TaxTMI 
TaxTMI 
2022 (9) TMI 872
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....his consolidated order. 2. The assessee has more or less filed common grounds of appeal for both assessment years, therefore, for the sake of brevity, grounds of appeal filed for the assessment year 2016- 17 are reproduced as under:- "i) The order of the learned CIT(A) -National Faceless Appeals Centre is arbitrary, based on surmises, against the provisions of law and contrary to the facts of the case and is therefore unsustainable. ii) The order of the learned CIT(A) is against the provisions of the Income Tax Act,1961 and binding decisions of Hon'ble Supreme Court and the Hon'ble Jurisdictional Madras High Court. iii) The learned CIT(A) erred in sustaining addition of notional income of estimated possible interest of Rs.3,3....
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....ts of the case are that the assessee is a trust registered as public charitable trust and recognized u/s.12AA of the Income Tax Act, 1961. The assessee filed its return of income for both the assessment years declaring Nil total income, after claiming exemption u/s.11 of the Income Tax Act, 1961. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that the assessee had shown an amount of Rs.27,50,000/- (Rs.10,00,000/- & Rs.17,50,000/-) as advance for purchase of land- I & II respectively under the head 'loans, advances & deposits'. The Assessing Officer called upon the assessee to produce necessary details for advance for land, but the assessee could not produce any evidences. Th....
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....essee has violated provisions of section 13(1)(d) by advancing loans & advances in violation of provisions of section 11(5) of the Act, and thus, opined that the Assessing Officer is right in rejection of exemption u/s.11 of the Act. The learned CIT(A) has also distinguished case law cited by the assessee and held that facts of said case is altogether different from facts of the present case and therefore, cannot give benefit to the facts of the assessee's case. The learned CIT(A) has also upheld imputation of interest @ 12% on notional interest. Aggrieved by the learned CIT(A) order, the assessee is in appeal before me. 5. The learned A.R. for the assessee submitted that the learned CIT(A) erred in sustaining rejection of exemption u/s.11....
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....rd both the parties, perused material available on record and gone through orders of the authorities below. The facts with regard to impugned dispute are that the assessee is a public charitable trust registered u/s.12AA of the Act, has claimed exemption u/s.11 of the Income Tax Act, 1961. The Assessing Officer denied exemption u/s.11 of the Act, for both the assessment years on the ground that the assessee has made investments in the mode other than mode as specified u/s.11(5) of the Act, and further, there is violation provisions of section 13(1)(d) of the Act. 9. I have gone through reasons given by the Assessing Officer in light of arguments advanced by the learned counsel for the assessee and I find that the Assessing Officer has trea....
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....s shown in the balance sheet is for purchase of land. In case, the assessee files necessary evidence to prove its claim, then the Assessing Officer is directed to allow benefit of exemption claimed u/s.11 of the Income Tax Act, 1961, for both the assessment years. In case, the assessee is unable to prove its case with necessary evidence, then the Assessing Officer is right in denying benefit of exemption u/s.11 of the Act, for both the assessment years. However, fact of the matter is that even if, there is violation referred to u/s. 13(1)(c) / 13(1)(d) of the Act, then tax can be levied only on the income which is in violation of provisions of section 13(1)(d) of the Act, as held by the Hon'ble High Court of Madras in the case of DIT Vs. Wo....