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2018 (9) TMI 1558 - AT - Income TaxExemption u/s.11 & 12 disallowed - assessee has violated the provisions of section 13(1)(c) on account of payment to Adhikar Micro Finance Ltd., and Adhikar Grameen Products Pvt Ltd. and violation of the provisions of section 13(1)(d) by making payment of remuneration to the Secretary and President of the assessee society - Held that:- No material has been brought on record before us by the department to show that according to the provisions referred to in section 13(1)(c) of the Act, the trustee has substantial interest either singly or jointly in M/s. Adhikar Micro Finance Pvt Ltd and M/s. Adhikar Grameen Products ltd. The allegation of the department of violation of provisions of section 13(1)(c) is not sustainable . On a bare perusal of provisions of section 13(1)(d) of the Act show that to attract these provisions, it is not enough that remuneration has been paid to trustees but it has to be also shown that the remuneration paid is excessive or unreasonable as compared to the services rendered by those persons. In the instant case, nowhere the Assessing Officer has even alleged that the remuneration paid to four persons stated above were excessive or unreasonable. AO proceeded on the assumption that section 13(1)(d) of the Act is attracted merely on making of payment of remuneration to the trustees whereas the legal position is not such. In absence of any material brought before us by the revenue to show that the remuneration paid to the four persons in question were excessive or unreasonable having regard to the services rendered by them, the allegation of the Assessing Officer that there was violation of provisions of section 13(1)(d) is also unsustainable. We, therefore, set aside the orders of lower authorities and direct the Assessing Officer to allow exemption u/s.11 & 12 of the Act to the assessee as per law. - Decided in favour of assessee
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