Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 151 - AT - Income TaxExemption u/s 11 - violation of provisions of section 13(1)(c) - specified person - the trust is operating buses to transport the students at free of cost. In case of breakdown, the Managing Trustee offers the vehicles of his own transport business to ferry the students - HELD THAT:- AO was of the view that Bharat Shah was a person belonging to the prohibited category within the meaning of section 13(3)(a) and section 13(3)(cc) and since the income or property of the institution had been lent to such a person for any time during the previous year relevant to AY 1989-90 and 1990-91, without adequate security and adequate interest, the legal fiction in Sub-section (2) of section 13 of the Act would come into play and the income or property of the institution shall, for the purpose of Clause (d) of sub-section (1) of section 13 of the Act, be deemed to have been applied for the benefit of the prohibited category of persons under Sub-section (3) and thereby, the Hon’ble Supreme Court affirmed the view of the Assessing Officer. The decision of the Hon’ble Jurisdictional High Court in the case of CIT v. Working Women’s Forum [2014 (8) TMI 681 - MADRAS HIGH COURT] is not in favour of the Revenue, wherein, it was held that denial of exemption should only be to the extent of the income which is violative of section 13(1)(d) of the Act and not the total denial of exemption under section 11 of the Act. Against the above decision, the SLP filed by the Department in this regard has been dismissed by the Hon’ble Supreme Court and thus, the law laid down by the Hon’ble Jurisdictional High Court in the above case has become final. Under the above facts and circumstances, we are of the considered opinion that the ld. CIT(A) has rightly followed the above decision of the Hon’ble Jurisdictional High Court and directed the Assessing Officer to compute the value of the benefits extended to the trustee to the extent of violation and brought to tax at the maximum marginal rate. Thus, the ground raised by the Revenue stands dismissed.
|