TMI Blog2016 (11) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... 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). - ITA no.5494/Mum./2015 - - - Dated:- 16-9-2016 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER For The Assessee : Shri V.G. Gind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he audit report in the specified manner but also filed Form no.10 along with the copy of resolution mentioning the purpose for which the accumulated fund was set apart. The assessee submitted, accumulated fund was set apart for carrying out the object of the trust which is for utilisation in the up coming projects. The Assessing Officer, after considering the submissions of the assessee, however, observed that the purpose of accumulation shown by the assessee is general in nature and it does not specified the specific object or purpose for which accumulated fund is to be utilised. He observed, assessee was not able to substantiate the purpose of accumulation with any concrete plan of action supported with documentary evidence. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building to be utilised as hostel for outstation students. The building being a very old one is in a dilapidated condition. Therefore, a project was undertaken for re development of the hostel building as well as other existing properties of the trust. Thus, the learned Authorised Representative submitted, the allegation of the Departmental Authorities that the purpose of accumulation of fund is general in nature is not correct. Learned Authorised Representative submitted, the purpose of accumulation set out in form no.10 if read along with the resolution of the trust as well as the objects of the trust would clearly indicate that the accumulation of fund was for the purpose of achieving the object of the trust. Learned Authorised Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with any concrete plan and documentary evidence assessee s claim was rightly disallowed. 7. We have considered the submissions of the parties and perused the material available on record. Undisputedly, the assessee is registered as charitable trust under section 12A. Therefore, the assessee is eligible to claim exemption under section 11 subject to fulfillment of conditions enshrined therein. This factual position has not been disputed by the Department. On a perusal of section 11 of the Act, it is noticed, income derived by a charitable trust or institution shall not be included in the total income of the previous year to the extent to which the income so accumulated or set apart is not in excess of 15% of the income from such property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operties of the trust or purchase or construction of new building for carrying out the activities of the trust. Along with declaration in form n o.10, the assessee has also enclosed a resolution of the managing committee of the trust dated 27th June 2011, which reads as under: RESOLVED that out of the income of the trust for the previous year 31/03/2011, relevant to the assessment year 2011-12 an amount of ₹ 95,00,000/- being 56 per cent of the income of the trust, as is available at the end of the previous year ended 31/0312011 be accumulated or set apart and transferred to Building and Amenities Reserve 2011 , till the previous year(s) ending 31/03/2016 in order to enable the trust, to accumulate sufficient funds for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has clearly mentioned that the accumulated fund has been set apart for utilisation in development of existing properties of the trust or purchase or construction of new building for carrying out the activities of the trust. The aforesaid purpose set out in Form no.10 is clearly in consonance with the object of the trust. That being the factual position, the allegation of the Department that the purpose of accumulation of fund is general in nature is without any basis, hence, cannot be accepted. In case of DIT(E) v/s Envisions (supra), the Hon'ble Karnataka High Court after considering disallowance of exemption on similar nature of allegation by the Department held that since the purpose for which the fund was accumulated or set apar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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