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2017 (11) TMI 848 - AT - Income TaxApplication for Renewal of Exemption u/s 80G(5)(vi) rejected - claim disallowed on the ground that the loan given to wife of one of the Trustees was in violation of provision of section 11(5) - Held that:- There is no violation of the provisions of section 11(5) of the Act because the assessee trust has taken the adequate security by way of gold ornaments and the loan was secured and bearing interest @12% per annum which was more than the prevailing rate in the market. Therefore, this loan given by the trust is not for personal benefit of the trustee or wife the trustee. The assessee trust is charging interest more than the market rate and there is a proper security. The assessee trust is deriving interest on loan given to wife of one of the trustees and the loan is secured by the gold ornaments. Therefore, it cannot be said that loan had been given by the assessee-trust with inadequate security or free of interest, therefore, exemption u/s 80G(5)(vi) of the Income Tax Act, 1961 should not be denied. - Decided in favour of assessee.
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