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2015 (3) TMI 711 - GUJARAT HIGH COURTDisallowance of exemption u/s.11 - ITAT confirming the order passed by the CIT(A) directing the Assessing Officer to restrict the disallowance of exemption u/s.11 of the Act in respect of deposits in contravention of section 11(5) read with section 13(1)(d) of the Income Tax Act, as against denial of exemption on the entire income by the Assessing Officer - Held that:- Tribunal was justified in upholding the order passed by CIT(A)who has very clearly observed that the provisions of Section 11(1)(a) are very clear and provide that the income derived from the property held under trust shall not be included in the income to the extent it is applied for the charitable or religious purposes (expenses incurred during the year) or accumulated/set apart to be applied for that purpose in future out of 75% to which the restriction u/s 11(5) applies. In the case of Fr. Mullers Charitable Institutions (2014 (2) TMI 1033 - KARNATAKA HIGH COURT) it was held that a perusal of section 13(1)(d) of the Income-tax Act, 1961 makes it clear that it is only the income from such investment or deposit which has been made in violation of section 11(5) of the Act that is liable to be taxed and violation under section 13(1)(d) does not result in denial of exemption under section 11 to the total income of the assessee and that where the whole or part of the relevant income is not exempted under section 11 by virtue of violation of section 13(1) (d) of the Act, tax shall be levied on the relevant income or part of the relevant income at the maximum marginal rate - Decided in favour of assessee.
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