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2018 (4) TMI 1056 - AT - Income TaxDenial of exemption u/s 11 - payment made to the persons are related to the trustee or founder of the institution? - Held that:- No violation of Section 13(1) as in this case, it is not the case of the Revenue that the payment made to contractor was excessive and above market rate. Ms. Savitha and Ms. Swatika appear to be the daughters of the trustees. There was a payment said to be made to them. From the material available on record, it appears that the amounts were transferred to Ms. Savitha and Ms. Swatika and retransferred to the assessee-trust / educational institution on the same day. Therefore, it is obvious that the funds of the trust were not applied or used for the benefit of the above said Ms. Savitha and Ms. Swatika. The funds of the trust were applied for the benefit of the close relatives of the trustee or founder of the trust - no violation of Section 13 of the Act as contended by the Revenue. Since the amounts were transferred to the trust as disclosed in the accounts, copies of which are available in the paper-book, the CIT(Appeals) is not justified in disallowing the claim of the assessee. Loan taken for Lease of the computers - repayment of loan taken - Held that:- Admittedly, the loan was taken from M/s Hewlett Packard Financial Services (India) Pvt. Ltd. The funds were used by the assessee for the purpose of carrying on the activities of the trust. The repayment of loan either in the name of payment of rental or otherwise, has to be construed as application of income under Section 11 of the Act. The availability of computers in the premises of the assessee-trust or its institutions is not in dispute. No question of any disallowance for repayment of loan taken by the assessee-trust - the exemption claimed by the assessee is allowed. - Assessee appeal allowed.
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