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2013 (12) TMI 1052 - AT - Income TaxExemption u/s. 11 – Honorarium and LIC premium paid on life insurance policy of Secretary of Society - Held that:- Following assessee’s own case for preceding assessment year 2007-08 - The payment of honorarium to the office bearers of the society for bona fide services rendered by them - The amounts have been made for wholly and exclusively for the purpose and benefit of assessee-society. All the persons have rendered actual services to the assessee and even in the statement of Shri Narendra Singh, he has explained the details of the services rendered by him against the payment - The assessee exists wholly and exclusively for the education and all the amounts have been spent for educational purposes and for aims of the society - The assessee was entitled for exemption u/s. 11 of the IT Act – Also the rule of consistency should be maintained and followed by the Income-tax Authorities while finalizing the assessment – Following CIT vs. Escorts Ltd. [2011 (2) TMI 579 - DELHI HIGH COURT] –The decision regarding the nature of transaction continued for several years, have to be maintained on principle of consistency - No violation u/s. 13(1)(c) was accordingly found - In the assessment year under appeal, total honorarium / salary paid to Shri Narendra Singh Dhakre was found including LIC premium - Small benefit is given to specified persons, which was included in the honorarium of Shri Narendra Singh Dhakre, who is the key member of functioning of the society, nothing could be attributed to the assessee for violation of provisions of section 13 - The AO has failed to establish that any unreasonable or excessive payments have been made to any specified person – Decided against Revenue. Disallowance u/s. 40(a)(ia) – Legal expenses - Held that:- Following S.B. Builders & Developers vs. ITO [2010 (5) TMI 686 - ITAT MUMBAI] and assessee’s own case for A.Y. 2007-08 - Disallowance made u/s 40(a)(ia) becomes only of academic importance only as the only criteria to examine is to see application/utilization of funds of the society towards its objects - Appellant’s income is to be assessed as per provisions of section 11/13 of the IT Act in place of regular business income - Application of income & only fulfillment of requirements of section 11 needs to be seen which the appellant society is found to be satisfying - The assessee has utilized more than 85% of its income for achieving the objects of the Society. Even if addition was made for non-deduction of TDS, the same cannot be treated as additional income, for which benefit of section 11 have to be granted to the assessee – Decided against Revenue.
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