Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 335 - AT - Income TaxExemption u/s 11 - Violation of provisions of Section 13(1 )(c) and 13(1)(d) - loans and advances to interested persons - Managing Trustee and Founder of the Appellant Trust is also Proprietor of Sri Vekkaliamman Builders and Promoter to whom advances paid - HELD THAT:- CIT appeal has not controverted the finding of the AO that Sri. Madurai Karthikeyan, managing director and founder member of the appellant trust has not been benefited by way of receiving advance of ₹ 24,78,316 to Sri Vekkaliamman Builders and Promoters, proprietor concern and an amount received and lying as outstanding loans and advances with Meru Shipping Lines Private Ltd. and likewise, a sum of is lying with Southern Academy of Maritime Studies Private Ltd as a substantial stake holders being benefited persons referred to in section 13(3) of the act. Hon’ble Juridictional Madras High Court in the case of St. Xavier Educational Trust [2021 (6) TMI 143 - MADRAS HIGH COURT] exemption has delivered a verdict that the denial of exemption under section 11 should only be too the extent of income which is violative of section 13(1)(d) and total denial of exemption and accordingly revenue was to only forfeit exemption under section 11 in respect of opening payments. Madras High Court in the case of Ms. V.G.P. Foundation [2002 (10) TMI 26 - MADRAS HIGH COURT] held, under exactly similar circumstances that the trust would not be entitled to exemption us.11 of the IT Act, 1961, since the amount advanced was without interest and also without adequate security. Hence, the same set of transactions involved with interested persons are also violations u/s.13(1)(d) as well. We are of the considered view that the learned CIT appeal has been wrong interpretation of provisions of section 13(1)(d) and 13 (3) of the Act, qua the peculiar facts of the instant case. In our view, the appellant trust has violated the provisions of section 13(1)(c) and 13(1)(d) of the Act. Thus, the appellant is not entitled for exemption u/s 11 of the Act to that extent. According, the order of the learned CIT appeal is reversed and the assessment order is restored. Appeal of the revenue is allowed.
|