TaxTMI 
TaxTMI 
2011 (8) TMI 461
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....ther, under the facts and circumstances of the case, the Hon'ble ITAT was correct in holding that the assessee had not contravened the provisions of section 13 (1) (c) and 13 (3) of the I.T. Act, 1961 even though it was conclusively proved by the A.O. that the loan was given without interest to the person referred to in section 13(3), which is in contravention to the provisions of section 13(2)(a) of the I.T. Act, 1961." 2. The brief facts of the case are that the assessee is a society registered under the Societies Registration Act, U.P. w.e.f. 18.12.1990 and is running an educational institution. The assessee is also registered under Section 12-A of the Income-tax Act, w.e.f. 01.04.1994. During the assessment year under consideration, th....
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....e loan given to Sri Virendra Singh was reflected in the balance sheet and in this regard, the relevant coloumns of Annexure to Form 10B filed along with the return of income, were silent. He also submits that a resolution was passed by the assessee but it was silent regarding repayment of principal amount. When no schedule for the repayment of the principal amount has been decided in the resolution, how could the charging of interest be decided. He further submits that the so-called resolution was only an afterthought and the Tribunal has wrongly relied upon it, while deciding the issue. Lastly, he justified the order and made a prayer to set aside the impugned order passed by the Tribunal. On the other hand, Sri Neerav Chitravanshi, the l....
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....e provision of section 13(2) and 13 (1) (c) of the Act. Sub-clause (ii) of section 1 (c) of the Act states that any part of income or property, which is applied directly or indirectly for the benefit of any person, referred to in section 13 (3), will form part of the income of the trust. According to him, against the loan, a security in the form of surety was given. 5. We have heard both the parties at length and gone through the material available on record. From the record, it appears that the assessee is a society registered under the Societies Registration Act, w.e.f. 18.12.1990 with the Registrar of the Societies and Sri Virendra Singh is the Treasurer of the society. The assessee is also registered under section 12-A of w.e.f. 01.04....
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....tion is, or continues to be, lent to any person referred to in sub-section (3) for any period during the previous year without either adequate security or adequate interest or both;" Section 13(3):- (3) The persons referred to in clause (c) of sub-section (1) of sub-section (2) are the following namely :- (a) the author of the trust or the founder of the institution; (b) any person who has made a substantial contribution to the trust or institution, [that is to say, any person whose total contribution up to the end of the relevant previous year exceeds [fifty] thousand rupees]; (c) where such author, founder or person is a Hindu undivided family, a member of the family; (cc) any trustee of the trust or manager (by whatever name called....