TaxTMI 
TaxTMI 
2011 (4) TMI 126
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....red by the assessee has been rejected, and the Tribunal has upheld the orders passed by the learned Commissioner as well as the learned Assessing Officer. The three authorities have concurrently rejected part of the returns submitted by the appellant, rupees five lacs transferred by it to Smt. Shanti Rai is not for charitable purpose, is really diversion of funds, and is taxable. It is with respect to the assessment year 2001-02. 2. The following substantial questions of law have been framed for our consideration: (i) Whether on the facts and in the circumstances of the case, the Tribunal is justified in upholding invocation of sections 13(3) and 11(2)(b) of the Income-tax Act in respect of advance of Rs. 5,00,000 given t....
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....its returns for the period in question and had disclosed that it had lent a sum of Rs. 5,00,000 (rupees five lakhs), out of its receipts to Smt. Shanti Rai for expansion of the school building. The learned Assessing Officer did not accept this part of the returns, and held that the money so given to Smt. Shanti Rai was given to an 'interested person' within the meaning of section 13(3) of the Act, the advance was without any security or payment of interest within the meaning of section 13(2)(a) of the Act, and was in violation of section 11(5) of the Act which prescribes the manner in which such accumulation has to be invested in the schemes indicated thereunder. The learned Assessing Officer also observed that the particulars in the prescr....
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.... security. He further submits that in case of non-refund of the amount in question, the assessee may refuse to vacate the premises, or may adjust the same against the rent due to Smt. Shanti Rai, or may refuse to enhance the rent in future. He also submits that it is because of such advance during the period in question, and similar advances in the earlier periods, that the assessee has been paying less than the market rate of rent to Smt. Shanti Rai. In his submission, the advance sum of rupees five lakhs was thus fully secured by 'adequate security' and/or 'adequate interest'. He also submits that the Tribunal has erred in applying the provisions of sections 13(2)(a) and 11(5) of the Act. 5. The learned Assistant Standing Counsel has s....
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....section 12A of the Act. In view of the provisions of the Act, its income is exempt from Income-tax if its affairs are carried out in due observance and compliance of the relevant provisions of the Act. We are at present concerned with the kind and nature of the transaction involved in the amount of rupees five lacs given by the assessee to Smt. Shanti Rai by way of loan, allegedly for improvement and expansion of her building which accommodates the school being run by the assessee. The learned Assessing Officer in his fairly elaborate order has stated that the assessee had failed to supply the vital informations called for by him from time to time. He has further found that the total corpus of the assessee was not by way of voluntary contri....
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....has been considered. It has been considered therein as to under what circumstances this Court can interfere with findings of facts. This Court also dealt with the meaning and content of the expression 'substantial question of law', occurring in section 260A of the Act, and section 100 of the Code of Civil Procedure. Paragraph 9.1 of the judgment is reproduced hereinbelow : "9.1 In Sir Chunilal v. Mehta & Sons Ltd. v. Century Spg. & Mft. Co. Ltd. (1962 Supp. (3) SCR 549 : AIR 1962 SC 1314), the Supreme Court laid down the following tests to determine whether a substantial question of law is involved. The tests are: (1) whether directly or indirectly it affects substantial rights of the parties, or (2) the question is of general public imp....