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2015 (3) TMI 929 - AT - Income TaxEntitlement to the benefit under section 11 - AO while completing the assessment noticed that the assessee-trust advanced interest-free loans to certain other trusts treating such advances are in violation of the provisions of section 13(1)(d) read with section 11(5) - CIT(A) allowed the benefit - Held that:- Respectively following cases of Mamallan Educational Trust [2015 (3) TMI 966 - ITAT CHENNAI] and Young Men's Christian Association [2015 (3) TMI 967 - ITAT CHENNAI] we hold that advancement of interest free loans to other charitable institutions registered under section 12A of the Act having similar objects are not in violation of the provisions of section 13(1)(d) read with section 11(5) of the Act. In this case, admittedly the other charitable institutions to whom interest free loans were given by the assessee are registered under section 12A/12AA of the Act having similar objects. In such circumstances, there is no violation of the provisions of section 13(1)(d) read with section 11(5) of the Act in the case of the assessee by advancement of such interest free loans to such charitable institutions, we sustain the order of the Commissioner of Income-tax (Appeals) on this issue. - Decided against revenue. Disallowance of depreciation - Held that:- As relying on ITO v. Coimbatore Stock Exchange Ltd. [2013 (6) TMI 903 - ITAT CHENNAI] we allow the grounds of appeal of the assessee on this issue in allowing the claim of depreciation as a part of utilisation of the assessee. - Decided against revenue. Corpus donations - whether the corpus donations shall not be included in the total income as per the provisions of section 11(1)(d) of the Act? - Held that:- The Commissioner of Income- tax (Appeals) was of the view that since ₹ 82,70,000 out of corpus donations there is no specific directions/purposes for which it has to be used he has construed that it should form part of income though they are corpus donations. This finding of the Commissioner of Income-tax (Appeals) appears to be not correct. Section 11(1)(d) stipulates that voluntary contributions made with a specific direction that it shall form part of corpus of trust should not be treated as income of the previous year. The provision did not say that the purpose for which such donation is given should be specified. The requirement of the section will be satisfied once the donation is specifically for the corpus fund. In the circumstances, we hold that the entire corpus donations of ₹ 1,77,70,000 received by the assessee shall not form part of the income of the assessee as they are given towards the corpus fund. - Decided in favour of assessee.
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