9911796707
TMI Blog2025 (5) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to upload certain information / clarification. From the various details furnished by the assessee, the Ld. CIT(E) noted that the assessee has received an advance of Rs. 50 lakhs from Smt. Sushma Naik and also reclassified an advance of Rs. 57 lakhs from Yovak Kalyan Patsanstha as unsecured loan. So far as the amount of advance of Rs. 50 lakhs is concerned, the assessee filed a confirmation letter from Smt. Sushma Naik confirming of giving an advance of Rs. 50 lakhs to the trust. However, no other clarification was offered by the trust with regard to the purpose and subsequent utilization of the money. The Ld. CIT(E) noted that Smt. Naik has stated that the advances were given with an intention to name the pharmacy college of the trust in the name of her late husband and that this amount will be refunded by the trust as and when funds are available with the trust. However, the said advance was still pending. 3. So far as the issue of advance of Rs. 57 lakhs received from Yovak Kalyan Patsanstha is concerned, it was contended by the trust that it was taken as temporary advance to be repaid within a year and as the trust could not repay the same, it was re-classified as loan. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm of loan, whether short-term or long-term, should be accurately reflected in the financial statements as a loan from the outset. The trust's inconsistent reporting raises questions about its financial transparency. It is also noticed that many payments made out of these borrowed funds were directed to related entities associated with Late Vijay Naik and Smt. Sushma Naik. However, the trust has failed to provide documentary evidence to substantiate the nature and purpose of these transactions, which further raises concerns about financial dealings within the trust The trust's assertion that it intended to repay the amount within a year does not absolve it from the statutory requirement of seeking permission under Section 36A(3) of the Maharashtra Public Trust Act, 1950, for borrowing money on behalf of the trust. The trust's failure to comply with this provision further raises questions about its adherence to legal requirements of other laws applicable in its case Furthermore, the fact that the trust made a time deposit of Rs. 10.50 Lakhs without utilizing this amount for the intended object raises additional concerns about the veracity of the trust's claims. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the paper book, he submitted that the trust has taken loan of Rs. 50 lakhs from Smt. Sushma Naik and the assessee has filed a copy of confirmation letter from her with supporting documents. Similarly, an advance of Rs. 57 lakhs taken from Yovak Kalyan Patsanstha was utilized for construction of college building. He submitted that all these transactions were done through proper banking channel and were duly reflected in the books of account. Further, the assessee has also applied before the Charity Commissioner regarding permission to avail the loans and advances from Smt. Sushma Naik and Yovak Kalyan Patsanstha. He submitted that if there is some lacuna, that can be rectified subsequently also. He submitted that since the Ld. CIT(E) has not verified all these details, therefore, he has no objection if the matter is restored to the file of the Ld. CIT(E) for deciding the issue afresh in light of the decision of Hon'ble Bombay High Court in the case of Director of Income Tax (Exemption) vs. G.K.R. Charities (supra) and other various documents already on record. 7. The Ld. DR on the other hand submitted that the assessee has not only violated the provisions of section 12AB(4)(f) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ombay Public Trust Act without considering the decision of the Bombay High Court in CIT v. Pruthivi Trust reported in 124 ITR 488? 10. We find the Hon'ble High Court decided the issue in favour of the assessee and rejected the grounds raised by the Revenue by observing as under: "2. So far as question (a) is concerned, the relevant facts are that the respondent-assessee is engaged in the charitable activities and has been granted registration u/s 12A of the income tax Act, 1961 (the Act). The revenue seeks to deny the benefit of exemption u/s 11 of the Act inter alia by disallowing the repayment of the interest free unsecured loan taken from the managing trustees in earlier years without obtaining prior approval from the Charity Commissioner under the Bombay Public Trust Act, 1950 (the Trust Act). On appeal, the CIT(A) following the ITAT''s decision in the case of ITO (Exemption) v. Bombay Stock Exchange [IT Appeal No. 5551 (Mum.) of 2009, dated 22nd August, 2006] allowed the claim of the assessee for exemption u/s 11 of the Act. On further appeal filed by the revenue, the ITAT while upholding the order of CIT(A) held that once the registration has been granted u/s 12AA ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
