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TMI Blog2021 (8) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 - ITAT MUMBAI] and associate trust of the assessee trust, Shekhar bajaj charitable trust also supports this view. Departments plea in grounds of appeal that Hon ble jurisdictional High Court in decision in Jasubhai Foundation(supra) has not been appealed before Hon ble Supreme Court due to low tax effect is not a reason for us to take a contrary view. - I.T.A. No. 7099/Mum/2019 - - - Dated:- 20-7-2021 - Shri Shamim Yahya (AM) And Shri Amarjit Singh (JM) For the Assessee : Shri Mahendra Gohel For the Department : Ms. Usha Gaikwad ORDER PER SHAMIM YAHYA (AM) :- This appeal by the Revenue is directed against the order of learned CIT(A)-6 dated 23.08.2019 and pertains to Assessment Year 2013-14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The Trust had / received certain shares of listed companies as donation towards its corpus. The Trust continued holding these shares and accrual thereto till date which amounted to violation of Section 11(5) read with Section 13(1)(d) of the Act. As a result, the Trust did not claim benefit of Section 11 12 of the Act. Accordingly, the Trust had filed the Return of Income for the above year declaring a total income at Rs. Nil claiming deduction for donations given to eligible institutions and trusts. During the course of assessment proceedings, the AO observed that the assessee had shown investment in quoted/unquoted shares as under:- Name of the Company TYPE F.V No. of Shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust is not changed when the conditions u/s. 13 of the Act are violated by the assesse. The violation u/s.13 of the Act had only changed the eligibility for exemption of income derived from the property held by the trust u/s.11 of the Act and not u/s.10(34) of the Act. Accordingly, the AO completed the Assessment under Section 143(3) of the Act determining the total income at ₹ 3,43,55,850/- being dividend income earned on the shares held by the Trust, levying tax on this Dividend Income at maximum marginal rate of tax. 4. Upon assessee s appeal Ld.CIT(A) decided the issue in favour of assessee by holding as under:- 8. I have considered the facts of the case, discussion of the AO in the assessment order, oral contention and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 or sections 11 to 13 has any overriding affect over section 10. Therefore, the benefit of section 10 cannot be denied by invoking the provisions of sections 11 to 13 of the Act. Once the conditions of section 10 are satisfied then no other condition can be fastened for denying the claim under section 10 of the act. In view of the above discussion and following the various decisions (supra) we hold that the dividend income on shares and mutual funds and long term capital gain on sale of shares an exempt u/s 10(34) 10(35) and 10(38) respectively and cannot be brought to tax by applying sections 11 and 13 of the Act. 8.1 Further in support of its contention, the appellant has also relied on the Judgement of Hon. Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income is applied to such property in India and that any such income is accumulated or set apart for application for such purposes in India to the extent of which the income so accumulated or set apart in computing 15% of the income of such property, is dealt with. Therefore, it is a particular assessee and who is in receipt of such income as is falling under clause (a) of sub-section (1) of section 11 who would be claiming the exemption or benefit. That is a income derived by a person from property. It is that which is dealt with and if the properly is held in trust for the specified purpose, the income derived there from is exempt and to the extent indicated in section 11(1)(a) of the Income Tax Act, 1961. There is nothing in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No other conditions have been prescribed. Such exemption is qua the dividend income and not qua the status of the assessee. The Hon'ble Bombay High Court has elaborately dealt with the exemption under Section 10 as well as the provisions of section 11 and has held that there is nothing in the language of section 11 that prevents assesse from claiming exemption under Section 10 of the Act or vice versa. 8.2 In view of the foregoing and respectfully following the aforesaid binding judgments of the Hon'ble Bombay high Court and the jurisdictional ITAT, Mumbai, the action of the AO in denying the exemption under Section 10(34) of the Act in respect of the dividend income earned by the appellant is not found to be sustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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