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SHRI VENKATASWARA CHARITY TRUST Versus DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION-I) , KOLKATA & ORS.

2015 (8) TMI 276 - CALCUTTA HIGH COURT

Benefit of accumulation U/s. 11(2) denied - Held that:- Judgment in the case of the trustees of Singhania Charitable Trust [1991 (7) TMI 16 - CALCUTTA High Court] relied upon by revenue has no manner of application to the facts and circumstances of this case because in this case admittedly there are also 28 objects, out of which only one object was indicated in the option under sub-section (2) of section 11 for which the accumulation was sought to be made. Therefore, the requirement of law was s .....

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assed by the learned Income Tax (Appellate Tribunal) pertaining to the assessment year 1996-97. The questions of law were formulated at the time of admission of the appeal which are set out below: (i) Whether on the facts and circumstances of the case, the decision of the learned Tribunal was justified in the facts of the case in refusing the benefit of accumulation U/s. 11(2) of the Act when the petitioner had accumulated an amount of ₹ 2,91,581/- and claimed the benefit U/s. 11(2) of the .....

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he petitioner had been granted relief for the previous years as well as subsequent years by the assessing officer and also by the Tribunal, and therefore there being no change in the facts for which the benefit of accumulation was denied is perverse? The assessee in this case is a trust. The accumulation of 85% under sub-section (2) of section 11 of the Income Tax Act was refused by the assessing officer on the following ground: It is clear from the facts of the case that the assessee is not int .....

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rcised U/s. 11(2) as investment in immovable property for establishing, maintaining the object of education, relief, medical etc. in itself is not specific and concrete but carries with it sufficient vagueness in respect of the true purpose of accumulation. The specific , concrete and itemised are indicative of very clear identification of purpose for which option U/s. 11(2) has to be exercised to enjoy exemption U/s. 11. On the other hand, the option should be such as to meet the contingency wh .....

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trust is not acceptable. I am of the view that the option is not specific as such the benefit of sec.11(2) is not eligible to the assessee. The aforesaid order was affirmed by both the CIT(Appeal) and the learned Tribunal. The assessee is as such in appeal. Mr. Sinha, learned Advocate appearing for the revenue, has relied on a judgment in the case of Director of Income Tax -vs- Trustees of Singhania Charitable Trust, reported in (1993) 199 ITR 819 (Cal.). The view taken in that case was as follo .....

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roject within its object or objects needs heavy outlay to call for accumulation to amass sufficient money to implement it. Therefore, specification of purpose as required by section 11(2) admits of no amount of vagueness about such purpose. On facts, what had happened in that case was that there were 28 charitable objects of the trust. In the option under section 11(2), it was stated that the accumulation was made for all or any of the aforesaid 28 purposes. It is in that perspective that the Di .....

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