TaxTMI 
TaxTMI 
2015 (11) TMI 982
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.... that the Assessing Officer observed that a part of the income of the trust had been used for the benefit of M/s. Mahalakshmi Garments Exports of which the trustee, Shri S. Kunjithapatham was the proprietor. This observation was made by the Assessing Officer on the basis of peak debit balance of Rs. 20,98,480 in the books of account of the trust as on October 8, 2009. According to the Assessing Officer, the assessee had committed an act in violation of section 13(1)(c) of the Income-tax Act, 1961. On that ground, the Assessing Officer denied exemption under section 11 of the Act for the impugned assessment year and disallowed all the capital expenditure. Against this, the assessee went in appeal before the Commissioner of Income-tax (Appeal....
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....sts' fund for personal benefit and thereby violating section 13(1)(c) of the Act. He further submitted that there is violation of section 13(1)(c) and 13(1)(d) of the Act, as there is a cash credit balance of Rs. 20.30 lakhs in the name of Shri S. Kunjithapatham, trustee in the books of account of the trust without appreciating that such credit balance had already been subsumed in the consolidated account. He also submitted that the Commissioner of Income-tax (Appeals) has erred in giving credit once again of the said sum of Rs. 20.30 lakhs without appreciating the fact that the peak debit balance was worked out based on the above opening balance and the same credit balance of Rs. 20.30 lakhs had already been considered by the Assessing....
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....e of the trustee's wife is considered, there is no flow of trust fund to the person Shri S. Kunjithapatham. According to the learned authorised representative, Shri S. Kunjithapatham and Smt. Mahalakshmi Kunjithapatham jointly established the charitable trust. Both of them have given interest-free loans to the assessee for starting arts college in the name of Mahalakshmi Women's College of Arts and Science and these funds were transferred from Mahalakshmi Garments Exports. In view of the above, the learned authorised representative submitted that there is no violation of section13(1)(c) of the Act. 6. We have heard both sides and perused the material on record. In this case, the funds have been transferred from the assessee-trust t....