Case Law Details
Sri Sivani Educational Society Vs. ITO (ITAT Visakhapatnam)
Chit fund business is governed by the principles of mutuality and contribution to a chit fund is contribution to oneself on the principle of mutuality and hence, it is not an investment as contemplated by section 13(1)(d) read with section 11(5) of Income Tax Act, 1961. As it was held that contribution to chit fund in this case, was not an investment, and much less an investment with someone else, and further that the provisions of section 11(1)(a) had been complied with by investing the entire income of the year towards charitable purposes, there was no violation of section 13(1)(d) read with section 11(5) of Income Tax Act, 1961.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-Appeal of the assessee in ITA No. 175/V/2012 is directed against the order of the Commissioner (Appeals), Visakhapatnam dated 28-3-2012 and appeals of the assessee in ITA Nos. 479 to 481/V/2012 are directed against the order of Commissioner (Appeals), Visakhapatnam dated 27-9-2012. Since, all the issues arising in these appeals are common, for the sake of convenience they are heard together and disposed of by this common order.
Facts in brief: (ITA No. 175/V/2012):
2. The assessee Sri Sivani Educational Society, Srikakulam, is a society registered under the Societies Act. It has been granted registration under section 12A of the Income Tax Act, 1961 by the CIT-II, Visakhapatnam vide proceeding no. CIT-2/trusts/62/2005-06 dated 29-9-2006. The assessee is an educational institution, running Engineering and Pharmacy colleges. During the assessment year, the assessee filed its return of income on 30-9-2009 declaring nil income, after claiming excess of income over expenditure, amounting to Rs. 84,32,548. It claimed exemption under section 11 read with section 12A of the Act. The return of income was scrutinized under section 143(3) of the Act.
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