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2012 (11) TMI 759 - AT - Income TaxApplication of Income of Society through another society - exemption u/s 11 - benefit to founders attracting provisions of section 13(1) - Following the decision of court in case of [CIT v MatriSeva Trust 1999 (3) TMI 34 - MADRAS HIGH COURT ] Held that:- As per the Bye Laws of the other Arboretum societies, the members cannot derive any benefit or have right over the property of the Society on its dissolution. Hence the amount spent by the Assessee for the maintenance of Forest land should be considered as application, notwithstanding the fact that the forest lands are held by other societies. In the circumstances such expenses incurred by the Assessee Society, either by themselves or through other societies with similar objects in furtherance of the objects of the Society should be considered as application of the Society’s income. Whether any part of the application of donated funds by the assessee has directly or indirectly benefited founders of the assessee society – It was stated that in the case of the other societies also the members are not entitled any income of right to any property of the society on its dissolution. This being so the other societies are no different from the assessee society and the Department has not made a case as to how the common management members would derive benefit from the monies spent by the Assessee society for maintenance of the forest lands of the other societies - individual members of the William Frederick Durr family, who are Executive Committee members of the charitable society, are not the beneficiaries of this valid application of monies by the assessee (DVA) society - application of income by the assessee (DVA) did not violate the provisions of S.13(1)(c) and hence the assessee’s claim u/S. 11 is upheld - In the result, the appeal of the Department is dismissed.
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