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2017 (12) TMI 1682 - AT - Income TaxEligibility to exemption u/s 11 - exemption u/s 10(23C) - charitable activity or not? - assessee had advanced interest free loan to one Educational Society, which as per AO was a specified person u/s 13(3) - AO held that the assessee was ineligible for exemption since he found that the main object of the assessee was not education but giving loan and advance and building capital - HELD THAT:- In the present case the loan has been given by one society to another having similar objects and both societies are registered u/s 12A. Therefore, we agree with the CIT(Appeals) that the impugned advance did not violate the provisions of section 13(1)(d) r.w.s. 11(5) of the Act also. We concur with the CIT (Appeals) that the assessee by giving advance to M/s Baba Amarnath Educational Society had not violated the provisions of section 13(1)(c) read with section 13(3) or section 13(1)(d) r.w.s. 11(5) of the Act and, therefore, there was no reason to deny exemption claimed by the assessee u/s 10(23C)(vi). We are also in agreement with the assessee that nothing has been brought on record by the Revenue to prove that the main object of the assessee actually was giving loans and not providing education. Even the identical allegation of the Ld.DR vis-a-vis the entire group we find remains unproved since the table relied upon by the Ld.DR in support of its contention reflects only the loan given by the assessee and two other trusts of the group to M/s Baba Amarnath Trust. The same has already been explained by the Ld.Counsel for the assessee as having been given to lend financial support to the said Trust in the initial years of its setting up, which fact has not been controverted by the Revenue. Even otherwise it fails to bring to light how the entire group was involved in creating capital only. Even the reference to the transaction between Shiva Educational Trust and Sachdeva Building Contractors Pvt. Ltd. has no relevance to the issue, since as rightly pointed out by the Ld.Counsel for the assessee no disallowance/addition has been made on account of the same We hold that there was no basis at all for denying exemption to the assessee society u/s 10(23C) (vi) - Decided against revenue
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