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2021 (2) TMI 640 - AT - Income TaxExemption u/s 11 - Denial of exemption as assessee has allowed benefit to the persons specified u/s.13 (1)(c) allowing various loans and advances to trustees or companies, in which trustees are interested, thereby violated provisions of section 13(1)(c) - HELD THAT:- Advance given to M/s. Star Educational Trust and Shri M.G. Bharathkumar, were ultimately used by M/s. Star Educational Trust for the purpose of imparting education and there was no finding of fact from the authorities that any part of income was directly or indirectly benefited to the persons specified u/s.13(3) - As regards, advance given to M/s. Mahaajay Spinners India Pvt. Ltd., the evidence brought on record clearly indicate that said advance was given in the normal course of activity of the trust for purchase of uniforms and coats for which necessary evidences including bill for supply of uniforms was placed on record. Therefore, all 3 advances cannot be considered as income or property of the trust was directly or indirectly allowed to the benefit of any person referred to sub-section (3) of section 13 of the Act. AO was erred in denying the benefit of exemption u/s.11 of the Act, to the trust for contravention of provisions of section 13(1)(c) of the Act. The ld.CIT(A) although has accepted the arguments of the assessee, in so far as advance given to M/s. Star Educational Trust and Shri M.G. Bharathkumar, but in so far as advance given to M/s. Mahaajay Spinners India Pvt. Ltd., held that said advance was violative of section 13(1)(c) of the Act, without assigning any reasons - in so far as three advances considered by the ld AO, there is no violation of section 13(1)(c) of the Income Tax Act, 1961 and accordingly, there is no reason to deny exemption u/s 11 of the Act, to income of the trust. Hence, we direct the ld. AO to allow the benefit of exemption u/s.11 of the Act, as claimed by the assessee. - Decided in favour of assessee.
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