TaxTMI 
TaxTMI 
2011 (8) TMI 805
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....g substantial question of law: "Whether the Tribunal had correctly held that the assessee has not contravened the provisions of Section 13(1)(c) and 13(3) of the Income Tax Act, 1961 even though it was conclusively proved by the assessing officer 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." The brief facts of the case are that the assessee is a society registered under the Societies Registration Act, U.P. The assessee is also registered under Section 12-A of the Income Tax Act, w.e.f. 01.04.1997. For the assessment year under consideration, the assessee has filed the returned. During the scrutiny....
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....tion in section 10(23B) and 10(23C), so now the assessee could not claim exemption under Section 11 of the Income Tax Act, 1961. He further submits that the assessee is following the mercantile system of the accounting and, therefore, it was required to charge the interest on accrual basis. In Form NO. 10-B attached with the return, no details were furnished by the assessee. He also submits that the assessee could not furnish any explanation as to why the accrued interest received from Sri C.P. Singh had not been accounted for in its books of accounts. He read out the relevant provision of the Income Tax Act, which are as under: Section 13(1)(c):- (c) In the case of a trust for charitable or religious purposes or a chari....
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....vious 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) of the institution; (d) any relative of any such author, founder, person, [member, trustee or manager, as aforesaid; (e) any concern in which any of the persons referred to in clauses (a), (b), (c) [(cc)] and (d) has a substantial interest." Lastly, he justified the order passed by the lower authorities and made a prayer to set aside the impugned order passed by the Tribunal. On the other hand, Sri Neerav Chitravanshi, learned counsel for the assessee relied on the Tribunal's ord....
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....ied 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. 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, with the Registrar of the Societies and Sri C.P. Singh is the Manager of the Society. The assessee is also registered under Section 12-A of the Income Tax Act w.e.f. 01.04.1997. For the assessment year under consideration, the assessee has filed return showing nil income. The return was accompanied with Form No. 10-B....