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Issues involved:
The only issue in this case pertains to the grant of exemption under section 11 of the Income Tax Act, 1961. Summary: The appeal was filed by the assessee against the order of the CIT(A)-IV Hyderabad for the assessment year 2003-04, specifically concerning the grant of exemption under section 11 of the IT Act, 1961. The Departmental Representative argued that there was a violation of provisions under section 13(1)(c) read with section 13(3) of the Act as the society's funds were used to purchase a vehicle in the name of the society's president. On the other hand, the Authorised Representative contended that the vehicle actually belonged to the society, and any initial errors in registration were rectified promptly. The Tribunal considered the arguments and the case law presented by both sides, focusing on whether the society's funds were truly utilized for individual benefit. In analyzing the situation, the Tribunal referred to a judgment of the Andhra Pradesh High Court in a similar case involving misutilization of funds by a society. However, in the present case, it was found that the initial registration of the vehicle in the president's name was rectified to reflect the society's ownership. As the rectification related back to the original registration date, it was established that there was no violation of section 13(1)(c) of the Act. Therefore, the Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeal. In conclusion, the Tribunal ruled in favor of the assessee, confirming that there was no contravention of the relevant sections of the Income Tax Act, and therefore, the exemption under section 11 was justified.
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