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2009 (6) TMI 333 - HC - Income TaxExemption u/s 10(22) denied - misutilisation of funds - remuneration paid to the wife and children of the managing trustee of the trust and the electricity bills towards his residence - Tribunal held that exemption u/s 10(22) cannot be denied on the basis of the provisions of section 13(2B)(sic) of the Act ? - misuse of funds by managing trustee of the trust – income of trust were utilized personally by Managing Trustee - HELD THAT:- Payments have been made to the chairman and managing trustee and the legal advisor of the trust and the family members to purchase dental equipments and towards electricity charges of chairman's house. The undisputed fact of appointment of family members to the important posts of the trust and payment of remuneration to them is also clearly extracted. The payment made is out of unexplained income of the assessee. The agreement of sale and the sale deed and payments made are in the name of Sri Sadashivan, chairman-cum-managing trustee of the trust and not in the name of the trust. Therefore, the said findings of the AO are in respect of misappropriation and misutilisation of the funds of the trust As finding of the AO based on material evidence is set aside by the Tribunal without adverting to each one of the items independently by applying its mind to the undisputed facts and the material evidence available on the file of the Assessing Officer and the documents, which are impounded from the office of the trustee and without assigning valid and proper reasons. The documentary evidence would clearly go to show that the receipts which are in the name of the trust and donation collected amounts to profit-making motive and it cannot be the object or the purpose of running a charitable educational institution for which the statutory benefit under section 10(22) of the Act is claimed. Therefore, the substantial questions of law 13 and 14 would certainly arise in this appeal and we answer the same in favour of the Revenue.
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