9911796707
TMI Blog2018 (1) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... C)(vi), therefore, there cannot be claim of deduction at both ends, that is, an application by the assessee and as income by the recipient. Neither the stand taken by Assessing Officer nor the stand taken by CIT(A) is justifiable as per the provisions of law. We are of the view that donation given by assessee trust to a university approved under section 10(23C)(vi) is for charitable purpose subject to verification of the basic information which were not available on record, as per Ld. DR, such as:(i) Property from which the rental income of the trust has derived, that is rental agreement and assessee’s Trust entitlement to receive rental income. and (ii) Agreement between Singhania Foundation Education ‘Trust’ and Singhania Foundation Educa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional purposes out of current year's income and there was no application for accumulation. 2.That ld. CI(TA) could not appreciate the precedents for earlier years under similar faascstes sasnmde cnitr cinu ma satlatongceetsh earn dd ifhfearse dnet amlta tnhnee irs. s ue which was not the subject matter of 3.That appellant reserves the right to raise additional grounds at the time of hearing." 3. The brief facts qua the issue are that return of income for A.Y 2010-11 was filed by the Trust on 28.09.2010 declaring total income of Rs.NIL. The Assessee's return of income was processed u/s 143(1) on 20.03.2012. Later, the assessee's case was selected for scrutiny u/s 143(2) of the Act. The Assessing Officer denied the exemption u/s 11 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the fund so transferred of ₹ 22,83,087/- from the 'Trust' to the 'Samity' was for the mutual benefit, as both the assessee 'Trust' & 'Samity' were claiming exemption u/s 11 on income of ₹ 22,83,087/-. Therefore, the AO observed that the assessee is not entitled to the benefit of tax exemption u/s 11. The AO after going through the records furnished by assessee concluded that the transactions between assessee 'Trust' and the 'Samity', which have been claimed by the assessee as application of its current year's income are held not bona fide. Also, there was clear falsification in the written submission as submitted by assessee. There was clear violation of the provision u/s 13(1)(c). There was also no legal distinction betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied/spent for educational purposes out of current year's income. The ld. Counsel also pointed out that ld. CIT(A) has dealt with the issue which was not the subject matter of the assessment order. Therefore, the ld. CIT(A) passed the order altogether on different footing and on different logic by applying the explanation of section 11(2), which is not acceptable. Whereas, the ld. AO denied the exemption, based on the stand taken by him, that the transactions between assessee 'Trust' and the 'Samity' were not bona fide and there was violation of the provision of 13(1)(c) of the Act. The AO also observed that there was no legal distinction between Singhania Foundation Education 'Trust' and Singhania Foundation Education 'Samity', there were c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee trust is getting rental income. Whether assessee is the owner of rental income, and the property from whom the rental income was derived, had not been proved by the assessee, therefore these basic information was not available on the record of AO, hence order passed by AO should sustain. 7. We have head the rival submissions and perused the materials available on record, we note that Assessing Officer denied the exemption under section 11 of the Act, based on the reason that income of ₹ 22,83,087/- of Singhania Foundation Education Trust (in brief 'Trust') was transferred to Singhania Foundation Education Samity (in brief 'Samity') for mutual benefit and both have a common key person namely Shri D.C. Singhania who have substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal income of the trust has derived, that is rental agreement and assessee's Trust entitlement to receive rental income. (ii) Agreement between Singhania Foundation Education 'Trust' and Singhania Foundation Education 'Samity' about use of services of service providers namely, International Legal Consultants Ltd. and Law Firm Management Services Ltd( LFMS). Based on the factual position explained above, we are of the view that neither the stand taken by Assessing Officer nor the stand taken by CIT(A) is justifiable as per the provisions of law. We are of the view that donation given by assessee trust to a university approved under section 10(23C)(vi) is for charitable purpose subject to verification of the basic information which were n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
