Court held that construction activity by a state enterprise constitutes business activity regardless of its corporate statute.

The Supreme Court allowed the taxpayer's claim to deduct construction expenses by overturning the lower court's decision. The taxpayers argued that building and selling apartments constituted business activity under the Income Tax Act, despite their state enterprise statute prohibiting such operations. The court ruled that the statutory definition of business activity depends on the factual purpose of the activity, such as selling units via auction, rather than the literal content of the enterprise's statute, which had become obsolete following legislative reforms.