9911796707
TMI Blog2024 (8) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The assessee raised 10 grounds of appeal amongst which, the only issue emanates for our consideration is whether the ld. CIT(A) is justified in confirming the order of the Assessing Officer in denying exemption under section 11 of the Income Tax Act, 1961 ["Act" in short] in respect of value of car purchased in the name of trustee in the facts and circumstances of the case. 3. The assessee is a trust conducts its activities under the name and style of M/s. Sri Karpaga Vinayagar Educational & Charitable Trust. The objects of the assessee are in carrying out charitable activities, i.e., education, relief to poor, etc. The assessee filed its return of income admitting NIL income and under scrutiny notices under section 143(2) and 142(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased in the name of the managing trustee with the sole objective of saving considerable amount of road tax and insurance. The appellant was clearly asked, vide notice dated 01/11/2023, to give details of the savings made following this methodology - no response has been filed by the appellant and it is evident that it has nothing to state in the matter. Therefore, the ground is dismissed. 3.2 Grounds No. 3, 4, 5 and 6: The appellant states that the Assessing Officer (AO) has failed to note that the car loans and all other related expenses or accounted for in the books of the assessee and therefore it is the real and effective owner of the asset. It is seen that the appellant has relied on certain case laws which have no relevance to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trust fund and hence, not squarely applicable to the facts of this case. 3.2.4 Further, it is clear from the above transaction that the income or property of trust was diverted in favour of the managing trustee of the trust Smt. S Jayalakshmi, who is person referred u/s 13(3) of the I.T. Act, and the above transaction is a clear violation as per clause (g) of sub-section (2) of section 13 r.w.s. 13(1)(c) of the I.T. Act." 3.2.5 The situation remains the same, the usefulness of this asset in connection with the activities of the trust or how it has dominion over this asset, as claimed, remain a mystery. The AO is directed to further disallow all the related expenses- loan repayments, driver salary, fuel and maintenance and enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It may be mentioned that the road/life tax and insurance charges payable for a new car registered as a commercial vehicle is much more compared to a ownership car. b) The new car purchased is accounted for in the books of our trust and is shown as an asset in the Balance sheet as at 31.03.2016. For the purchase of the new car, we had taken a loan from ICIC Bank Ltd., Palani Branch for which Ms. S. Jayalakshmi and our Trust are applicant and co-applicant respectively. c) The car loan from Bank is duly accounted for in the books of our Trust and appears as a liability in the Balance Sheet as at 31.03.2016. d) The Loan repayments to the Bank are duly accounted for in the books of our Trust. e) All expenses in relation to the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sections 11 and 12 of the Act to the extent of value of that car. 9. Further, on perusal of the impugned order, we note that the ld. CIT(A) asked the assessee to furnish the details therein, but, however, no details filed before the first appellate authority and even before us. When we asked for the log book for verification to find out as to whether the said vehicle was used for purpose of assessee's activities, the ld. AR could not produce anything in support of his argument to show that the said vehicle was utilized for the purpose of charitable activities. The submission of the ld. AR that the log book of the vehicle was filed before the Assessing Officer/ld. CIT(A) is not acceptable, because, a mere statement cannot be taken into cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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