Assessee-trust is running Kalyan Mandapam on commercial lines for fees and cess like any other persons carrying out business operations. Except a minimum amount of donations, the assessee has not spent any amount for charitable purpose as per its objects specified in the deed of trust. Receipts from the marriage hall related activities are more than the specified limit as per proviso to S 2(15). Rejection of exemption is justified. Printing a diary of trustees and their family members does not per se amount to diversion of trust funds for the benefit of trustees. Amounts spent for the Diwali get-together of the trustees in the course of carrying on activities of the trust cannot be considered as diversion of trust funds for the benefit of trustees-No violation under section 13(1)(c). The assesseee Trust is denied the exemption hence the depreciation is directed to be allowed on commercial principle. When exemption is denied corpus donations is to be includable in total income as per the provisions of the Act. As the exemption is denied the expenditure is to be allowed for earning of income including its activities as deduction. As the house property is used for the benefit of the members of one family the expenditure incurred is not allowable as deduction. (AY. 2013-14 to 2019-20)
Ramsahaimal Sahuwala & Sons Charitable Trust v. ACIT (2023) 37 NYPTTJ 1514 /(2024) 227 TTJ 957 / 238 DTR409 / 163 taxmann.com 175 (Chennai) (Trib)
S. 11 : Property held for charitable purposes-Composite objects-Kalyan Mandapam on commercial lines for fees and cess like any other persons carrying business-Receipts from the marriage hall related activities are more than the specified limit as per proviso to S 2(15)-Rejection of exemption is justified-Printing a diary of trustees and their family members does not per se amount to diversion of trust funds for the benefit of trustees-Amounts spent for the Diwali get-together of the trustees in the course of carrying on activities of the trust cannot be considered as diversion of trust funds for the benefit of trustees-No violation under section 13(1)(c)-Depreciation-Commercial principle-Corpus donations-Exemption denied-Includable in total income-Expenditure-Expenditure is to be allowed for earning of income including its activities as deduction-House property for the benefit of the members of one family-Not allowable as deduction. [S. 2(15), 13(1)(c), 22, 24, 37(1), 133A]
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