NO 14A Disallowance on Purchase of MF from Accumulated Profit

Company purchasing mutual funds from accumulated profit, is not to subject to section 14A disallowance of interest on borrowed capital.

Bunge Agribusiness (India) (P.) Ltd. ITAT Mumbai..

Scrap sold : No TCS Applicable

Where scrap sold by assessee was derived from dismantling of constructed buildings, it was not required to collect tax at source from buyer.
Nathulal P Lavti vs. ITO (Rajkot ITAT)

Where expenditure on religious activities is more than 5 per cent of total Income, trust cannot be issued certificate of exemption under section 80G

The assessee society claimed for certificate of exemption under section 80G. The assessee society came into existence with the objects of evangelizing and edifying the body of Lord Jesus Christ so as to spread his teachings to far off villages, to publish Christian magazines, journals, etc. Besides it was also engaged in charitable activities. Subsequently, assessee introduced new objects, being establishment and running educational institutions to serve the minority Christian community by providing to them technical, medical, engineering and other humanities related education and maintenance of an orphanage and provision of relief to the lepers, aged and poor. The Commissioner noticed that the activities of the society were substantially of religious nature and not for charitable purpose. Further it was noticed that assessee-society had been undertaking substantially higher volume of religious activities as compared to its charitable activities and accordingly he rejected the grant of exemption. The assessee contended that salaries were paid to the staff, it should be considered under the head 'expenditure on charitable activities' but Commissioner had considered the salaries under the head 'expenditure for religious activities'

Tribunal Held that If the salaries to preachers is taken out from the category of expenditure for charitable activities, the expenditure on religious activities would go more than 5 per cent of the total income. Though the assessee has claimed various expenditures under the head 'charitable activities', but no evidence are placed to establish the same. He has also furnished the details of total income of the assessees but since the expenditure on religious activities is more than 5 per cent of the total income of the assessee it is hit by sub-section (5)(ii) read with sub-section (5B) of section 80G

Church of Christ Social Service Society, Amalapuram (Vishakhapatnam ITAT)