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2014 (7) TMI 990 - AT - Income TaxExemption u/s 11 - Accumulation of income - Amount added being less that 15% of total income – Specified funds u/s 35AC - Held that:- the copies of the past assessment orders reveal that the assessee has been treated as a public charitable trust in the earlier years – there was no basis for arriving at a conclusion that the assessee is engaged in the business of setting up and running of vocational training so as to presume that the assessee as a business entity in the year - Following the decision in ASSTT DIRECTOR OF INCOME TAX Versus STERLITE FOUNDATION (FORMERLY KNOWN AS VEDANTA FOUNDATION)[2013 (12) TMI 1056 - ITAT MUMBAI] - the assessee has not diverted any specified funds of 35AC projects towards non specified projects whereas the aseesee has spent corpus donation for 35AC projects and the same cannot be the basis for denying the benefits of exemption as the latter is not prohibited by the provisions of the Act – Decided in favour of Assessee. Donation made to another charitable trust – Held that:- According to the CBDT circular No.1132 dated 5.1.1978, the payment of a sum by one charitable trust to another for utilisation by the donee trust towards its charitable objects is proper application of income for charitable purposes in the hands of the done trust and the donor trust will not lose exemption u/s 11 of the Act - Following the decision in ASSTT DIRECTOR OF INCOME TAX Versus STERLITE FOUNDATION (FORMERLY KNOWN AS VEDANTA FOUNDATION) [2013 (12) TMI 1056 - ITAT MUMBAI] - the charitable trust will not lose its exemption u/s 11, if it passes some money to another charitable trust, for utilisation by the donee trust towards its charitable purposes – thus, the order of the CIT(A) is set aside – Decided in favour of Assessee.
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