TaxTMI 
TaxTMI 
2019 (2) TMI 633
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.... heard both the appeals together and disposing the same by this common order. 2. The first issue arises for consideration is violation of Section 13(1)(c) and 13(1)(d) of the Income-tax Act, 1961 (in short 'the Act'). 3. Shri R.V. Aroon Prasad, the Ld. Departmental Representative, submitted that the assessee-trust is registered under Section 12AA of the Act as a charitable institution. According to the Ld. D.R., the Assessing Officer found that the assessee shown an amount of Rs. 4,41,92,756/- as loan and advance to M/s Futura Construction Pvt. Ltd. as on 31.03.2011. The assessee claimed before the Assessing Officer that that the said advance was given to M/s Futura Construction Pvt. Ltd. for purchase of land for the purpose of c....
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.... next issue arises for consideration is advance made to some of the employees without charging interest. 7. Shri R.V. Aroon Prasad, the Ld. Departmental Representative, submitted that the advance made to employees without charging interest is for undue advantage at the cost of society fund. According to the Ld. D.R., the borrowed funds of the assessee-trust was advanced as interest free loan to the employees and other interested persons, hence, there was a clear violation of Section 13(1)(c) of the Act. The assessee, according to the Ld. D.R., has also advanced a huge loan to other societies without any repayment condition. According to the Ld. D.R., the loan advanced to other trusts/institutions is still outstanding and it was not repaid ....
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.... Memorandum, according to the Ld. counsel, it is obvious that the society intended to start a CBSE school at Perungudi at a minimum of one acre of land. M/s Futura Construction Pvt. Ltd. was owning plot No.117A at Developed Plot Estate, Peungudi. M/s Futura Construction Pvt. Ltd. has also undertaken additional land as required for construction of CBSE school. Therefore, according to the Ld. counsel, as per the Memorandum, an advance was made to M/s Futura Construction Pvt. Ltd. M/s Futura Construction Pvt. Ltd. made an attempt to purchase land from M/s Nischa Deep Enterprises Pvt. Ltd. with regard to condition to comply with the requirement of minimum one acre land. Therefore, according to the Ld. counsel, it is not correct to say that M/s....
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...., this advance was also made for purchase of land for school building. When the assessee made advance to Shri C.M. Babu for purchase of land for the purpose of construction of school, it cannot be said that there is a violation of Section 13(1)(c) of the Act. Moreover, advances were made to the employees of the society so that the object of the trust can be carried out effectively. 14. Referring to next ground of appeal, the Ld.counsel submitted that the assessee advanced money to other trusts which have similar object, from the current income, therefore, there is no violation of Section 13 of the Act. According to the Ld. counsel, what is prohibited under the Act is the transfer of funds from the accumulated income of the earlier year. In....
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.... the assessee. A similar view was expressed by this Tribunal in DCIT (Exemptions) v. Vels Institute of Science, Technology & Advanced Studies (2015) 11 TMI 857. 17. The next ground of appeal with regard to advance of Rs. 30 lakhs made to Shri C.M. Babu is concerned, it is not dispute that the assessee advanced amount for purchase of land. Merely because there was delay in completion of sale deed, this Tribunal is of the considered opinion that it cannot be said that there was any violation of Section 13(1)(c) or 13(2)(b) of the Act. Therefore, when the assessee advanced money for acquisition of property in connection with charitable object carried on by the assessee, this Tribunal is of the considered opinion that it has to be construed as....