Dismissing the appeal of the revenue the Court held that where funds of educational trust were utilized for purpose of purchase of car in name of its trustee, there is violation of S.13(2)(b), read with S. 13(3) of the Act. However, denial of exemption under S. 11 should be limited only to amount which was diverted for purchase of car in name of prohibited person, i.e., trustee of assessee, in violation of S. 13(2)(b) of the Act. (AY. 2004-05)
CIT(E) v. Audyogik Shikshan Mandal (2019) 261 Taxman 12 (Bom.)(HC) Editorial : Audyogik Shikshan Mandal v. ITO (2015) 156 ITD 1 (TM) (Pune)(Trib.) is affirmed.
S. 13 : Denial of exemption-Trust or institution-Investment restrictions – Funds utilised for purchase of car in name of its trustee-Denial of exemption should be limited only to amount which was diverted in violation of S. 13(2)(b) of the Act. [S. 11, 132 (2)(b)]