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2011 (9) TMI 1133 - ALLAHABAD HIGH COURT
Assessment of trust - Interest Free Loan given in violation of Provisions u/s 13(1)(c) and 13(2)(a) - Assessee Society gave interest free loan to Treasurer of the society and no provision for accrued interest was made by him. A.O. added the surplus to the total income of assessee society - HELD THAT:- In the case of CIT VERSUS VIJETA EDUCATIONAL SOCIETY [2011 (8) TMI 805 - ALLAHABAD HIGH COURT], it was held that, the interest was charged, as alleged by the assessee, it should have been reflected in the books of accounts of the assessee as well as in the audit report but the same was not reflected in any document. In the instant case, the assessee was liable to show this interest as income in the books of account as per mercantile system of accounting. Thus, the A.O. has rightly concluded that the appellant has given interest free loan to treasurer is in violation of the provisions of Section 13(1)(c) and also giving loan without any adequate surety in violation of Section 13(2)(a).
In the present case, A.O. has denied exemption u/s 11 in view of the provision of Section 13(1)(c) & 13(2)(a). Respectfully following the decision made in aforementioned case, we, therefore, restore the order passed by the A.O. - Decision against Assessee.
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