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2015 (11) TMI 982 - AT - Income TaxExemption under section 11 denied - According to the Assessing Officer, the assessee had committed an act in violation of section 13(1)(c) - Held that:- In this case, the funds have been transferred from the assessee-trust to the accounts of Mahalakshmi Garments Exports, wherein Shri S. Kunjithapatham is the proprietor. The peak debit balance in the books of account of the trust as on October 8, 2009 was at ₹ 20,98,480. According to the learned authorised representative, the outstanding balance due to one of the trustees, Smt. Mahalakshmi Kunjithapatham was ₹ 2,22,74,985. If these two accounts are jointly considered, there is no question of any benefit to the trustees. In our opinion, these arguments of the learned authorised representative are farfetched. Each trustee has to be considered independently and distinctly. In the present case, there is a transfer of funds to one of the trustees' benefit, Shri S. Kunjithapatham, who is the proprietor of Mahalakshmi Garments Exports. In our opinion, the expression "person" used in section 13(1)(c)(ii) includes a person, who is the trustee. Thus, the amounts are transferred to Shri S. Kunjithapatham for his benefit and the outstanding balance in the name of Smt. Mahalakshmi Kunjithapatham cannot be clubbed together with funds outstanding from another trustee and each one is a person in terms of section 2(31) of the Act. That being so, the assessee-trust having transferred the income or the property to the benefit of Shri S. Kunjithapatham is construed to be in violation of section 13(1)(c)(ii) of the Act. Accordingly, we uphold the order of the Assessing Officer. - Decided against assessee.
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