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2015 (8) TMI 1152 - AT - Income TaxEligibility to claim exemption u/s 11 - whether the transactions with Kapil Chit Funds are in violation of the provisions u/s 11(5) of the I.T.Act? - Held that:- The assessee has spent the entire income earned in the year for the objects of the trust. As has incurred excess amount, there is no surplus amount which needs to be invested u/s 11(5). Section 11(5) comes in to operation only when Trust has accumulated or set part the amount u/s 11(2). In the case of the assessee, there is a no surplus fund and hence, the question of investment or deposit as specified u/s 11(5) does not arise. Contribution to chit fund in this case is not an investments or deposit as specified u/s 11(5), it is, as submitted, only an arrangement for better management of funds of the assessee. The assessee has been complied with the provisions of section 11(1)(a) by applying entire amount for the objects of the trust. Therefore, respectfully following the Co-ordinate Bench decision of Vishakhapatnam reported in Sri Sivani Educational Society case (2015 (8) TMI 405 - ITAT VISAKHAPATNAM) it is concluded that there is no violation of section 11(5) and the assesse is eligible to claim exemption u/s 11. - Decided in favour of assessee.
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