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TMI Blog2010 (10) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Societies Registration Act, 1860, but is also registered under Section 12A of the Act. The respondent-assessee had filed a return of Nil income for the Assessment Year 2006-2007. The said return was processed under Section 143(1) of the Act. However, the matter was selected for scrutiny. 3. During scrutiny, the Assessing Officer (in short, "AO") observed that as per the computation sheet, an amount of ' 20,00,000/- had been shown as income applied during the assessment year under the head "Purchase of Land", but in the schedule for fixed assets, there was no addition to land. According to the AO, as the advance was given on 10th January, 2006 without execution of any agreement, the respondent-assessee could not satisfy the mandatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the aforesaid advance was received by him against the landed property measuring 700 sq. yds owned by him. He further stated in the deed of irrevocable General Power of Attorney that he had given all the original documents related to the property to the assessee trust and the assessee trust was duly verified the same and was well satisfied with the physical and legal status of the property. He, therefore, executed irrevocable General Power of Attorney giving all the power to the assessee trust to exercise all powers or rights in respect of that property. In the Power of Attorney, it has been categorically stated that the assessee has taken the possession of the land and occupied the same on the spot. From this averment mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty and also got irrevocable General power of Attorney executed in his favour by seller of the property. By making the payment in advance and taking the possession of the property, the assessee has acquired right to secure conveyance of the property in its favour, and as such the amount paid by the assessee to Shri Manjeet Singh cannot be regarded as the money remained with the assessee, and not the application of income for acquiring capital asset. The money was given to Shri Manjeet Singh and on receiving the money from the assessee, Shri Manjeet Singh had credited a legal obligation or duty upon him to convey the property in favour of the assessee and in furtherance to that agreement, Shri Manjeet Singh has also handed over the peacefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the Madras High Court in V.G.P. Foundation (supra) is not applicable to the present case, as in the said case, the Madras High Court had found that the money instead of lying with the assessee had been deposited with the sister concern of the company and the money had not been applied for a charitable purpose. Since the facts of the present case are entirely different from the decision of the Madras High Court, we are of the opinion that the judgment has no application to the present case. 8. In fact, in our view, the facts of the present case are quite similar to the case of S. RM. M. CT. M. Tiruppani Trust Vs. Commissioner of Income Tax (1998) 230 ITR 637. In the said case, the Supreme Court held as under:- "For the year ending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, irrespective of whether it has filed a declaration under Section 11(2) or not, is entitled to deduction of certain income from its total income of the previous year. The income so exempt is the income which is applied by the charitable or religious trust to its charitable or religious purposes in India. If the entire income is so applied, the entire income would be exempted. If the entire income is not applied but some income is accumulated by such a trust, then also under Section 11(1)(a), such accumulated income to the extent of 25 per cent of the total income (or Rs.10,000, whichever is higher) would be exempted from income-tax . xxx xxx xxx The assessee, however, is entitled to claim the benefit of Section 11(1)(a). In the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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