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TMI Blog2017 (6) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 of the Commissioner of Income-tax (Appeals)-2, Chennai, in I. T. A. No. 174/CIT(A)-2/2013-14 for the assessment year 2009-10. 2. All the grounds of appeal are related to exemption of income under sections 61 and 161 of the Income-tax Act in the hands of the assessee. The issues raised in these appeals for the assessment years 2008-09 and 2009- 10 and the grounds of appeal for both the assessment years are common. Hence both the appeals are heard together and disposed of in common order for the sake of convenience. 3. The assessee is a trust set up by the Government of Tamilnadu and constituted a trust deed dated November 29, 2006 and filed its return of income under the status of an association of persons (trust) admitting nil incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh local bodies. The initial contribution of the Government of Tamil Nadu is only Rs. 5,000, it has invited ICICI, IL&FS, HDFC as contributors to the trust with the condition that after three years if they desire, they can take back their contributions and so that they can contribute their share as well as their expertise also in development of infrastructure in the State through extending financial assistance. The objective was totally in public interest and for the development of the State. Though, they could have been a surplus in the transactions, the motive was to enhance the welfare of the public and not the profit. The assessee was constituted for the purpose of financial infrastructure projects which include water supply, solid wast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee would amount to double taxation of the same. The learned authorised representative for the assessee also relied on the following decisions : 1. Deputy CIT v. India Advantage Fund-VII [2014] 36 ITR (Trib) 304 (Bang). 2. ITO v. India Advantage Fund-I [2015] 43 CCH 459 (BangTrib.) 3. Jyotendrasinhji v. S. I. Tripathi [1993] 201 ITR 611 (SC). 4. CIT v. T. A. V. Trust [2003] 264 ITR 52 (Ker). 6. The learned authorised representative taken us to the trust deed page Nos. 5, 23, 22, 43 and 78 for referring the meaning of projects, investments, revocable trust, distribution of profits and supplementary deed for grants of Government of Tamil Nadu and explained that the trust is not carrying on any business activity, the shares of the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f- (i) it contains any provision for the re-transfer directly or indirectly of the whole or any part of the income or assets to the transferor, or (ii) it, in any way, gives the transferor a right to reassume power directly or indirectly over the whole or any part of the income or assets ; (b) 'transfer' includes any settlement, trust, covenant, agreement or arrangement." 8. The learned authorised representative for the assessee referring to the paper book page No. 23 clause No. 6.03 to 6.06 of the contribution agreement between the Tamilnadu Urban Infrastructure Ltd. and the Tamilnadu Urban Infrastructure Financial Services Ltd. (Fund Manager) dated November 18, 1996 argued that the contributors are free to cancel the units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to above, it is evident that after three years the contributors are free to call upon the trustees to cancel any unit held by them and return whatever remains uncancelled will be cancelled at the trust period and the money is returned to the contributors. 9. The learned authorised representative also taken our attention to the page No. 43 of the paper book wherein the objects of the trust are defined as under : "(i). To give financial assistance to urban local bodies, statutory boards, public sector undertakings and private investors, for setting up infrastructure projects in the State of Tamil Nadu. The trust may also provide subordinate loan or take equity position in the infra structure projects sponsored by private investors on a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (vi) To do all other things necessary and conducive to the attainment of all these objects." The objects of the trust clearly indicate the public utility and improvement of infrastructure facilities for the betterment of the urban area and not carried on for the purpose of business. 10. The assessee also invited our attention to page No. 6 of the paper book for the definition of investments which is reproduced hereunder : "'Investments' means monies lent/to be lent by the trust only for infrastructure projects and includes monies placed by the trust in instruments such as Government promissory notes or other Government security an defined in section 2 of the Public Debt Act, 1944, stock or shares in any banking company or ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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