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2017 (11) TMI 994 - AT - Income TaxDisallowing the claim u/s 11(2) and U/s 11(1)(a) - AO observed that giving and receiving funds between two trust having common trustees for mutual benefits is a clear violation of the provisions of section 13(1)(c) - purpose of accumulation was not specific, which is mandatory for accumulation u/s 11(2) - Held that:- We are of the view that when the Assessing Officer finds that the income which was set apart in any Assessment Year for future expenditure for charitable purposes has not been utilized for the charitable purpose, then he has to bring such non-charitable expenditure to tax in the year of its expenditure as per the provisions of section 11(3). But such expenditure for non-charitable purpose cannot be the basis for denial of exemption u/s.11. Therefore, the observation of the Assessing Officer that the assessee is not expending the set apart incomes of the earlier years in subsequent years for charitable purposes is not borne out of facts. In the assessee’s case under consideration, the assessee trust filed the Form no.10 and made the compliance and there is no any mistake on the part of the assessee. - Decided in favour of assessee.
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