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2021 (9) TMI 131 - AT - Income TaxExemption u/s.11 - salary paid to the trustees was by way of undue benefit given to them - Denial of exemption to the assessee trust on account of income found to have been applied for the benefit of the related persons, as per the provisions of section 13(1)(c) read with section 13(3) of the Act - HELD THAT:- Where the current trustees had stepped in the shoes of their founder trustee fathers and took the trust from strength to strength since then, on the strength of their highly educated background and work experience, the finding of the Revenue that the fact of their having rendered services needed to be established with documentary evidences, we cannot agree with - it is on account of their role as President and Chairman of the trust and with their educational background and experience the trust has gone to strength to strength - no denial that the overall management of the trust rests with the trustees, Chairman and President of the trust, it is definitely not left to the employees who are employed to carry out day-to-day duties and the fact that the trust has advanced in the past years since the two trustees took over, clearly demonstrates the amount of work and involvement of two trustees in the trust. Finding of the Revenue that in the absence of any evidence demonstrating that the trustees had rendered services to the trust, the salary paid to them has tantamounted to undue benefit being given to them, we find is not in consonance with the facts of the case and is rejected. Basis adopted by the Revenue authorities for quantifying the undue benefit given to the aforesaid trustees, by comparing with the salary paid to employees of the trust i.e. the members and other working staff, is unreasonable. The quality of work rendered by the management of the trust on one hand, which includes the two trustees, and that by the employees of the trust, who are involved only in execution of the decisions taken by the management and other day-to-day activities, is totally different and there can be no comparison between the two. Therefore, the basis adopted for determining the undue benefit to the two trustees is also not found to be correct. - Decided in favour of assessee.
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