[aaykarbhavan] No denial of sec. 11 relief when some income of trust was also exempt under sec. 10

No denial of sec. 11 relief when some income of trust was also exempt under sec. 10

May 14, 2014[2014] 44 taxmann.com 447 (Mumbai - Trib.)

IT-I: For availing exemption under section 11, income derived from property held under trust has to be considered irrespective of fact that some of income so derived is also exempt under section 10

IT-I: In terms of clause (iia) of proviso to section 13(1)(d), mere accretion of existing holding of shares by way of bonus shares or acceptance of donation in kind or any asset not conforming to provisions of section 11(5) will not make trust lose tax exemption if trust/institution converts asset not conforming to section 11(5) into permissible investment within one year from end of financial year in which such bonus shares or other assets are received

IT-I: Violation of section 13(1)(d) and section 13(2)(h) would disqualify exemption of income from investment in non-conforming of section 11(5) but not entire income of trust if other income of trust otherwise fulfils condition for exemption

IT-II: Sections 11 and 13 do not operate as overriding effect to section 10 and, thus, once conditions of section 10 are satisfied, benefit of exemption of income cannot be denied by invoking provisions of sections 11 to 13

IT: Education grant given to Indian students for studying abroad fulfils conditions of application of money in order to claim exemption under section 11

 

Regards

Prarthana Jalan

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