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2018 (1) TMI 1233 - AT - Income TaxEntitled to exemption u/s 11 - Held that:- Tribunal at Agra in the case of Shri Amol Chand Varshney Sewa Sansthan reported in (2013 (6) TMI 218 - ITAT AGRA) exemption u/s 11 cannot be denied on mere presumption. In the case on hand also, the AO has not brought out on record that the related concern has benefited during the relevant financial year. Another factor which needs consideration is that the construction agreement is alleged to have been executed on 15.03.2008 and the advance has been given on 31.03.2008 and the said advance has been returned over a period of two years thereafter and no disallowance or an addition has been made in the subsequent A.Ys towards the interest free advance. All these transactions have been carried out before the date of survey i.e. on 25.10.2008. Therefore, it cannot be said that this contention of the assessee is an afterthought. In view of these reasons, we agree with the findings of the CIT (A) that the assessee cannot be denied the exemption u/s 11 of the Act for the relevant A.Y. Exemption u/s 11 has been denied is the payment of salary to Shri T.V. Pranay Kumar - Held that:- assessee had filed the proof that Mr. T.V. Pranay Kumar is registered as an Advocate and that he has rendered services to the Society in legal proceedings before the Hon'ble High Court of Andhra Pradesh and before the Civil Courts at Secunderabad. We find that the CIT (A) has also observed that the AO has not disputed the reasonableness of the payment to Mr.T.V. Pranay Kumar or that it was in pursuance of the objects of the Society Trust. In the absence of any evidence to the contrary, we do not see any reason to interfere with the order of the CIT (A). Ground No.7 is accordingly rejected. In this view of the matter, we hold that the assessee cannot be denied the exemption u/s 11 of the Act for the relevant A.Y. Applicability of provisions of section 40(a)(ia) - Held that:- IT (A) has accepted the contention of the assessee without any verification as to whether the said expenditure has been claimed by the assessee in the income and expenditure a/c. As rightly pointed out by the learned Counsel for the assessee and also held by the CIT (A), when the assessee is being assessed as a charitable institution, the provisions of section 40(a)(ia) of the Act are not applicable. In view of our finding above, that the assessee is entitled to the exemption u/s 11 of the Act, we do not see any reason to interfere with the order of the CIT (A) on this issue. Estimation of tuition fee received by the assessee on the basis of number of students studying in the school of the assessee - Held that:- CIT(A) has correctly deleted the addition by observing that the Special Auditor has not pointed out any discrepancy in fee receipts and also that the AO has not accounted for concession fee in respect of children of teaching and non-teaching staff.
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