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2011 (12) TMI 375 - AT - Income TaxDiversion by overriding title in respect of infrastructure contribution is untenable - AO found that assessee had claimed to be maintaining an "infrastructure fund" to which a fixed portion of its receipts is credited and out of which infrastructure related expenses are incurred - it was submitted by the assessee that State Government has a overriding title on these receipts and, therefore, they do not form part of the total income of the assessee. - held that:- The office memorandum specifically provides that 80 per cent of the amount from this account would be spent on capital expenditure and 20 per cent can be spent on revenue account - it reveals that assessee has source of income from more than 18 counts, out of that certain incomes are miscellaneous income, rental income, interest income on FDRs - According to the assessee, the Government had issued a memorandum on 15th Jan., 1998 and by virtue of this office memorandum, there is diversion of income at source which relates to this infrastructural fund account and, therefore, the amounts transmitted in this account do not belong to the assessee - learned first appellate authority in asst. yr. 2007-08 has rightly observed that argument of the assessee demonstrating the 'infrastructure funds' as a separate entity, independent of assessee is a fiction - It is not registered under s. 12A of the Act and claimed the benefit of exemption under ss. 11 and 12 of the Act - Decided against the assessee
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