| The Tax Publishers2020 TaxPub(DT) 0805 (Mum-Trib) INCOME TAX ACT, 1961
Section 11(2)
Assessee trust had duly mentioned the purpose of accumulation, i.e., to compensate trading members or a constituent, where a trading member being declared a defaulter on the stock exchange. It was the sole object of trust for which this protection fund was created and thus sufficiently satisfied the requirements of section 11(2). The trust had only one object and thus there was no question of ambiguity. Accordingly, directed to allow claim of assessee under section 11(2).
|
Charitable trust - Exemption under section 11 - Accumulation of income - Rejected claim of assessee on the ground that assessee had not mentioned specific purposes of accumulation but only stated the objects of trust in the Form No. 10.
Assessee trust was formed under direction of Ministry of Finance and SEBI and the trust came into being on 11-7-1995 with sole object of safeguarding OF interest of investors/trading members by compensating the loss which investors or members might suffer due to settlement on stock exchanges. Earlier entire income of the trust comprising contribution from members, stock exchanges and income on investments, was exempt, however with effect from 1-4-2007 section 10(23EA) amended and exemption was restricted only to the contributions received by trust from stock exchanges and it's members and thus assessee started claiming exemption under section 11(1) & 11(2) qua income from investments. During the year the assessee claimed accumulation to the tune of Rs. 33,19,23,133 by filing Form No. 10 along with return of income. AO rejected claim of assessee on the ground that assessee had not mentioned specific purposes of accumulation but only stated the objects of trust in the Form No. 10. Held: As apparent assessee trust had duly mentioned the purpose of accumulation, i.e., to compensate trading members or a constituent, where a trading member being declared a defaulter on the stock exchange. It was the sole object of trust for which this protection fund was created and thus sufficiently satisfied the requirements of section 11(2).
Supported by:CIT(E) v. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust, Bharat Kalyan Prathistan v. DDIT(E) (2008) 299 ITR 406 (Delhi-HC) : 2007 TaxPub(DT) 1657 (Del-HC). Distinguished:DIT(E) v. Trustees of Singapore Charitable Trust.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, MUMBAI BENCH
MAHAVIR SINGH, V.P. & MANOJ KUMAR AGGARWAL, A.M.
National Stock Exchange Investor Protection Fund Trust v. DCIT
I.T.A. Nos. 917/Mum/2017 & 823/Mum/2017
5 February, 2020
Assessee by: J.D. Mistry, learned Sr. Counsel
Revenue by: Rahul Raman, learned CIT-DR
Manoj Kumar Aggarwal, A.M.
1.1 Aforesaid cross appeals for assessment year [in short referred to as 'AY'] 2012-13, contest the order of learned Commissioner (Appeals)-1, Mumbai, [in short referred to as 'CIT(A)'], Appeal No. Commissioner (Appeals)-I/E-II (55)/2015-16 Order, dated 2-11-2016.
 SUBSCRIBE FOR FULL CONTENT
|