It would be relevant to mention here that the trust was formed on 11-1-2012, the application for registration under section 12AA was submitted by the appellant on 27-3-2012, i.e., within a period of three months of its creation. The school activities started in June, 2012. The appellant submitted its books of account up to September, 2012 before the Commissioner. The Commissioner, after examining the statement of accounts, for such a short period formed its opinion that the activities of trust were not charitable in nature. The Commissioner did not raise any objection on the objects of the trust. It was premature for the Commissioner to judge the activities of the trust by just glancing through the statement of accounts of the trust of such a short period.
A perusal of the statutory provisions makes it clear that it does not provide a blanket deduction i.e. in order to succeed in a claim of deduction; the concerned assessee has to derive profits and gains from any business referred to in sub-section (4). Further, sub-section (4) prescribes applicability of clause i.e. the case in which the deduction provision would apply. It is in this sub-section that the legislature has enumerated the nature of the undertakings, their activities in contributing raising of infrastructure.
Intention of the Legislature is to regulate the manner of investment of the money left with an assessee-Trust after utilization for charitable purpose. Subscription to chit funds itself will be utilization of the funds of the assessee since right of the assessee is only to prize a chit or participate in a draw of lots. It is not an investment or deposit of a money which is available as surplus with assessee.
It is essential that the expenditure incurred on the construction of any structure on the leased premises should result in saving of the revenue expenditure at the subsequent stage. In the present case, from the pleadings of both the sides, it cannot be ascertained whether the assessee is getting enduring benefit of revenue nature from the additional structure or renovation/repairs undertaken by the assessee on the leased out premises. In our considered opinion, the case of the assessee very much falls within the ambit of Explanation 1 of section 32(1) of the Act. Therefore, both the appeals of the assessee are dismissed being devoid of merit.
In view of Explanation 2 to section 9(1)(vi), the consideration for transfer of all or any rights in respect of any copyright, including copyright for films and videotapes, used in connection with television or tapes, would fall within the definition of ‘royalty’. What is excluded are consideration for sale, distribution and exhibition of cinematographic films.
Assessee admittedly was having only one homogenous business activity that was construction and selling of flats. No doubt, it was having five projects, but the question is whether each of the projects were forming part and parcel of one unit or part of one industrial undertaking.
A perusal of the legislative history of the provision makes it clear that the same was incorporated in the Act with effect from 01.04.1981 by the Finance Act, 1981. Initially, it had provided tax holiday of five consecutive year beginning with the assessment year relevant to the previous year in which the concern undertaking begins manufacturing or production of the article, things or computer software.
Section 54EC grants relief to those assessees, who transfer a long term capital asset resulting in capital gains by making investment in various bonds with in within a period of six months from the date of transfer. The Legislature intent in enacting the provision is to provide benefits to those assessees who park their consideration received in REC bonds or those issued by the National Highway Authority of India.
The first question is whether the assessee-company had produced reasonable evidence to support its claim of incurring expenditure to the extent of Rs. 32,99,650. The answer is a categorical “no”. This position has been upheld even by the Tribunal. The assessee has not produced details or any evidence to support its claim of expenditure to the extent of Rs. 32,99,650.
Deduction under section 24(b) and computation of capital gains under section 48 of the Act are altogether covered by different heads of income i.e., income from ‘house property’ and ‘capital gains’. Further, a perusal of both the provisions makes it unambiguous that none of them excludes operative of the other.
