Brief of the case:
In case of DIT (E) Vs. M/s Jasubhai Foundation, Bombay High Court upheld the decision of ITAT in which it was held that section 10 and section 11, though mentioned in same chapter, but conditions mentioned in both sections are mutually exclusive from each other. It was held that in computing the income of charitable institutions exempt u/s 11, income exempt u/s 10 has to be excluded. Section 10 deals with income not included in total income and as far as section 11 is concerned income from property held for charitable purposes is dealt with by it. The requirement in s. 11 with regard to application of income for charitable purposes does not apply to income exempt u/s 10.
Facts of the case:
- The Assessing Officer was of the view that the return of income which was filed along with income and expenditure account, balance sheet, audited report and by assessee claiming to be a charitable organization needs scrutiny in the light of the legal provision and namely section 11 of the Income Tax Act.
- During the assessment proceedings AO noted that a sum of Rs.25,96,287/- received on account of dividend income is claimed as exempt under section 10(33) of the Income Tax Act which was disallowed.
- Further a sum received of Rs.3,21,124/- on account of long term capital gain on redemption of mutual fund investment is claimed as exempt u/s 10(38) of the Act.
- During the year under consideration an amount of Rs. 30,00,000/- claimed u/s 11 (2) utilised for setting up of Digital Research and Training Centre.
Contention of the revenue:
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