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TMI Blog2020 (11) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is not the case of the change of accounting system. The facts are distinguishable, therefore, no interference in the finding of the Ld. CIT(A) is called for. Thus, Grounds raised by the assessee are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessing officer was of the view that income tax of ₹ 2,16,50,650/- paid on deemed income u/s 11(3) of the Act for A.Y.2013-14 would not be allowable. Therefore, he made addition of ₹ 2,16,50,650/- and assessed the income of ₹ 6,68,03,650/- against return filed at ₹ 4,51,53,000/-. 3. Aggrieved against this assessee preferred an appeal before Ld. CIT(A) who after considering the submissions dismissed the appeal and sustained the addition. 4. Now the assessee is in appeal before this Tribunal. The only effective ground is against sustaining the addition of ₹ 2,16,50,650/-. Ld. counsel for the assessee vehemently argued that the authorities below were not justified in making addition and sustaining the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are different concepts both in nature and also purpose. while section 11(1) provides conditions under which "income" from property held for charitable or religious purposes may be treated as exempt from income tax, section 11(3) provided for the consequences of committing default or violation of the conditions laid down since section 11(1) and 11(2). The purpose of section 11(1) and 11(2) is to grant exemption to certain incomes subject to fulfillment of specified conditions. On the other hand, Section 11(3) is punitive in nature in so far it deems certain income as chargeable to tax, which is otherwise exempt, in the event of violation of conditions of section 11(1) and 11(2). 9. As already mentioned, the provision of section 11(3) are st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncomes to be eligible for exemption when the conditions are violated, income tax is attracted. If the same income tax is allowed as deduction, this will amount to incentivizing violations and defaults even in cases where the income of the trust has been misutilized or misapplied or diverted for purposes other than charitable or religious purposes. Such a situation is not comprehensible in law. 10. The cases cited by the appellant are distinguishable on facts. The type of income to be included as such u/s 11(1) are clearly provided in law. The deemed income u/s 11(3) is not included as income u/s 11(1). An item which is treated as deemed income because of legal fiction provided u/s 11(3), cannot be treated as income u/s 11(1). Law is ve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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