Showing posts with label Section 12. Show all posts
Showing posts with label Section 12. Show all posts

Saturday, July 7, 2012

Assumptions are not allowed to invoke the provision of sec. 13 so as to withdraw the sec. 11 and 12 exemption


The assessee, a cooperative society was running two educational institutions on a leased land. The land was taken in accordance with a renewable lease deed for a period of 30 years. The AO took the assumption that the lessor will get the benefit, at the end of the tenure of the lease, in the form of capital structure on the land; hence, it invoked the provisions of section 13 of IT Act and disallowed the exemption under section 11 and 12 of IT Act. However, CIT(A) deleted the addition made by AO on the basis of supplementary lease deed which provided for the payment to the society for capital structure by the lessor, if it couldn't be removed at the expiry of lease term.

The Tribunal dismissed the appeal of revenue and allowed the exemption under section 11 and 12 to assessee, it held on the following grounds:

1) The assessee was in an advantageous position to get a land at such a lower rate and allowed to carry out the construction on the leased land at its own cost;

2) Even if the lease deed is not renewed at the expiry of its term, the structure can be removed by the assessee society; and

3) AO allowed depreciation to the assessee @ 10% on building i.e. AO admitted the ownership of the building with the assessee.

Therefore, the order of the CIT (A) was upheld and exemption under section was 11 and 12 allowed to the assessee - ACIT v. N.L. EDUCATION SOCIETY [2012] 22 taxman 285 (Agra - Trib.)

Sunday, September 18, 2011

Society , trading activity can not be claimed benefit u/s 12A & 80 G

Society for The Small & Medium Exporters Vs DIT [ITA No.3182 & 3183/Del/2008, dtd. 29.04.2011]
Benefits of Sec. 12A and 80G cannot be allowed if there is no charitable activity and assessee undertakes only commercial activity

ITAT Delhi bench held that in a case where the objects of the society may be charitable, but, in the absence of carrying on those activities despite the fact that the activities which were carried on were for the purpose of generating income, the society is not entitled for registration for benefits of Sec. 12A and 80G for that year. It has been held that for assessment years in which the assessee does not carry out charitable activity, the assessee has been rightly refused to get benefit of registration as charitable institution. The only activity which has been carried out is for the purpose of generating income, which is not a charitable activity in itself........
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Monday, July 11, 2011

Where DIT (Exemptions) rejected assessee's application under section 12A on

Where DIT (Exemptions) rejected assessee's application under section 12A on ground of certain discrepancies in assessee's accounts, Tribunal was not justified in allowing assessee's appeal without noticing discrepancies pointed out by DIT (Exemption) - [2011] 10 taxmann.com 83 (Kar.)