TMI Blog2018 (8) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... services to the trust. - Matter remanded back. - ITA No. 300/JP/2018 - - - Dated:- 18-7-2018 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For The Assessee : Shri K.L. Moolchandani (Adv.) For The Revenue : Shri Vrindera Mehta (CIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the Revenue is directed against the order dated 29.12.2017 of CIT (A), Jaipur for the A.Y. 2014-15. The Revenue has raised the following grounds as under:- 1) On the facts and in the circumstances of the case and in law the Ld. CIT (A) has erred in deleting the addition of surplus amounting to ₹ 3, 20, 75, 265/- made on account of rejection of exemption u/s 11 of the Act invoking provisions of section 13(1)(c)(ii) of the I.T. Act, 1961. 2) On the facts and in the circumstances of the case and in law the CIT(A) has erred in ignoring the facts that AO had denied exemption u/s 11 for the year under consideration as the founder of the trust, treasure of the trust, member of trust are getting personal benefit in the form of salary which is not reasonable. 3) On the facts and circumstances of the case and in law the Ld. CIT (Appeals) has erred in deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought the entire surplus to tax as per Section 164(2) of the Act. The assessee challenged the action of the AO before the ld. CIT(A) and contended that the payment of salary was not excessive and it was reasonable by considering the services rendered by these persons. The ld. CIT(A) has overturned the order of the Assessing Officer and allowed the claim of the assessee U/s 11 of the Act. 3. Before us, the ld. DR has submitted that the assessee has not disputed the fact that the payments of salaries were made to the persons specified U/s 13(3) of the Act, therefore, the provisions of Section 13(1)(c)(ii) of the Act are applicable in the case of the assessee. He has further contended that the ld. CIT(A) has allowed the claim of the assessee without giving a finding of the fact whether these persons have rendered any services to the assessee and therefore, the payment is not excessive. The Assessing Officer has clearly held that the assessee has not produced any documentary evidence to show that these persons have actually rendered any service to the assessee trust. He has relied upon the order of the Assessing Officer. 4. On the other hand, the ld. AR of the assessee has subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had over-looked this vital fact. In the circumstances, the findings of the Id. AO on the point are illfounded. Similarly the interest was also paid as per prevalent rates and having considered the operational exisgencies of the Trust. By no stretch of imagination, these payments could be regarded 'excess'; particularly when all such expenses had been accepted by the department as genuine, reasonable and fair in the past. As per principles of consistency, the past history of the case could not be ignored in absence of any material brought on record to deviate from the past history of the case. iii) To make this point more clear, it would be in the fitness of things to briefly discuss the nature of the services rendered by these persons, their qualification, experience and other technical qualification to demonstrate the justification of making such payments to the specified persons as discussed in the enclosed 'Annexure-A' ( iv) It is needless to re-iterate that such payments made to the specified persons in the A. Yrs. 2012-13 2013-14 were held to be fair and reasonable by the Revenue. During this year, the appellant Trust continued to operate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival submissions as well as the relevant materials on record. As per the details of the payment of salaries to these 6 persons we find that these persons are falling in the category of specified persons U/s 13(3) of the Act. This fact has not disputed by the assessee but the assessee s claim is that payment of salary made to these persons is not excessive but it is reasonable considering the services rendered by these persons. The Assessing Officer has disputed any service being actually rendered by these persons though on papers these persons are holding various positions. We have gone through the orders of the authorities below as well as the submissions made by the assessee. Except the explanation and submissions of the assessee no reference is made by the ld. CIT(A) to any evidence filed either before the Assessing Officer or before the ld. CIT(A) to show that these persons have actually rendered the services to the assessee trust. The ld. CIT(A) has allowed the claim of the assessment only on the ground that the AO has not brought any material on record to show that the payments made to these persons is not reasonable and excessive. We further note that as per the details of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or any property of the trust or institution (whenever created or established) is during the previous year used or applied, directly Or indirectly for the benefit of any person referred to in sub-section (3): Provided that in the case of a trust or institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3), if such use or application is by way of compliance with a mandatory term of the trust or a mandatory rule governing the institution: Provided further that in the case of a trust for religious purposes or a religious institution (whenever created or established) or a trust for charitable purposes or a charitable institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
