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2014 (9) TMI 957 - AT - Income TaxDepreciation on assets purchased by the assessee-trust - Held that:- The hon'ble Punjab and Haryana High Court in the case of CIT v. Market Committee Pipli [2010 (7) TMI 374 - Punjab and Haryana High Court ] wherein held that the income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining percentage of funds which had to be applied for the purpose of the trust. There is no double deduction claimed by the assessee. Thus the assessee is entitled for claiming depreciation. - Decided against revenue. Disallowance of payment made for contract work to a firm owned by one of the managing trustees of the assessee - Held that:- As decided in assessee's own case for the assessment year 2009-10 [2015 (6) TMI 346 - ITAT CHENNAI] wherein similar issue has been decided in favour of the assessee wherein the Commissioner of Income-tax (Appeals) has given a categoric finding that in cases of civil construction contracts, especially were no proper books are maintained the Act recognises normal profit margins at 8 per cent. Whereas, the firm M/s. Sri Vekkaliamman Builders has earned a profit of 5.8 per cent. which is very reasonable. We are of the considered opinion that since, the contract was awarded on competitive basis and the profit earned is reasonable, the provisions of section 13(2)(c) are not violated. - Decided in favour of assessee. Advances made to M/s. SAMS Pvt. Ltd. in violation of the provision of section 13(1)(c) - Held that:- he assessee has not given any reason as to why the amount advanced to M/s. SAMS Pvt. Ltd., has not been so for appropriated towards charges for using infrastructure facilities. As per the contentions of the Revenue, ₹ 1.94 crores are outstanding as on March 31, 2011 towards fee for services. The findings of the Commissioner of Income-tax (Appeals) on the issue are sketchy. We do not agree with the observations of the Commissioner of Income-tax (Appeals) that the company is not benefitted by the trust. The assessee has not given the details of charges to be paid/adjusted for using infrastructure facilities provided by M/s. SAMS Pvt. Ltd. The said payments may not fall within the mischief of section 13(3)(a) read with section 13(1)(c) of the Act, but the reasonableness of the charges has to be ascertained to ensure compliance of the provisions of section 13(2)(c) of the Act. the issue needs a revisit to the Commissioner of Income-tax (Appeals) for fresh consideration - Decided in favour of revenue for statistical purpose. Investment made by the assessee in gold bullions in violation of the provisions of section 11(5) - Held that:- Purchase of gold by the assessee was not application of funds but an investment in gold bullion. The assessee has made investment in gold bullion in violation of the provisions of section 11(5). Accordingly, the income earned by the assessee from the sale of gold is liable to be taxed, in accordance with law. - Decided in favour of revenue.
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