz, 1961 at gare gar ar,fastfedt aaatga ara at ‘yea’ afer wet ge faazoit sega st att ag eratfrat fe saat aaet aia Ht afafram ay rer 2(15) ¥ are ofsaater 11(1)(%) & aetr ge sree gt seme freaieoy ad F aterfaaifcat 3X v€ fect F aretha earare Ba ar avatarfeat alzBe arafes cara ale Reet garat TAT osreHTT a aca free& gh Ha 75,18,548 eat ay siftaat ger gat Maa fenceJase 20,750 wat ait sft fat ger areal at aa ag fenet a«394,143 eat orca fat fratfedtoat aa are cere &Hea oars B fare at eat sar Ste att afee ulate agaratgana war-ad F staat fraifedt 3 afew agate a avaitamtar-ufsarg aasal ar artaa wt ag feet A aratisa farqa ATHIT A as aaa afr Hwa F far faaifeat wtagiaal agart F VT A 3 area Vay fer ale gear Hr say Feema ® qsata faalfzedtaa 2,17,346 wa 38 Fa aa aesax afafeaa fraifedt at aeoet fat & araieaa gern ar farameage are H afer FH TH 265 aay 50 FF org gu ateqremeaq Gia ® Gia ® ®eg H 5,371 way 82d set aur wat H 5,371 way 82d set aur wat 5,371 way 82d set aur wat way 82d set aur wat 82d set aur wat set aur wat aur wat wat aedgaeal ¥ aieaeay % fee 20,000 ead afan aa & eo F agafa faat% 299 ead 18 Fa sas aa Ae ws | Maral a dafeaqaara & ag afae gat & fa fratfedt & ora ‘ora’ aie Sardegaa & afaa 2,291 wa 71 Fa afafeaa oe F er HY1 araHTafaarat ® ava facifedt at aca ag dt feGeta are fac aeGRATHAT ATA HATA FH sea a al fea wa, afer J viva aterca Mater sagas,aifase ate salt at afaafe, aero altzfapra ® sea 8 fer TAFgah gage At araTr afeare 4ag agua feat fe ge fare & aeafera gad ga F os aTAe A geaqme a ot fafaeaa fear at ag,afafsar et are 2(15) 4are Bu ‘Gad Tala weg at afeaar & “feat arr & fa fratGROTEAIT HT ARIAT MAT AeaAeT asl V”Met Hl Ga aracHt agead sate Camara ate saat feet ver gear” ay faafer acy2 ag far ot% % aren aa ser fafe val g ate Rafer va ga qremeaq Gia ® Gia ® ®eg H 5,371 way 82d set aur wat H 5,371 way 82d set aur wat 5,371 way 82d set aur wat way 82d set aur wat 82d set aur wat set aur wat aur wat wat aed FEDERATION OF INDIAN CHAMBERS OF COMMERCE & INDUSTRIES, NEW DELHI April 15, 1981 [R.S. PATHAK, A.P. SEN AND E.S. VENKATARAMIAH, JJ.] Income Tax Act 1961, S. 52(15) and IJ(J)(a)-'Charitable object'-Object of general public utility-' Not involving the carrying on of any activity for profit'-Meaning of-Primary or dominant purpose of trust or institution to be charitable-'Purpose' oftrust-'Powers' conferred on trustees for carrying out the purpose-Distinction between. The respondent assessee an existing company under the Companies Act, 1956 had neither any share capital nor distributed any dividend to its members and its entire income was expended for fulfilment of its objects, which were the premotion.. protection and development of trade, commerce and industry in In~ During the assessment year 1962-63, the relevant accounting year for which the year ended December 31, 1961 the assessee submitted a return showing its total income as 'nil' claiming that all its income was exempt under section ll(l)(a) read with Section 2(15) of the Income Tax Act. During the assessment year, the assessee held the Indian Trade Fair at New Delhi and derived receipts from rent for space allotted, temporary stalls and storage and realised deposit and advances from the participants for hotel accommodation. In the relevant accounting year, the Conference of the Afro-Asian Organisation for Economic Co-operation, was sponsored by the assessee and for organising the Conference, the assessee received from the Government Rs. 3 lakhs as grant-in-aid and after meet· ing the expenses, was left with a balance of Rs. 2 lakhs. It also received income by sale of books, fee for~arbitration etc. The balance sheet for the accounting year indicated that it had an excess of income over expenditure under the head 'income'. The contention of the assessee before the Income Tax Officer was that the activities carried on by the Federation were not were not motive of earning profits, but that they were carried on with the object of promotion, protection and development of trade, commerce and industry in India and abroad, and therefore the income derived by the assessee was exempt under S. l l(l)(a). The Income Tax Officer, held that the decision of this Court in the Andhra Chamber of Commerce's case [1965] 1 S.C.R. 565 was no longer good law due to the addition of the words 'not involving the carrying on any activity for profit' in the definition of 'cliaritable purpose' in Section 2(15) of the Act which qualify the fourth head of charity viz. 'any other object of general public utility' and, therefore, must be read subject to the additional statutory requirement that the object of general public utility should not involve the carrying on of any activity for profit, and accordingly raised a demand. On appeal by the assessee, the Appellate Assistant Commissioner disagreed with the view of the Income Tax Officer and held that the activities carried on by the assessee were not profit-oriented and, therefore, its income was exempt. The Department appealed to the Appellate Tribunal, and the Appellate Tribunal upheld the view of the Appellate Assisstant Commissioner and held that the dominant object with which the Federation was constituted being a charitable purpose viz., promotion, protection and development of trade, commerce and industry, there being no motive to earn profits, it was not engaged in any activity in the nature of business or trade, and, if, any income arose from such activity, it was only incidental or ancillary to the dominant object for the welfare and common good of the country's trade, commerce and industry. The Commissioner of Income-Tax applied to the Appellate Tribunal to make a reference to the High Court under sub-section (I) of section 256 of the Act, but in view of the conflict in the decisions of the High Courts on the construction of the expression 'charitable purpose' as defined in section 2(15) of the Act the Tribunal made a reference to this Court under Section 257. On the question whether the words 'not involving the carrying on of any activity for profit' in the definition of 'charitable purpose' contained in section 2(15) of the Act, govern the word 'advancement' and not the words 'object of general public utility'. HELD : [By the Court] The reference must be answered against the Revenue and in favour of the asseesee, in the view of the majority opinion in A.id!. Commissioner of Income Tax v. Surat Art Silk Cloth Manufacturers, [1980) 1 S.C.R. 77. [492 F] [Per A .P. Sen, J.] I. The majority view in the Surat Art Silk case was that the condition that the purpose should not involve the carrying on of any activity for profit would be satisfied if profit·making is not the real object. The theory of dominant or primary object of the trust, has, therefore, been treated to be the determining factor, even in regard to the fourth head of charity, viz. 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. This doctrine of dominant or primary object holds the field till there is a change of law. [496 C-D, 497 FJ 2. The majority decision had the effect of neutralising the radical changes brought about by Parliament in the system of taxation of income and profits of charities, with particular reference to "object of general public utility" to prevent tax evasion, by diversion of business profits to charities. It is the vagueness of-the fourth head of charity "any other object of general public utility" that impelled Parliament to insert the restrictive words "not involving the carrying on of any activity for profit". [ 496 G-497 A] 3. It was clearly inconsistent with the settled principles to hold that i( the dominant or primary object of a trust was 'charity' under the fourth head 'any other object of general public utility', it was permissible for such an obiect of general public utility to augment its income by engaging in trading or commercial activities. [497 BJ 4. When the Government did not accept the recommendation of the Direct Taxes Laws Committee in Chapter 2 for the deletion of the words "not involving the carrying on of any activity for profit"' occurring in Section 2(15) of the Act, it was impermissible for the Court by a process of judicial construction to achieve the same result. [ 496 F] 5. In the instant case, activities of the assessee in regard to holding Qf the Indian Trade Fair and sponsoring of the Conference of the Afro-Asian Organisa-tion in the relevant accounting year were for the advancement of the· dominant object and purpose of the trust, viz. promotion, protection and development of trade, commerce and industry in India. The income derived from such activities was therefore exempt under S. ll(l)(a) read with S. 2(15) of the Act. [ 497 G-498 A] 6. There is a distinction between the "purpose" of a trust and the "power conferred upon the trustees·• as incidental to the carrying out of the purpose. If the primary or dominant purpose of a trust or institute is charitable, any other object which is merely ancillary or incidental to the primary or dominant purpose, would not prevent the trust or the institution being a valid charity. [498 G, 499 A] [Per Venkataramiah, J.] afafaar argdt ater & ara ger sian arfau fae “arma ateSIAM Bee,’ & areata ara H far Peel fearsare sr searOT wate Bi aaqart wart 84,430 at atga aay49,818 eat at ain atgah fase atta fee my ot agesagae (atte) arse afasrd & sa faare 8 agna ad gar atesae ag afafraifza fear fe fraifedt are aare ay feareare“maga agt & att gafae gaat ara FY ge sea Fa masayer + arta afar & emer ater at faeg cae A as aaaamet fret1 afaazr + at agin agar (atta) % fafaera aygt aay tart att ag afufratfer fear fis fora ger gis ay eaeHEWITT Hr sa Pear TAT ar, ag ‘ge salsa’ aati eaaara, atfosaait sata at afrafa, crear ate fasta dari afe ara waryBT sear BS aay agat, gafag ag fest sree at am at‘wala & fat fearaere F aa gar aval ar ate afe 0a frases“& cftorraeaeq HE ara sora gf 8, diag ea ¥ cagara, arfrseONT TAT H HEMT AIT araTeT was F ger vert wr arqafiryOr agra f1 RaH are aH anqaa F afafram wt Te 256 atrare (1) & aete area sea eararaa ay frdfat fee yefac ata afrren & ener mater fear1 Sarg afar a afafarat arer 2(15) # ofearfen ‘ga stag’ gee ® aaltaaa & aracy fafars seq -qraraal F wate PAF arco afafare Mt ae 257S aela fafaer seat oe tra 2a} fag ag ara ga cara FYfrafaa fratae-fage ar gaz faatfed F ger Hate uses fast& fave 83 gu,|:: afafratfca—afe cara & faaerat Fata gd sata sara Hat S fag a ara ar vrata fear orar &, a za ae & fH|sare % fegraartt & ara Harar war zg, cate F Ga eawT Hl aTaaa at anat) ae wd fecataH ara & fae Peat frarwarsHT AMAT Arar HeaVeT Tal F, BA TAT gt gt saat afe aryHUTA Fea Beer Tel Tear 1 gafay ge salsa F age Ne said‘arma ale sat feat seq sFam B aqTat Hwa” F arare FGt cara F cart at yer eeu % faara at gt frotas ae gtSHIT Brat ware faae fa saraatfaw fearpara at Tara AATeT BUT BT AgiIaT AT agains st sg 1 (Fz 10). ear a rent seer ar faater aa TH TATA TAT TATaa aa fx fafer 3 at HE ofeada al we fear sar ea aa FTare ae aél 2 fe fraffedl 4 gana Aar-ag % skis areaamare Far ae amtat-cfrars Ansa H aeaAT Br MATT HWaaa oft frarnaie feu, Tena & ger seer at salsta a aaTT,area H aaa, arfasa ate sett at afeafa, ater ate fare“ah cara % wad ge fae ae Bt times Pare e faery Breeaa7age sarara frererat & ae eaters frat ar fe faaifedt artefrareardl & seat art at afafaam at sree 2(15) % are aferayer 11(1) (a) & areiter Be seaJ 1 (Tet 14) freddg fratfedt & ana-aiaat B ave 3 F agave (a), (<1)afte (2) ¥ ot sdea orator feo 7g, Fare ger eTagains ar aaran & 1 fey care B ‘rats’ at Ja TaaT BYalaihae eta S fae earfadt a agers afaaay& eT A reafeadt & ata s¥z 21 sarge F er FH avs 3(a) VA aah,dearait, fafsat, carat afte gfaaral at carcar ate saat agitaraia F a adarfeal ale gah orfatB fare fease at at segGaa ate wa anfe aged wet fears woaee BTA T TAT aATATa1 fad dasa & agiae eg 8 srateaae & fae Hama FATTBs fam ga care ah eae Gare HUA araeasy g AT ay HM Feaden at aaget gar fae fre dear aor Fag e 1 ae rH% eoraraa agat are ca aval Bae agar fe HAA “TAA HT etwa at” & ar agtsaalfs, afe care ar aear BT Tea aT Gersalar GS, Aaa Fea aT MATA TALS BT ATT ARIA aT aAGTTTalg ay satra ara at dear a fafrara gd-sataat gt afranfer sgt Bt aa| aT WHIT BIS 3(e 1+) aT (Z 2) faraHAT FATT at carat FY CATA, TAI-AAT TT san eatfaat afagfea atz oa anfaal % fratfeet at fafeat a7 afar amaravafa ai fafga wea & faq aqara fear wat @, att Fe aay @,.afee va care BOS farses SF A eT F ger wisa Fargsifra az agra @, sfaa anf sare & faa see saa wfaaar#1 (dtr 15)— -1228 fafaa adie afenifeat: 1975 ar az faze deat 17. 1968-69 at amar adia dear 1339/faeat & saga srait 1971-72 % fade maar sear 92/feeit F araazt ate”afaecor arzr aan afafaaa, 1961 at arer 257 % sete fear”mat fazer t. sararaa ar facia eqratfrafa arto ao WSs a feat)sararfiraft ate — 1. It is open to the Legislature to give encourage!llent to objects which it considers to be laudable by means of fiscal exemptions. At the same time, it takes care to enact fresh provisions from time to time to suppress any mischief which may have resulted from the misuse of existing law. Parliament deliberately stepped in by adding the words "not involving the carrying on of any activity for profit" in the definition of 'charitable purpo~e' in section 2(15) of the Act, when the tax exemptions available to charitable and religious trusts came to be misused by some for the unworthy purposes of tax avoidance. The law had been so re· structured to prevent allergy to taxation masquerading as charity. The law was thus designed by Parliament to prevent this misuse of tax exemption in the name of charity. [500 F-H] 2. This Court has enlarged the meaning "charitable purpose" in Section 2(15) beyond what it legitimately should mean in the Surat Art Silk Cloth Manufacturers Association's case. It has virtually wiped off the restrictive words "not involving the carrying on or any activity for profit" occurring in S. 2(15), thereby defeating the very object and purpose of the legislation. It is not the func· tion of a court of law to give the words a strained and unnatural meaning. Judicial attitudes cannot be formed iu isolation from legislatiw r recesses, particularly, in connection with tax avoidance provisions. [500 D, SOJA, 50()EJ 3. Modern legislation has changed in pattern re-casting provisions of taxation with very wide language, while at the same time dealing in much more detail with some areas of law. Judges while responding to general trend~ of law, but also reacting;to the form of modern tax legislation, must be prepared to take account of the context and purpo5es or the change brought about. (501 E] Greenberg v. Inland Revenue Commissioners (1972] _ A.C. 109 (HL) referred to. 4. When the Government had not accepted the recommendation of the Direct Taxes Laws Committee in Chapter 2 for the deletion of the words "not involving the carrying on of any activity for profit", by suitable legislation, it was impermissible by a process of judicial construction to achieve the same result. . [501 Bl 5. People who are truly charitable do not think of the tax benefits while making charities. Even the poor who do not pay income tax can be charitable and their charities are made at great personal inconvenience. Charitable persons are not amongst the tax payers only. [502 H-503 A] CIVIL APPELLATE JuRJSOICTJON : Tax Reference Case No. 17 of 1975. Under section 257 of the Income Tax Act, 1961 made by the Income Tax Appellate Tribunal, Delhi Bench in Reference Applica-tion No. 92/DEL/71-72 arising out of LT.A. No. 1339/DEL/68-69. B.B. Ahuja and Miss A. Subhashini for the Appellant. A.K. Sanghi and Narayan Netter for the Respondent. The following Judgments were delivered : PATHAK, J. In view of the majority opinion of this Court in Addit:'onal Commissioner f!f Income-tax, Gujarat v. Surat Art Silk Cloth Manufactures,(1) the reference must be answered against the Revenue and in favour of the assessee. -1228 AIT AKT ATA, YAMA TATA Ara ae faces aeraAeqgraws! area aay F ga cataray F agra a Ue By Sa Teae gu, fader ar sae useg faute & fees ate faaffedt For% dar srt sarafagia a— 2. mast argae, feet , ve feet BY Tet IT aAFTatta aftr, feedt caradie-@gir. arent afaftay, 1961(fad gat gah crate afafian mgr var 8) et are 257 % ataaeat fae ae ga fade H aeara afer wer Wat seem gar g fHaat afafran at arer2(15)% aeafase ‘ga sataa’ at ofearar Farate at art “frat ara % fag Peat feareera aT TATA STATarea aat 2” wee Cameae Hea” ee BT at a fe “CaTaTa alesaaae sa” gee at faafaa wea FI7 3.¥ ava fare wren ag fader fear aat g, farafafad ava fare wren ag fader fear aat g, farafafad fare wren ag fader fear aat g, farafafad wren ag fader fear aat g, farafafad fader fear aat g, farafafad fear aat g, farafafad aat g, farafafad g, farafafad farafafad er y% 8, Getaa are efosar Graq ars HAA wos quseata, AE feeait,fat sad cad art faatfee’ Ber F fafese fear war g, araafefad, 1956 & ata fraara Heat 21 ee va afafaare aqtr 26% att taedladfear waratt 38 aaa ara ¥ ava fare wren ag fader fear aat g, farafafad ava fare wren ag fader fear aat g, farafafad fare wren ag fader fear aat g, farafafad wren ag fader fear aat g, farafafad fader fear aat g, farafafad fear aat g, farafafad aat g, farafafad g, farafafad farafafad er y 1 [1980]3 3H0 Fito Go 359= (1980) 121 argo Zhe atte 1, fafats’ cea gert at agar 2 a ae) a at gaat ate aaah &at a sae art aaeat F itq arate at faafea wear 2 Lae aqatt aera at STUNT AT Seeqt at gfe F fae wrar 24faatfedt ar qer seea wre H cqaara, arfinse ate vatn atafagfg azar ate fara ata gaa A, Beteger see frat gfe & fare gear oea gar@, Fae aA-aTT F cara 3 FH agi aw stafna feo avs at wat| am fa ag arkasn 2, ga sare 8—|: 3.(%) ar % wae ate fata % eqaara, afeaga,samy altfafanin, faa gar ait aa ofan fatewaa saa at afeafe sear Tar area daerdy,.Atage ate star et iteatza Bary. safe avs 3 (am) # eae & srefeae satel ay afearfaa. fearTa & fas aeaTT sraara ale satat a afvafe wzar g atfrayfree gag tar seers Marae ate goatfnar a daferr2Glafe 08 fraveare fee ora 2 ot ata Hatsemq & agt ae 3} stews (@) ate stave (x2) aeerating qaqaSeer aIGU hs ae agrayzs|— 5. faattr ag 1962-63 % dtua feast gave fer ad 31 faaraz, 1961 at aurea gat ar, father > acdt ga ae aTyea’ afar era eu faacoht sega at ate ag arar Prat fin gaataaa aa at afafray ay rer 21 (15) % are afsa arer 11/1)(#)& ada oz seaigen frat ag ¥ dtua favifedd Fae facet F areata canary Rar wr arse fear atte ga arafzacara alt area sara gar qwsreHTT A ster face Fed FAeam75,18,548 ate sfa aaq fer at qe mfr ard ge ae gaa aA ae dea fewdt fewe & 3,94,143 Feat 20,750 vagsrea fag| fratfeet & arr Sa are cerarel & Mea aaa ¥ farwere sar aug at afra ufsat a aga a 1 gata Aer ag& aera fraffeat a anfaas again & dafea airat-dfearg. analBt araaa Wl te feed F maine fears area aear< a azaataa aratiaa wut} fag fraifedt a aera agar & ey F 1230 9:Sean artataa facia ofaet [1982] 1 swe fo to 3 are aoe fer abe arta sr aa ge Hea F aaa, PratfeeyH are 2,17,346 wae 38 4% aa qegah afafeaa fratfedl ataraat fafa & ddfaa gern ar fama He a ge ara F ae F ST% 265 wow 50 FF sea guatt HreaeayGAHwT F 5,371 BIT82 GB areagu| gaa aI aaeal & aremeay F faz 20,000 eaeafvaat Seg H aga fac feat3 299 we 18 Fa vas TeYs Wiser af & arated gaava & ag afea garz fefreifeet & ore ‘ara’ sheela aaa a afew 2,291 eg 71 aeafafeaer ars ert a 6, arama afaardtama faaifedd thadta aefeGeta gic far we fearwary ara Hay F veer F at faraa afem 3 axa ate area & aret casera, arfasa atx gett atafwafe deat atx faara & soar a fae oa 8 1 Tash avilaag ay fs fre ger oeea a Geta a carqar at Te at, ag eaB sara, gaara ate sala ay afvafe, dram ate faara ¥ faear att seara faaten ag & atera fae ae fearsarsy aateMANA saqraty AA HT arataa ale arfan againfare amar. daarahaa ar grata, get ger ode wr arqafawate aeiae at X ate safer saa st arat ara st ofatraa ayaver 11(1)(#) & att we sea 81 xe celts & araa F eatFATATAT TTT MAST MAT FATT ATT Feat ain aad) aryaaa % fae ae fafasaa ar aacea frat vars dle gad qa aiefaatzo at-1960-61 att 1961-62 % aaa fraifedt a aragran gaa dae 1922 at aren 4(3)(i)® aela ara we setareal 7 ay| frag daar 7, gah qaqa Tt maet afearet 4 ag aqua Prat fr AVY AtaT ATG BAT! 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SEN, J. This direct reference under s. 257 of the Income tax Act, 1961 (hereinafter referred to as 'the Act') made by the Income Tax Appellate Tribunal Ddhi Bench 'B' at the instance of the Commissioner of Income Tax, Delhi· U, New Delhi raises the much vexed question as to whether the words "not involving the carrying on of any activity for profit" in the definition of 'charitable purpose' contained ins. 2 (15) of the Act, govern the word 'advancement' and not the words 'object of general public utility . The facts giving rise to the reference are as follows : The Federation of Indian Chambers of Commerce and Industry, New Delhi-hereinafter referred to as 'the assessee'--is an existing com-pany under the Companies Act, 1956. It was registered under s. 26 of that Act and permitted to omit the word 'Limited' from its name. It has neither any share capital 1lor does it distribute any dividends to its members. The entire income is expended for the fulfilment of its object. The main object of the assessee is the promotion pro-tection and <,ievelopment of trade, commerce and industry in India. The main objects for which the Federation has come into exis-tence are set out in cl. 3 of the Memorandum of Association which, insofar as material, reads : 3.(a) To promote Indian business in matters of inland and foreign trade, transport, industry and manufactures, finance and all other economic subjects and to encourage Indian banking, shipping and insurance. While cl.3(a) defines the primary purpose of the trust, i.e. to promote trade and industry which undoubtedly being an object of general public utility engaged in carrying on activities without . any profit motive, the subsidiary objects set out in sub-els. (b) to (z2) of cl.3 are merely incidental or ancillary thereof. During the assessment year 1962-63, the relevant accounting year for which was the year ended December 31, 1961 the assessee submitted a return showing its total income as 'nil' cla;ming that all its income was exempt under s. ll(l)(a) read withs. 2(15) of the Act. During the assessment year in question, the assessee held the Indian Trade Fair at New Delhi and derived receipts totalling Rs. 75,18,548 from rent for space allotted, temporary stalls and storage. It also received Rs. 20,750 by sale of season tickets and Rs. 3,94,143 by daily gate tickets. It realised deposits and advance~ from the participants for hotel accommodation, In the relevent accounting year, the Con-ference of the Afro-Asian Organisation for Economic Cooperation, sponsored by the assessee, was held at New Delhi. For organising the Conference, the assessee received Rs. 3,00,000 from the Govern-ment -0f India as grant-in-aid and after meeting the expenses, was left with a balance of Rs. 2, 17,346.38, Further, the assessee received Rs. 265.50 as the share of profits on the sale of a book on Company Law, Rs. 5,371.82 as fee for arbitration. It. realised advances from its members for arbitration amounting to Rs. 20,000 from out of which a balance of Rs. 299.18 was left. The balance-sheet for the 494 accounting year shows that the assessee had in excess income of R.s.2,291.71 over the expenditure under the head 'income'.