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TMI Blog2018 (4) TMI 1831X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee is a determinate trust and the income of the assessee has to be assessed in the hands of the beneficiaries. According to the Ld. counsel, this Tribunal further found that Venture Capital Fund is a pass through vehicle in respect of the investment made to venture capital undertaking. Referring to clause (23FB) of Section 10 of the Income-tax Act, 1961 (in short 'the Act'), according to the Ld. counsel, this Tribunal found that the investor who received the income from venture capital undertaking as per provisions of Section 10(23FB) of the Act is exempted from taxation. According to the Ld. counsel, Section 115U of the Act is intended to grant tax concession to the recipient of income from venture capital undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 7.1. The Assessing Officer misconstrued the observation made by this Tribunal at paras 7.1 and 7.2 and issued a show cause notice to assess the interest income in the hands of the Fund. According to the Ld. counsel, Fund is a pass through vehicle as observed by this Tribunal, and tax has to be assessed only in the hands of the respective beneficiaries, therefore, the Assessing Officer is not correct in presuming that the interest income has to be assessed in the hands of the assessee-Fund. 4. Sh. R. Vijayaraghavan, the Ld.counsel for the assessee, further submitted that more than 600 beneficiaries are in the assessee-trust. Out of which, 50% of the beneficiaries are institutions, therefore, according to the Ld. counsel, the assessee may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-trust / Fund. 6. The Ld. Departmental Representative further submitted that this Tribunal directed the Assessing Officer to examine whether the interest income was assessed / rightly assessed in the hands of the beneficiaries. According to the Ld. D.R., it was also categorically found by this Tribunal that expenses relating to dividend income cannot be set off against interest income. Therefore, according to the Ld. D.R., the Assessing Officer has rightly found that the intention of this Tribunal was to grant relief only in respect of interest income which is offered to tax by the respective beneficiaries. In case of non-admission or incorrect admission of interest income, according to the Ld. D.R., it has to be assessed only in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2017 is in respect of the entire income received from various sources and distributed to investors has to be taxed as such in the hands of the beneficiaries, therefore, there is no need for any exclusion in respect of the income admitted by the beneficiaries or not admitted by the beneficiaries. 8. Since the details of the income and expenditure is not available in the Profit & Loss account or in the document filed before this Tribunal, this Tribunal remitted back the matter to the file of the Assessing Officer for a limited verification to collect information from beneficiaries and allow pass through status in the hands of the assessee. Therefore, the Assessing Officer misunderstood the direction of the Tribunal by picking up same words ..... X X X X Extracts X X X X X X X X Extracts X X X X
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