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TMI Blog2013 (12) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... vom town and the land purchased from outsiders are 5 kms away from Piravom town - It is common knowledge that the land which is situated in town would cost more than the land which is situated 5 kms away from the town - The payment of sale consideration is as per the prevailing market rate and, no benefit was shown to any of the interested person – Decided against Revenue. Valuation of property – Held that:- The fair rent is not a static figure. It may vary depending upon various factors such as the locality of the land, urgency to sell the land, necessity of the purchaser to purchase the land, access to the road, railway station, airport, distance between the land and the public infrastructure facilities available around the area, etc. need to be considered - The land was situated around bypass area. The CIT(A), after taking into consideration that the Cochin bypass road was fully developed during 1976, fixed the fair market value as on 01-04-1981 at Rs.5,000 – Decided against assessee. - ITA No.302/Coch/2012 - - - Dated:- 22-3-2013 - N R S Ganesan and B R Baskaran, JJ. For the Appellant : Shri M Anil Kumar, CIT For the Respondent : Shri Thomson Thomas ORDER:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cochin Child Foundation trust purchased a commercial space in M/s Aerens Gold Souk International, Vyttila. According to the ld.representative, Cochin Child Foundation invested the funds received from the taxpayer trust in a commercial venture. Therefore, this is for direct benefit of the interested persons specified in section 13(3) of the Act. Therefore, the taxpayer is not eligible for exemption u/s 11 of the Act. 5. On the contrary, Shri Thomson Thomas, the ld.representative for the taxpayer submitted that no doubt, a sum of Rs.7 crores was donated to three trusts having similar objects. According to the ld.representative, all the trusts utilised the funds for charitable purpose. The ld.representative submitted that when the accumulated funds were donated to similarly placed trusts, it will amount to application of fund for charitable activity, therefore, exemption u/s 11 cannot be denied to the taxpayer trust. The ld.representative further submitted that even if there was any violation in respect of utilisation of funds by the respective trusts, who received the funds from the taxpayer, then also, at the best, the exemption could be denied only in their hands for violation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain in the fixed deposit in banks for more than six months for claiming exemption. According to the ld.representative, the investment in the commercial space was made for getting better return which could be utilised for charitable activity. Therefore, purchase of a commercial space cannot be construed to be a commercial activity. 8. Referring to donation made to Bethel Educational Charitable Trust, the ld.representative submitted that Bethel Educational Charitable Trust purchased land from its own trustees and third parties. The price paid for the property purchased from the trustees is Rs.82,900 per cent whereas in respect of other persons it was Rs.21,400 to some properties and Rs.15,000 to some other property. Bethel Educational Charitable Trust has also paid Rs.72,000 per cent in respect of other property. According to the ld.representative, price of the property would vary depending upon the locality where it is situated. The ld.representative submitted that Bethel Educational Charitable Trust is running a school in the heart of Piravom Town. The land purchased from the trustees is adjacent to the school building which is required for development of the sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranchise deposit for setting up of a school. It is not the case of the revenue that what was given to trustee Susie Boby is higher than the market rent. When the taxpayer was paying deposit and rent for taking premises for carrying out its object as per the trust deed, then it cannot be said that any benefit was shown to the interested person within the meaning of section 13(1)(c) of the Act. If the revenue establishes that the deposit and rent paid to Susie Boby for taking the premises on lease is higher than the market rent, then the matter would stand entirely on different footing. In this case, it is not the case of the revenue that what was paid by the Vivekanand Charitable Trust is higher than the market price. Therefore, we do not find any infirmity in the order of the lower authority. 10. Similarly, donation made to Cochin Child Foundation was initially deposited in the commercial space. It is well settled principles of law that when the charitable trust utilises the funds for construction of kalyana mandapam and used the income from kalyana mandapam for charitable activity it would amount to utilisation of funds. Similarly, it is found that Cochin Child Foundation has co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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