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2019 (10) TMI 305 - AT - Income TaxExemption u/s 11 - violation of the provisions of section 13(1)(d) and 13(2)(h) - HELD THAT:- Assessee's shareholding in the four companies even if held prior to 1st June, 1973 would have been violative of section 13(2)(h) if any of its trustees [or any other person referred to in sub-section (3)] held shares in the four companies carrying more than 20% voting power. In the course of the proceedings, the Annual Reports of all four companies for the F.Y. 2011-12 were submitted. Reference was made to the schedule containing disclosure of the shareholders holding more than 5% equity shares of the company and it was pointed out that neither Mr. Ratan N. Tata, nor any other persons referred to in sub-section (3) held more than 5% equity/voting power in any of the four companies. The question of holding shares carrying more than 20% voting power in the companies does not arise. Being a chairman in a company does not amount to holding a 'substantial interest' therein in terms of the clear mandate of Explanation 3 to section 13 of the Act. Hence, the assessee has not violated the provision of section 13(2)(h) of the Act and hence, on both grounds assessee succeeds. Assessee trust has violated section 13(3)(b) - Tata Sons Ltd. has not made any contribution to the assessee, let alone contributing a sum in excess of ₹ 50,000/-. In the course of the assessment proceedings, no question was ever asked nor was any detail called for in this regard by the AO. Hence, I am of the view that this observation is factually incorrect and reversed. This additional ground is decided in favour of assessee. Exemption under section 11 of the Act is not to he denied to the entire income of the assessee. However, as held that the assessee in the present case has not violated any part of section 13 Allowance of carry forward deficit on account of excess expenditure while granting benefit under of section 11 - We allow the carry forward of the ‘deficit’ and dismiss this issue of revenue’s appeal.
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