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2012 (12) TMI 321 - AT - Income TaxDenial of exemption u/s 10(23C)(vi) - denial of claim was advancing of money to Total Diagnosis Private Limited - Held that:- The amount given by assessee to M/s. Total Diagnosis Private Limited was not a loan but was advance in pursuance to agreement to purchase the office space - the amount paid by the assessee society to M/s. Total Diagnosis Private Limited was immediately used by Total Diagnosis Private Limited for purchase of land on which building was to be constructed. On verifying the original agreement and found that stamps for executing the agreement was issued by vendor on 27.3.2005 vide entry no. 4115. All these notes were at the back of the original stamp on which agreement was executed. We also found the rubber stamp of date of issue of stamp by office of District Treasury on 24th March, 2005. Thus, the genuineness of agreement entered by the assessee is not in doubt. It is clear that the amount given by the assessee was not in the nature of loan but was an advance for purchase of office space and when ultimately the Total Diagnosis Private Limited could not give office space due to sanction being not given by Bhopal Municipal Corporation for construction of 4th and 5th Floor, the amount was paid back to the assessee with interest of Rs. 69 lakhs, thus, the transaction was a commercial transaction, where an interest was charged. Thus, there was no loss of any revenue in the hands of assessee society, even when the building could not be handed over to the assessee. Thus no violation of provisions of Section 13 for the advance given to the Total Diagnosis Private Limited for purchase of office space as it is not an amount lent but was in the nature of advance given for purchase of office space and hence exemption u/s 11 & 12 cannot be denied. The excess of income over expenditure is exempt u/s 11 & 12 - in favour of assessee. Disallowance of travelling expenses - Held that:- Trustees’ husband and wife both travelled to Delhi for necessary approval of ‘AICTE’. Minor daughter of Trustee aged 10 years had to be taken alongwith, because she could not be left alone only because the girl being the minor, she had to be taken along and could not be left alone, the expenditure incurred on travelling pertaining to such minor daughter cannot be declined. Furthermore, the amount is negligible and this cannot be treated as benefit to any persons, since these trips were wholly and exclusively for the purpose of society and not for personal purpose - merit in the action of CIT(A) in holding that assessee society has infringed provisions of Section 13 by giving advance to other societies - in favour of assessee. Assessing Officer is directed to recompute interest u/s 234D after giving appeal effect of this order.
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