TaxTMI 
TaxTMI 
2024 (8) TMI 746
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....C], Delhi for the assessment year 2016-17. 2. The assessee raised 10 grounds of appeal amongst which, the only issue emanates for our consideration is whether the ld. CIT(A) is justified in confirming the order of the Assessing Officer in denying exemption under section 11 of the Income Tax Act, 1961 ["Act" in short] in respect of value of car purchased in the name of trustee in the facts and circumstances of the case. 3. The assessee is a trust conducts its activities under the name and style of M/s. Sri Karpaga Vinayagar Educational & Charitable Trust. The objects of the assessee are in carrying out charitable activities, i.e., education, relief to poor, etc. The assessee filed its return of income admitting NIL income and under scr....
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.... 3.1 Ground No. 2: The appellant claimed that the car was purchased in the name of the managing trustee with the sole objective of saving considerable amount of road tax and insurance. The appellant was clearly asked, vide notice dated 01/11/2023, to give details of the savings made following this methodology - no response has been filed by the appellant and it is evident that it has nothing to state in the matter. Therefore, the ground is dismissed. 3.2 Grounds No. 3, 4, 5 and 6: The appellant states that the Assessing Officer (AO) has failed to note that the car loans and all other related expenses or accounted for in the books of the assessee and therefore it is the real and effective owner of the asset. It is seen that the ....
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....ted to the companies and not on purchase of vehicle in the name of the trustee by utilizing the trust fund and hence, not squarely applicable to the facts of this case. 3.2.4 Further, it is clear from the above transaction that the income or property of trust was diverted in favour of the managing trustee of the trust Smt. S Jayalakshmi, who is person referred u/s 13(3) of the I.T. Act, and the above transaction is a clear violation as per clause (g) of sub-section (2) of section 13 r.w.s. 13(1)(c) of the I.T. Act." 3.2.5 The situation remains the same, the usefulness of this asset in connection with the activities of the trust or how it has dominion over this asset, as claimed, remain a mystery. The AO is directed to furt....
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....lakshmi for the simple reason that it gave us considerable relief by way of lower road/life tax and insurance charges. It may be mentioned that the road/life tax and insurance charges payable for a new car registered as a commercial vehicle is much more compared to a ownership car. b) The new car purchased is accounted for in the books of our trust and is shown as an asset in the Balance sheet as at 31.03.2016. For the purchase of the new car, we had taken a loan from ICIC Bank Ltd., Palani Branch for which Ms. S. Jayalakshmi and our Trust are applicant and co-applicant respectively. c) The car loan from Bank is duly accounted for in the books of our Trust and appears as a liability in the Balance Sheet as at 31.0....