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2018 (6) TMI 1099 - AT - Income TaxDenying exemption u/s 11 and 12 - assessee paid interest free deposit - denying of application of income in respect of donation given to Pacific Society for Education and Social Activities - Held that:- No doubt, NRPL is a specified person but then the Act does not bar any normal transaction done with a specified person. All that is provided in the provisions of section 13 of the Act is that any transaction with specified person should not enure any benefit to that person directly or indirectly. If we consider the transaction with NRPL in its right perspective, the only logical conclusion comes is that no benefit has been passed on to NRPL by the assessee-society. The assessee paid interest free deposit only when NRPL has purchased the land and leased out to the assessee on which the assessee constructed the school building and started its operation. We are of the considered opinion that since no benefit has been enured to the specified person from the impugned transaction, denial of exemption u/s 11/12 of the Act is uncalled for. We, accordingly, set aside the findings of the CIT(A) and direct the AO to allow exemption u/s 11/12 of the Act. Donation to PSESA - PSESA is not a registered society during the year under consideration u/s 12A - Held that:- ‘Charitable purpose’ has been defined u/s 2(15) of the Act and education is very much a charitable purpose. It is also an undisputed fact that PSESA was registered u/s 12A and 80G of the Act w.e.f. A.Y 2015-16. While granting registration u/s 12A of the Act revenue has to see objects of the trust and since PSESA has been registered u/s 12A of the Act, the revenue has accepted its objects. Merely because PSESA was not registered u/s 12A of the Act for the year under consideration that cannot be a reason for not allowing corpus donation of ₹ 8.02 crores to the assessee society, keeping in mind that the donee society is also a like minded society. We accordingly direct the AO to allow the corpus donation of ₹ 8.02 crores as application of income. - Decided in favour of assessee
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