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2013 (8) TMI 39 - AT - Income TaxEntitlement for exemption u/s 11 - whether there was no violation as mentioned under Section 13(1)(c)(ii) - noted by AO that the amounts were due from two concerns in which Managing Trustee of the assessee, namely, Shri P. Subramani was an interested party - Held that:- Treatment of transactions in the books of accounts are prima facie evidence of the nature of such transactions. If an assessee wants to say that payments were for a different purpose than what was shown by it in its account, then the burden of evidence which lies on it is much more rigorous. Except for two Memorandum of Understandings, nothing was brought on record by the assessee. Such Memorandum of Understandings were blindly believed by the CIT(Appeals) without appreciating that these were nothing but self- servicing documents, and not sufficient to dislodge the nature of the transaction recorded by the assessee in its books. Thus, for the impugned assessment year, what was find is that as at the end of the relevant year, even if the three concerns were considered together, a sum of Rs. 1,41,05,523/- was due to the assessee. Assessee has no case that any interest was received from such parties to which money was lent. There was no security whatsoever given to the assessee. Thus there was an indirect benefit to Shri P. Subramani, Managing Trustee of the assessee- Trust and this fell clearly within the scope of Section 13(1)(c) r.w.s. 13(2)(a) - Such violation did warrant denial of exemption claimed under Section 11, therefore, CIT(Appeals) fell in error in blindly following the order of preceding assessment year and accepting the case of the assessee - appeal filed by the Revenue is allowed.
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