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2011 (8) TMI 461 - HC - Income TaxSection 13(1)(2)(a) of the Income-tax Act, 1961 - assessee is a society registered under the Societies Registration Act, U.P and is running an educational institution - loan outstanding against Treasurer of the society and no interest had been charged nor any provision for accrued interest was made - AO contended that concluded that the funds of society were diverted for personal benefits of the Treasurer - Thus exemption claimed under section 11 was denied to the assessee-society in view of the provisions contained in section 13(1)(c) and 13 (2) (a) - clause (c) of section 13(1) renders the entire income of trust or charitable institution liable to tax even if only part of income is directed to be applied for the benefit of the specified persons. The Legislature, however, also creates a fiction and enumerates in clauses (a) to (h) of sub-section (2) a list of circumstances in which the income shall be deemed to have been used or applied for the benefit of the specified persons - in this case beneficiary is not covered by the list of persons mentioned in section 13 (3) of the Act - Decided in favour of Revenue.
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