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2020 (11) TMI 559 - ITAT CHANDIGARHExemption u/s 11 - denial of exemption to extent of rent paid by the assessee to one of its trustees holding the same to be on higher side as compared to market rate by invoking the provisions of section 13 (1)(c) - undue benefit had been given to the trustee by way of rent paid - as per CIT-A assessee society purchased further tracts of land - HELD THAT:- The assessee had duly demonstrated the reasonableness of the rent paid comparing the per sq. ft. rent paid per month in the present case which came to ₹ 10. 53, with other comparable cases which varied from ₹ 28. 84 on premises leased to Punjab National Bank to ₹ 62 on premises leased to ING Vysya Bank in the same vicinity. No infirmity in the aforesaid facts has been pointed out by the Revenue before us, nor has, we find the AO done so during assessment proceedings when the same was brought to his notice, or the Ld. CIT(A) who did not consider it necessary to comment on the same. Rent paid to Trustee, was found reasonable by the ITAT in A. Y 2003 - 04 & 2004 - 05, when identically exemption was denied by the AO - DR has not brought to our notice any distinguishing facts vis a vis those years. Further in subsequent assessment years, i. e from A. Y 2010 - 11 TO A. Y 2014 - 15, the Revenue made no such addition to the income of the assessee society in scrutiny assessment u/ s 143 (3) of the Act. No reason for holding the rent paid by the assessee society to Sh Amar Jyot Singh in the impugned year as unreasonable. CIT(A) has gone on a totally different tangent for holding so stating that the fact that the assessee society purchased further tracts of land when it should have purchased the land taken on lease so as to do away with the rent payment, shows that undue benefit was being given by the assessee society to the lessor Shri Amarjyot Singh - No merit in this reasoning of the Ld. CIT(A) particularly when the assessee had demonstrated that the land purchased was not lying surplus with it but had been put to use for furthering the objective of the assessee society of imparting education. The assessee we have noted had filed a complete detail of usage of land both owned and leased by it - when the entire land was required by the assessee society for its objective of imparting education, there cannot be said that any benefit had been given to the lessor by retaining its land on lease instead of buying it off, as per the reasoning of the Ld. CIT(A) also. Denial of exemption u/ s 11 rejected - Decided in favour of assessee.
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