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1 - 6 of 6 (1.56 seconds)Section 32 in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
The Finance Act, 2018
People Education And Economic ... vs Income-Tax Officer on 12 January, 2006
6. The Ld.D.R submitted that after the amnendment of the section2(15),
any activity in the nature of trade, commerce or business, or any activity of
rendering any service in relation to any trade, commerce or business for a
cess or fee or any other consideration, irrespective of the nature of use or
:- 11 -: Grama Vidiyal Trust
application shall not be treated as "object of general public utility". Further,
he submitted that the assessee's activity of micro-financing is a business and
it collects interest, therefore, the assessee's activity cannot not be treated as
"charitable purpose". The rate of interest collected is as per normal banks
lending procedure. Since the assessee is in financial business, CIT(A) should
have affirmed the stand of A.O. The ld.D.R further pointed out that the
assessee's micro-financing does not come into the ambit of the definition
u/s.2(15) in view of the decisions of ITAT, Chennai and ITAT, Bangalore in
the cases of Socio-Economic Development Association vs ITO 2011 TIOL
754-ITAT, Chennai and Janalakshmi Social Services 33 SOT 197 (Bangalore)
respectively. The ld.D.R submitted that the assessee during the assessment
proceedings has stated before A.O that the assessee stopped the micro-
finance activities from January 2008. But before CIT(A) the trust took a
totally opposite stand stating that the trust is still carrying micro- financing
activity and no opportunity was given by CIT(A) to A.O. to explain this
dichotomy. Ld.D.R submitted that the assessee trust is carrying out micro-
finance activities in subsequent years because the assessee trust passed a
resolution in the Executive Board stating that "all the lending activities
carried out by Grarna Vidiyal Trust will be transferred to Grama Vicliyal Micro
Finance (P) Ltd. from January 2008 onwards" and in fact a copy of resolution
was filed before A.O. during assessment proceedings. Further, ld.D.R
submitted that the assessee's micro-financing activity has been transferred
to a company in which the same activity is treated as business. The very fact
that assessee has treated the activity as "business" in the hand of company
:- 12 -: Grama Vidiyal Trust
in subsequent assessment years shows that the micro-finance is not a
charitable activity in nature and it is the self admission of assessee, that it is
pure business activity. Further, ld.D.R mentioned that the CIT(Appeals) has
erred in, accepting the assessee's contention that the trust has neither sold
or transferred any asset either tangible or intangible including goodwill or
technical knowhow attracting the provisions of capital gains and also that the
assessee's representative has admitted during the assessment proceedings
that the trust has received `8.24 crore from Grama Vidiya Micro Finance Ltd.
towatds the transformation consideration of transfer of capital assets from.
the-' Gráma Vidiyal Trust to Grania Vidiya Micro Finance Ltd. The grievance
of the Revenue is that the CIT(A) has not adjudicated the contention of A.O
that `8.24 crores was credited to the capital a/c. of assesseë trust directly
which shows that the assessee trust has treated it as a receipt. Ld.D.R
submitted that the assessee cannot claim deduction towards payment to ASA
Trust, as the activities of the Trust are not charitable in nature and also the
assessee cannot write off an amount of 10,75,525/- since the assessee trust
is not continuing the business during the relevant period. Further, ld.D.R
submitted that the assessee had claimed the entire expenditure prior to
previous year relevant to assessment year 2009-10, as application of
income. In other words, the assessee has claimed the cost of capital asset
as revenue expenditure in earlier year and hence again claiming depreciation
would be double deduction. Hence, ld.D.R pleaded that the order of
Ld.CIT(A) may be set aside.
Section 80G in The Income Tax Act, 1961 [Entire Act]
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