CHAKRA FOUNDATION Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Sri Chakra Foundation, which is the assessee, was registered under Section 12A of the Income Tax Act in May 1991, as a society established to run educational institutions. The society purchased a land from the Tamil Nadu Housing Board for the purpose of setting up a school. They did in fact start a school by name Chakra Matriculation School.

(2.) Claiming that in the financial year relevant to the assessment year 1996-97, they had sold the property to another trust by name SBOA Educational Trust, the assessee filed a return of income. In the return of income, the assessee claimed long term capital loss to the tune of Rs.1,07,783/-, due to the sale of the property.

(3.) The return of income filed by the assessee on 28.1.1997, was processed under Section 143(1)(a) on 23.6.1997. It was selected for scrutiny and a notice under Section 143(2) was issued. Though the Chairman and Managing Trustee of the assessee appeared before the Assessing Officer, they could not produce some documents. They produced xerox copies of some documents, which were found incapable of being verified.