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2016 (11) TMI 656 - ITAT MUMBAIDisallowance of exemption claimed u/s 11(2) - Held that:- As already noted, in Form no.10, as well as resolution of the trust, the assessee has specifically mentioned the purpose of utilization of fund in construction / re–development of buildings / properties of the trust. Thus, the purpose of utilization is in consonance with the objects of the trust. That being the case, assessee’s claim cannot be disallowed. We also find merit in the submission of the assessee that disallowances envisaged on account of non–utilisation of accumulated fund cannot be made in the first year of claim. A reading of provisions contained in section 11(3) along with section 11(2) of the Act, makes it clear that only after the expiry of five years period if the Assessing Officer finds that the accumulated or set apart funds were not utilised for achieving the objects of the trust then only he can disallow assessee’s claim of exemption under section 11(2). For the aforesaid reasons, we do not agree with the conclusion of the Departmental Authorities. Accordingly, we set aside the impugned order of the learned Commissioner (Appeals) and allow assessee’s claim of exemption under section 11(2).
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