2013 (8) TMI 1166 - AT - Income Tax

Summary

Issues involved: The appeal concerns the eligibility of the assessee for claiming the benefit of Section 11 of the Income-tax Act, 1961.

Summary:
1. The Revenue contested the CIT(Appeals) decision allowing the assessee's claim for exemption under Section 11 of the Act, based on the assessee's investment in M/s SPK MAC Charitable Trust.
2. The Assessing Officer raised concerns regarding the nature of the investment made by the assessee, alleging a violation of the investment modes specified under Section 11(5) of the Act.
3. The assessee argued that the loan given to M/s SPK MAC Charitable Trust, a registered organization, was in line with the educational objectives shared by both entities and did not breach the investment modes outlined in the Act.
4. The CIT(Appeals) upheld the assessee's contention, ruling that the interest-free loan to the registered Trust did not contravene the provisions of Sections 11 and 12 of the Act.
5. The Revenue challenged the CIT(Appeals) decision, asserting that the transaction with M/s SPK MAC Charitable Trust fell under the purview of a "concern" and was subject to Section 13(1)(c) of the Act.
6. The assessee's counsel relied on legal precedents to support the argument that the loan extended to the charitable Trust was not a donation but a permissible transaction under the Act.
7. The Tribunal, after reviewing the submissions and relevant case law, concluded that the loan provided to M/s SPK MAC Charitable Trust aligned with the educational objectives of both entities and did not violate the provisions of the Act.
8. Consequently, the appeal by the Revenue was dismissed, affirming the CIT(Appeals) decision to grant the assessee exemption under Sections 11 and 12 of the Act.