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2013 (9) TMI 875 - HC - Income TaxExemption u/s 10(22) - Income of a university or other educational institution, existing solely for educational purpose and not for purpose of profit. - Whether Memorandum of Understanding as a evidence is an eye-wash - During the assessment year 1996-97, a payment of Rs. 10 lacs was made by the appellant assessee to Smt. Chandra Raj Laxmi. It was contended that such payment was made to siphon away the funds of the appellant assessee and the said state of affairs clearly indicates that the appellant assessee is not existing solely for educational purpose but also for purpose of profit. It has been the contention of the appellant assessee that the appellant assessee entered into a Memorandum of Understanding with Smt. Chandra Raj Laxmi - The Assessing Officer has not accepted the Memorandum of Understanding and has felt that the same had been created subsequently as an eyewash. Held that:- Smt. Chandra Raj Laxmi represented to be the Managing Director of M/s Bhanu & Sons Pvt. Ltd - Memorandum of Understanding stated that M/s Bhanu & Sons Pvt. Ltd. owns properties, as mentioned in the said Memorandum of Understanding - It is the contention of the appellant assessee that in connection with the said Memorandum of Understanding, the payment of Rs. 10 lacs was made - The Memorandum of Understanding suggests that the payments, to be made thereunder, are to be made to Smt. Chandra Raj Laxmi - Assessing Officer did not call upon the appellant assessee to produce Smt. Chandra Raj Laxmi before the Assessing Officer. The Assessing Officer did not take note of, how the sum of Rs.10 lacs paid by the appellant assessee to Smt. Chandra Raj Laxmi during the assessment year 1996-97 was adjusted by her in her returns. It does not appear, therefore, that the finding that the Memorandum of Understanding was an eyewash is founded on legal basis - Remit back the matter for reconsideration by the Assessing Officer.
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