TMI Blog2010 (12) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... g the exemption u/s 11 when there was clear violation of section 13(1)(c) of the I. T. Act. 2. On the facts and in the circumstances of the case Ld. CIT(A) erred in allowing the expenses under salary, donation etc. without appreciating the facts that assessee failed to produce the evidence for the expenses. Assessment Year 2002-03 1. On the facts and circumstances of the case and also in the question of law, Ld. CIT(A) was not justified in allowing the exemption u/s 11 to the assessee without appreciating the fact that inter trust donation among the same group of trusts is a violation u/s 13(1)(c) of the I.T.Act as observed by the Hon ble Bombay High Court in the case of Champa Charitable Trust V. CIT, 214 ITR 764 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onation etc. for the assessment year 2002-03. Similarly, the AO disallowed expenditure claimed in respect of Kolkata office ₹ 1,34,538.40, paid to Sri Sri Balananda Tirthshram, Puri ₹ 5,74,545/-, Shri Sri Balananda Tirthshram Badrinath ₹ 3,02,366.05, Sri Sri Balanda Tirthshram Baranasi ₹ 2,86,670.95, Sri Sri Balananda Tirthashram Brindaban ₹ 84,183.00, Sri Sri Baleswari Bhavan, Deogarh- ₹ 1,92,499.95 and Sri Sri Balananda Tirthashram, Jamshedpur ₹ 23,193/-. 4. On appeal, after taking into consideration of the submissions of the Ld. A.R. and the facts of the case, the Ld. CIT(A), in respect of appeal in ITA No.205/Kol/10 for the assessment year 2002-03, has deleted the same by observi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objects of the Trust. Therefore, in my opinion, no disallowance was warranted. These two grounds are therefore, allowed to the assessee. 4.2 The Ld. CIT(A) again deleted next addition by observing that 1 have gone through the facts of the case. As per Provisions of Sec.13, Sec. 11 will not apply in case any part of any property of the Trust is directly or indirectly used or applied for the benefit of any person being a Trustee or Manager. However, in case of the assessee trust the Trustee/Manager are resident in their capacity as caretaker of the property, for the maintenance and day to day operation. The A.O. has not shown that any expenses have been specifically made out for the trustee. In my opinion a Trustee taking residence wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any reason for not admitting these expenses. I however presume that the disallowance was made because the A.O. had held the trust as not eligible for purpose of section 11 and therefore expenses of the nature mentioned were considered inadmissible. Since I have held that the trust is eligible for purpose of section 11, the admissibility of expenses has to be evaluated in this light. The expenses for poor, donations for charitable purposes, etc. are all within the object of the trusts and therefore it is held that these expenses are application of funds for charitable purpose. The A.O. is directed to allow these expenses. 8.1 I have gone though the income and expenditure account for the said unit of the Trust and it is seen that me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s extent. This ground is partly allowed. 10.2 In my opinion this ground of the assessee needs to be allowed. The main purpose of the accumulation has been specifically mentioned as Tirthashrams. The purposes are within the objects of the trust and are charitable in nature. It is therefore held that the assessee is eligible for accumulation under section 11(2). 11. Ground No.7 is with regard to the A.O. not allowing claim u/s 11(1) of ₹ 8,89,2431- and accumulation u/s 11(2) of ₹ 7,55,6741-. It has been hejd by me in ground No.6 that the assessee s claim u/s 11(2) has to be allowed. Since I have also held earlier in the order that the assessee is eligible for purposes of section 11, claim u/s 11(1) for creation of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e these issues, which are as under: It is found that the assessee trust paid donation of Rs. ₹ 13,00,2111- to Sri Sri Mohanananda Brahmachari Medical Welfare Trust. In both the trusts there are common trustees. In the assessment it was held that this donation is not genuine and nothing but a colourable device to avail exemption. Ld.CIT(A), in his order has held that there is no bar on having common trustees or on making donations by one trust to the other. The only restriction is that the donation made should be for the object of the trusts and its application by the donee should be for charitable purposes within its objects. Hence it was held that the transactions were genuine and within the object of the Trust. In the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
