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29. The Ld. AR further submits that the charitable institution can carry on business activities and the same is evident from the provisions of section 11(4A) of the Act. He submits that the sub-section (4A) states that the exemption under section 11 of the Act would not be available to the profits and gains of the business, unless the business is incidental to the attainment of the object of the trust. He submits the assessee's main object is education, being charitable activity and sale of books and uniform are only towards the attainment of assessee's main object. He argued that the AO's order is incorrect holding the assessee is not carrying out any charitable activity.

37. What emerges from the reading of the provisions and the Circular is that a trust or institution, whose purpose is advancement of any other object of general public utility, and recognised as charitable, under the fourth limb of Section 2(15) of the Income-Tax Act, and predominantly engages in activities in the nature of trade, commerce or business, should not be permitted to escape from taxability, with the mask, "charitable". In the case on hand, the glaring omission on the part of the revenue is to consider, as to whether, sale of lands was necessitated? Whether it was incidental towards attainment of the objectives of the trust?, and more particularly, when the income was wholly utilised only for achieving the objectives of charitable purpose of the trust.

49. On careful reading of the above decision of the Hon'ble High Court of Madras, we note that in that case, the assessee, a trust, is running educational institutions, in the name of M/s. M. S. R. Junior Colleges at Ammanabrolu, Chinnaganjam, C. S. Puram, Gudlur, J. Panguluru, Kan- dukuru, Kanigiri, Kavali, Kurichedu, Lingasamudram, Ravinuthala, San- thanutana Padu and Valaparla and MSR Degree Colleges at Kavali, Kondepi and Vinjamuru, registered under section 12A(a) of the Act, filed return of income for the AY 2010-11 on 21-09-2010, admitting nil income. The Assessing Officer noticed on verification of the return of the income and other details that the assessee had disclosed an amount of ₹. 1,62,76,519/-, as profit on sale of land. Against the query raised by the Assessing Officer, the assessee explained that in pursuance of its objectives, purchased 71.89 acres of land in survey Nos. 601, 607, 611 and 598 in Nellore Bit-II, Nellore during the years 1986-87 for starting medical college and old age homes, but, however, enormous delay crept in obtaining necessary permission for starting these institutions. In the meantime, attempts at encroachment of the land began being made by various elements and it was decided to abandon the idea of medical college and old age home and decided to confine to running junior and degree colleges, drinking water and mortuary vans in the district of Nellore and Prakasam in A.P. When the above referred land was proposed to be disposed of, there were no buyers in view of the huge stretch of land. Therefore, the assessee obtained permission from town planning authorities, converted the land into small plots and started selling the land in the layout from the financial year 1994-95 and utilized the same for the charitable activities of the trust. It is therefore submitted that there was no business motive when the "assessee acquired the land and the sale of land in the form of plots is only to make the land better saleable and also to realize better price, which had been thoroughly scrutinized in the assessment of earlier years and the assessee passed the test convincingly. After considering the submissions of the assessee, the Assessing Officer observed that the assessee has purchased the said land at ₹. 49 per sq. yard, sold the same at ₹. 5,500 per sq. yard, by making bumper profits, the Assessing Officer held that the activity of the assessee is only a commercial activity, not falling under any of the charitable activities, as per the objects of the trust, further, said activity does not fall under any of the limbs defined in section 2(15) of the Act, viz., relief to poor, education, medical relief and not even under the category, "any other object of general public utility" passed an order on 31.03.2013 and brought to tax, a sum of ₹.1,62,76,519/-, under the head "Income from business". The ld. CIT(A) held the order of the Assessing Officer is not justified. The ITAT also confirmed the order of the ld. CIT(A). Having aggrieved by the order of the ITAT, the Revenue filed an appeal before the Hon'ble High Court of Madras. By referring to the decision in the case of G. Venkataswami Naidu & Co. v. CIT [1959] 35 ITR 594 (SC) and in the case of Raja J. Rameshwar Rao v. CIT [1961] 42 ITR 179 (SC) as well as considering the CBDT Circular No. 11 of 2008 dated 19.12.2008, extracting relevant para 2 of the said circular at para 32 of the above decision, the Hon'ble High Court was pleased to hold that the profit from sale of land owned by the assessee, an educational trust, could not be treated as business income and was eligible for exemption under section 11 read with section 2(15) of the Act as activity of sale of land was incidental to objects of Trust and said profit had been applied for objects of Trust.

50. In the present case, as we have discussed above in the aforementioned paragraphs, the assessee was contending after the discontinuation of its Teachers Education College which was running from 2003 onwards, the assessee decided to continue its educational activities by acquiring land and construction of school building thereon and admittedly the assessee acquired land of 11.5 acres in Coimbatore but unable to construct school building because of want of approval which is pending before Government of Tamil Nadu. We find the assessee in order to achieve its main object of education, the surplus of funds arising out of sale of books, uniform etc are invested in nationalised banks to utilize the same for construction of building after getting building construction permission which is evident from Form-10 disclosure available before AO. Therefore, we find the facts and circumstances on hand and the facts and circumstances before the Hon'ble High Court in the case of CIT v. Sri Magunta Raghava Reddy Charitable Trust (supra) are similar and identical, and thus, in the present case, we find the revenue generated through sale of books, uniform etc. could not be said to be not incidental to the attainment of objects of the assessee. In view of the above decision of the Hon'ble High Court of Madras in the case of CIT v. Sri Magunta Raghava Reddy Charitable Trust (supra), the submissions made by the ld. DR in the written submissions at pages 8 to 12 of the paper book Volume II are not acceptable. Thus, respectfully following the decision of the Hon'ble High Court of Madras in the case of CIT v. Sri Magunta Raghava Reddy Charitable Trust (supra), we hold the activity of sale of uniforms, textbooks, etc. and the excess of income over expenditure arising thereon which are disclosed in Form-10A are incidental to the attainment of objects of the assessee. Therefore, the assessee is entitled to the benefit of section 11 of the Act for the year under consideration, accordingly, we hold so. Thus, grounds raised by the assessee in ground No. 3 (3.1 to 3.7) on merits are allowed.