9911796707
TMI Blog2013 (12) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 13(1)(c) are violated. 3. Shri M Anil Kumar, the ld.DR submitted that the taxpayer is a registered charitable trust u/s 12AA of the Act. During the year under consideration, the taxpayer claimed that a sum of Rs.7,06,92,878 was utilised for charitable activity. On verification, the assessing officer found that the taxpayer has donated a sum of Rs.7 crores to the following trusts: Vivekananda Charitable Trust Rs. 2,25,00,000 Cochin Child Foundation Rs. 2,50,00,000 Bethel Educational & Charitable Trust Rs. 2,25,00,000 According to the ld.DR, out of Rs.2.25 crores donated to Vivekananda Charitable Trust, a sum of Rs.10 lakhs was paid to M/s Zee Interactive Learning Systems as franchise deposit for setting up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that there is no prohibition from taking the land from the trustee. According to the ld.representative, the deposit and rent is paid as per the market rate for running the charitable activity. Therefore, no benefit was given to any interested person within the meaning of section 13(1)(c) of the Act. Even for argument sake, according to the ld.representative, the benefit was shown by Vivekananda Charitable Trust to its own trustee then also, at the best, the exemption may be denied in the hands of Vivekanand Charitable Trust and definitely not in the hands of the present taxpayer. Therefore, according to the ld.representative, the CIT(A) has rightly allowed the claim of the taxpayer. 7. Referring to Cochin Child Foundation, the ld.repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e properties are situated in the outskirts of Piravom. Naturally, the land which is situated in the heart of Piravom town would fetch more price than the cost of the land which is situated in the outskirts of Piravom. Referring to the remand report filed by the assessing officer before the CIT(A), the ld.representative submitted that the assessing officer admitted that the land purchased from trustees are within the Piravom town and the land purchased from outsiders are located 5 kms away from Piravom town. Therefore, it is obvious that the taxpayer has to pay the market rate in respect of the land which is situated in the heart of Piravom town. Therefore, there is no benefit shown to the interested person as claimed by the assessing office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ananda Charitable Trust, the property was taken on lease for running a school. Vivekananda Charitable Trust has also paid franchise 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, we do not find any infirmity in the order of the lower authority. Accordingly, the same is confirmed. 13. Now coming to the cross objection of the taxpayer the only issue arises for consideration is fixing of fair market value as on 01-04-1981. 14. We heard Shri Thomson Thomas, the ld.representative for the taxpayer and Shri M Anil Kumar, the ld.DR. The CIT(A) fixed the value as on 01-04-1981 at Rs.5,000 per cent for working out the value of capital gain. The claim of the taxpayer is that it should be fixed at Rs.10,000 per cent. From the assessment order it appears that the assessing officer fixed the fair rent as on 01-01-1981 at Rs.3,500. The fair rent is not a static figure. It may vary depending upon various factors such as the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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