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2018 (12) TMI 55 - AT - Income TaxDisallowance of salary to employees - assessee is a charitable trust - Held that:- Assessee did not make any effort to produce them before AO to show that they are working with the assessee and show the amounts paid to them duly confirmed. No doubt, the assessee can make payment in cash however it is for the assessee to show the authenticity and reliability of such payment. Whenever anybody questions the assessee about the genuineness of the payment, it is the duty of the assessee to discharge burden cast upon it by producing those employees or adequate details of those employees before the revenue authorities. It should not be forgotten that assessee is a charitable trust and is a property of public at large, therefore higher duties are cast on charitable trusts. AO and the Commissioner of income tax appeals with respect to this addition, we do not find any infirmity in their findings. In view of this the addition of ₹ 1569560 which is part of the salary paid by the assessee in cash to the teachers whose identity and genuineness of the payment could not be established by the assessee is confirmed. Withdrawal of exemption under section 11, 12 and 13 - surplus Land which is excess of income over expenses for the year - Held that:- Additional conditions for non-applicability of section 11 are provided under section 13 of the income tax act. The cash payment of the salary which has not been proved by the assessee is already held to be covered under section 13 (1) (a) and disallowed. One of the authorities on whom the powers of the verification of the genuineness of the activities are vested is Commissioner of income tax, who grants registration under section 12 A of the income tax act. In view of the continuation of the registration under section 12 A of the income tax act of the trust we do not find any reason to not to grant the benefit of section 11 and 12 of the income tax act to the appellant trust. Accordingly, we allow ground number 2 of the appeal and direct the learned assessing officer to grant exemption under section 11 and 12. Disallowance of depreciation on fixed assets - Held that:- Issue is squarely covered in favour of the assessee by the decision of the honourable Supreme Court in case of Commissioner of income tax vs Rajasthan Gujarati charitable foundation [2017 (12) TMI 1067 - SUPREME COURT] there was no specific provision in this behalf in the Income Tax Act, has made amendment in Section 11(6) of the Act vide Finance Act No. 2/2014 which became effective from the Assessment Year 2015-2016. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature. It also follows that once assessee is allowed depreciation, he shall be entitled to carry forward the depreciation as well. - Decided in partly in favour of assessee
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