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2018 (6) TMI 1228 - AT - Income TaxExemption u/s 11 - assessee trust has been carrying out substantial percentage of activities with non members - Taxing the bank interest as income from other sources - Section 2(15) application - Held that:- As decided in assessee's own case [2016 (5) TMI 1179 - ITAT MUMBAI] activity of the assessee depositing money in the bank does not constitute trade, commerce or business. The Assessing Officer has in fact gone much beyond and held that the interest itself constitutes taxable income falling foul of the proviso to section 2(15). These Sections require an entity seeking the shelter of Sections 11 to 13 to deposit its surplus funds in specified assets and it cannot be that the mandate requirement and object of Section 11 (5) which serves to put in place a mechanism to regulate the funds of the charitable institutions are overcome, overridden and nullified by an interpretation so that the very mandate of Section 11 (5) if complied with results in the institutions being declared to be non-charitable. This is a contradiction in terms and therefore must be rejected. The interest earned on fixed deposit with banks complying with the provisions of Section 11 (5) is exempt and the proviso to Section 2( 15) has no application to the facts of the assessee's case. - Decided in favour of assessee.
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