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2022 (12) TMI 401 - HC - Income TaxExemption u/s 10(22) denied - objects of the Trust include commercial activity - appellant's Trust was registered with the primary object to impart education - AO did not allow exemption on the ground that that the assessee-Trust was not solely for the educational purposes, but the trust was making profits - as per AO Trust Deed provided for payment of Honorarium to the Trustees prohibited u/s 13(2), Trust collects abnormally high fees, for acquiring luxury vehicles, using the Trust funds for activities other than education and unexplained cash credit - HELD THAT:- AO has not accepted the explanation on the ground that only upon the Department raising a query, the assessee had shifted the figures of Building and Development Fund to Income and Expenditure Account, as an after thought. The assessee was called upon to produce the details of the persons, who had contributed for Building and Development Fund. Assessee replied stating that the records were misplaced and an FIR dated 08.03.2001 was lodged. The Assessing Officer has also noticed that though the assessee had claimed that an FIR was lodged on 08.03.2001, revised Balance Sheet, Income and Expenditure Account were drawn subsequently and filed along with an Audit Certificate, which was not possible without the Books of Accounts. In such circumstances, the Assessing Officer has treated the sum as unexplained Cash credit under Section 68 of the IT Act. Thus, the Stand taken by the assessee that contributions were received only from the students has been rightly rejected by the Assessing Officer. Further, the cash balance of Rs.1.30 Crores at the peak with petty cash being drawn on daily basis fortifies the view taken by the Assessing Officer that money was being utilized for some other purpose. No exception can be taken to the view taken by the Assessing Officer and the ITAT. Decided against the assessee.
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