| Case ID |
049640ed-7fcd-4ca5-83aa-6d6978bef7ca |
| Body |
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| Case Number |
IT REFERRED CASE Nos. 43 AND 44 OF 1978 |
| Decision Date |
Jul 19, 1978 |
| Hearing Date |
|
| Decision |
The Karnataka High Court held that the income derived by the Bangalore Stock Exchange Ltd. from the activities it engaged in was exempt under Section 11 of the Income Tax Act, 1961. The court determined that as long as the exchange's activities were not for profit and the income generated from membership and listing fees were applied for charitable purposes, the entity was entitled to claim exemption despite some references in its memorandum that might not be of charitable nature. The court emphasized that the income should not be utilized for private benefit and must be applied for the stated charitable objectives. Ultimately, the court ruled in favor of the assessee, allowing the exemption under the relevant provisions of the law. |
| Summary |
In the landmark case of Commissioner of Income Tax v. Bangalore Stock Exchange Ltd., the Karnataka High Court addressed the issue of tax exemption for charitable trusts under the Income Tax Act, 1961. The court evaluated the nature of income derived from membership and listing fees by the Bangalore Stock Exchange and determined its eligibility for exemption under Section 11. The court highlighted that the primary objects of the stock exchange were of general public utility, focusing on the facilitation of transactions and support for members rather than profit-making activities. This case is significant for entities seeking tax exemptions under similar circumstances, as it clarifies the conditions under which income can be considered exempt, emphasizing the importance of applying income for charitable purposes. The decision reinforces the notion that activities characterized as 'non-profit' can still qualify for tax relief, provided they align with the charitable objectives outlined in their governing documents. The ruling serves as a benchmark for other organizations navigating the complexities of tax exemptions in India. |
| Court |
Karnataka High Court
|
| Entities Involved |
Bangalore Stock Exchange Ltd.
|
| Judges |
E.S. Venkataramaiah,
M.K. Srinivasa Iyengar
|
| Lawyers |
S.R. Rajasekharamurthy,
G. Sarangan
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Bangalore Stock Exchange Ltd.
|
| Citations |
1978 SLD 846,
(1978) 115 ITR 493
|
| Other Citations |
Bangalore Race Club v. CIT [1970] 77 ITR 435 (Mys.),
CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC),
CIT v. Dharmodayam Co. [1974] 94 ITR 113 (Ker.),
Dharmodayam Co. v. CIT [1962] 45 ITR 478 (Ker.),
Loka Shikshana Trust (Sole Trustee) v. CIT [1975] 101 ITR 234 (SC),
CIT v. Indian Chamber of Commerce [1971] 81 ITR 147 (Cal.),
CIT v. Dharmodayam Co. [1977] 109 ITR 527 (SC),
Indian Chamber of Commerce v. CIT [1975] 101 ITR 796 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
11,
2(15)
|