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2017 (1) TMI 954 - AT - Income TaxExemption under section 11 - shares held by assessee - rightful owner of shares - denial of claim for the alleged violation of section 13 (1) (d) (iia) - addition to the corpus donations - Held that:- We find that assessee has received shares of Delhi Guesthouse Pvt. Ltd., from the settler of the trust and could not be disposed off immediately due to the conflict that arose amongst the legal hairs of the settler in respect of the partition of the assets which included the impugned shares of Delhi Guesthouse Private Limited. The legal heirs approached Hon’ble Delhi High Court by way of a civil suit in which Hon’ble court had passed an order restraining the parties from de-alienating from any of the assets held by them. In our considered opinion, under such circumstances assessee could not be considered to be a legal owner of the shares during the period F.Y 2000-04 As the word used in the section 13(1)(d)(iii) is “held”, it implies ownership of the assessee to the exclusion of all others which is not the case here. In a considered view, the assessee was not physically in rightful possession of the shares so as to enable it to comply with the provisions of section 11 (5) of the Act. The assessee was not in a position to dispose of these shares due to lis pendence before Hon’ble Delhi High Court though the shares were bequeathed to assessee by way of a Will in the F. Y. 2004-05. - Decided against revenue Payment made for non charitable activities - Held that:- As for conversion of property from lease hold to free hold, the appellant trust being a shareholder, has contributed towards share of such charges. It is further noticed that Executor of estate Dr. Bhai Mohan Singh granted temporary loan of ₹ 3,33,57,000/- to the appellant trust, which was paid by the appellant trust towards conversion charges which cannot be said as payment has been made for non-charitable activities and for commercial consideration. - Decided in favour of assessee
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