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2018 (4) TMI 309 - AT - Income TaxEligibility to exemption u/s 11 & 12 - funds of the appellant trust were utilized for the personal benefit of trustees of the appellant trust - car used for the purpose of the school education - Held that:- There is no finding to the extent that how the car has been used for the purpose of the school education and the use for the purpose of trust so as to be eligible for exemption u/s 11 of the Income Tax Act, 1961. The same needs to be verified. Therefore, the order of the CIT(A) is set aside and the matter is remanded back to the file of the Assessing Officer for verifying all the relevant materials. Transaction between the appellant trust and M/s Godwin Construction Pvt. Ltd. - AO did not accept the explanation of the assessee mainly on the ground that the transaction between two interrelated parties by way of memorandum cannot be treated as reliable - Held that:- CIT(A) is right in holding that the transactions referred to by the Assessing Officer are between the trust and a company which is engaged in the business of real estate development. There is no bar in the statute that a trust which is claiming exemption u/s 11 cannot have commercial transaction with a company in which the trustees are directors. The only condition in such transaction can be that the transaction should be at appropriate value and no undue benefit accrues to either of the transacting parties. The copy of account of the assessee trust as appearing in the books of the company was filed before the Assessing Officer. Further, there is no finding by the Assessing Officer that the asset claimed to be purchased by the assessee trust was not recorded in the books of trust as on the date of search. Thus, there is no need to interfere with the findings of the CIT(A).
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