Profits from Kuri Business Held Under Trust Eligible for Exemption u/s 11 of ITA: ITAT [Read Order]
The petitioner counsel informed the Court that the petitioner had not participated in the original proceedings, which led to the order dated 10.11.2023, and that the dispute pertained only to a delay in tax payment, not the tax liability itself.
![Profits from Kuri Business Held Under Trust Eligible for Exemption u/s 11 of ITA: ITAT [Read Order]](https://images.taxscan.in/h-upload/2025/06/28/2055619-kuri-business.webp "Profits from Kuri Business Held Under Trust Eligible for Exemption u/s 11 of ITA: ITAT [Read Order]")
The Cochin Bench of Income Tax Appellate Tribunal ( ITAT ) held that profits earned from the Kuri business run by a registered charitable trust were eligible for exemption under Section 11 of the Income Tax Act,1961. Sree Narayana Dharma Paripalana,appellant-assessee,was a registered charitable trust under Section 12A of the Income Tax Act. It filed its return for AY 2012-13...
The Cochin Bench of Income Tax Appellate Tribunal ( ITAT ) held that profits earned from the Kuri business run by a registered charitable trust were eligible for exemption under Section 11 of the Income Tax Act,1961.
Sree Narayana Dharma Paripalana,appellant-assessee,was a registered charitable trust under Section 12A of the Income Tax Act. It filed its return for AY 2012-13 on 15.03.2013, declaring income of ₹11,39,180 after claiming exemption under Section 11.
The Assessing Officer (AO) completed the assessment under Section 143(3) on 27.02.2015 and assessed the income at ₹25,75,620 by treating the earnings from the Kuri business as taxable business income, rejecting the claim that it was held for charitable purposes.
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The appellant challenged the order before the Commissioner of Income Tax (Appeals)[CIT(A)], who confirmed the AO’s view, holding that the Kuri business was not incidental to the trust’s charitable objectives.
The assessee aggrieved by the CIT(A)’s order appealed before the tribunal.
The assessee counsel stated that in earlier years, the tribunal had allowed exemption under Section 11, relying on the Kerala High Court’s decision in Biowin Agro Research v. ITO (Exemption). It was held that if business income was used for genuine trust purposes or was incidental to its objectives, exemption could be granted.
The departmental representative supported the lower authorities and argued that there was no need to interfere with their findings.
A Single member bench of Inturi Rama Rao (Accountant Member) reviewed the submissions and records, and noted that the assessee trust was running a Kuri business. The profits were used to achieve the trust’s objectives.
Since the business was held under the trust and the income was applied for charitable purposes, the tribunal held that the profits were eligible for exemption under Section 11. It also noted that the issue had already been decided in favour of the appellant in earlier years. The ITAT therefore directed the AO to delete the addition.
Therefore,the appeal filed by the assessee was allowed.
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