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2019 (5) TMI 1064

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..... sonance with the objects of the trust. Subsequently, in Director of Income-Tax v. ACME Educational Society [ 2010 (7) TMI 159 - DELHI HIGH COURT] this Court again upheld the advancing of a loan by one charitable trust to the other. The Court referred to an earlier decision of Director of Income-Tax v. Pariwar Sewa Sansthan [ 2001 (5) TMI 13 - DELHI HIGH COURT] in this regard. In view of the decision in Director of Income Tax (Exemption) v. Bagri Foundation [ 2010 (7) TMI 85 - DELHI HIGH COURT] which has considered the above explanation to Section 11(2) of the Act the Court, the Court finds that no substantial question of law arises in this appeal. - ITA 454/2018 - - - Dated:- 13-5-2019 - S.MURALIDHAR AND I.S.ME .....

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..... nother charitable trust. 5. The Assessee filed an appeal before the Commissioner of Income Tax [ CIT (A) ] who held that RKSCT was itself registered under Section 12A of the Act and that the advancing of a loan by one charitable trust to another should be treated as application of income towards the objects of the trust. 6. Aggrieved by the above decision, the Revenue filed an appeal before the ITAT. The ITAT accepted the plea of the Assessee that the AO had mixed up two independent separate transactions. One concerned the payment made by the Assessee to the WBHIDCO Calcutta in the sum of ₹ 2.72 crores for acquisition of land in the name of IILM Academy of Higher Learning being run by another trust i.e. RKSCT. It was .....

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..... Ram Memorial Foundation (2004) 269 ITR 35(Del) the donation of income to another charitable trust was held to be in consonance with the objects of the trust. This was subsequently relied upon by this Court in Director of Income Tax (Exemption) v. Bagri Foundation (2010) 233 CTR 538. After considering the above explanation under Section 11(2) the Court noted as under: 9. What follows is that the amount accumulated cannot be donated to another trust. However, the said explanation does not place a total embargo on donations by one trust to another. It does not prohibit the trust from donating its entire income in a relevant year to another trust, as is the law as noticed in the Division Bench judgment in Shri Ram Mem .....

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..... ermitted out of 15% accumulation permitted under Section 11(1)(a) itself. There is however rationale for imposing the restriction as contained in the explanation (supra) to accumulations in excess of 15%. Such accumulations, but for the conditions imposed in Section 11(2) and in the explanation aforesaid, would have been eligible to be taxed. One of the conditions in Section 11(2)(a) is that the purpose for which accumulation in excess of 15% is being made is to be notified; another condition is of the accumulation being permitted for a period not exceeding 10 years; yet another condition is as to the modes in which the accumulation can be invested. There are no such restrictions on accumulation under Section 11(1)(a). The scheme of the s .....

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