TMI Blog2018 (10) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... es in 12 countries for over ten years. She was on the board of coalition against trafficking in women and the advisory councils of Polaris Project, Vital Voices, Ricky Martin Foundation, Asia Society, Nomi Network, the coalition against trafficking in women and cents for relief. The primary objective of the all these forums matches with some of the objectives of the Assessee Trust. The aforesaid Trustee had rich experience of over 25 years which was in line with the objectives of the Assessee Trust. As against the above credentials, the revenue has failed to place on record any comparative chart or any other corroborative evidence to establish that the aforesaid payment was excessive or unreasonable, in any manner. This being the case, the payment of salary as aforesaid, in our opinion, could not be a ground to deny the deduction to the assessee. Motor Car funded out of assessee Trust has been registered in assessee’s name and the same is alleged to be under the control of the Trustee - Held that:- We find that the said car was purchased in the year 2010-11 and this is the third year since purchase of the car. The revenue, except for mere allegations, is unable to point out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see : Shashi Tulsiyan, Ld. AR ORDER PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. Aforesaid appeal by assessee for Assessment Year [AY] 2012-13 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-1 [CIT(A)], Mumbai, Appeal No.CIT(A)-I/IT/E-1(55)/2015-16 dated 20/10/2016 by raising following grounds of appeal:- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the assessed income of the appellant at ₹ 4,16,77,269/- as against the income declared in the return of income as Nil. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the rule of consistency is not applicable in the case of the appellant even though the factual position remains the same as it was in the previous assessment years. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the application of the provisions of Sec. 13(1)(c)/13(2)(c) r.w.s. 13(3) of the Act on account of following; a) To hold that the salary amount paid to Ms. Ruchira Gupta, the Managing Trustee of ₹ 36,00,000/- is unreasonable without appreciating that; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total receipt was applied for achieving the objectives of the trust. 6. On the facts and in the circumstances of the case and in law, without prejudice to the ground raised for invoking the provisions of Section 13, the Ld. CIT(A) has erred in confirming the rejection of the entire claim of exemption of the assessee u/s II merely because there is a violation of provisions of Sec. 13 of the Act for application of part of the income specified in said section. The assessment for impugned AY was framed by Ld. Income Tax Officer (Exemption)-1(1), Mumbai [AO] u/s 143(3) of the Income Tax Act, 1961 on 28/03/2015 wherein the income of the assessee has been assessed at ₹ 416.77 Lacs as against Nil returned income filed by the assessee on 27/09/2012 along with Income Expenditure Account, Balance Sheet and Audit Report in Form No. 10B . The assessee is assessed as Association of Person [Trust] and registered u/s 12A as well as registered with Charity Commissioner, Mumbai. In the present appeal, the assessee is primarily aggrieved by denial of exemption u/s 11 for alleged violation of certain provisions of Section 13. 2.1 The root of the issue before us lies in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere taken as ₹ 411.99 Lacs. 2.4 Finally, the assessee was denied exemption u/s 11. The figures of grants were taken as ₹ 411.99 Lacs against which the related / mandatory expenses were allowed. The income so computed in the aforesaid manner worked out to ₹ 416.77 Lacs, which was assessed in the hands of the assessee. 3. Aggrieved, the assessee contested the same without any success before Ld. CIT(A) vide impugned order dated 20/10/2016 wherein the matter was concluded in the following manner: - 5.2 I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the submissions of the appellant and also discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in under: i. The appellant stared that in preceding years department has accepted its return and hence AO should have been consistent and allowed exemption u/s. 11 in this year also. In this regard it is mentioned that, in the case of M.M. Ipoh Ors Vs CIT(SC) 67 ITR 106 Hon ble Apex court has observed that res judicata is not applicable as each assessment year is a separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat here salary would have been US$ 101563 had she accepted UN assignment. However, on perusal of the document filed it is noted that she has been offered a net annual salary of US$67909 only which converts to ₹ 40,74,540 approximately as on date. She is being paid salary more than this amount in India and that too by a charitable organization. As held by Hon'ble Allahabad High Court in the case of Chamber of Commerce Vs. CIT (1936) 4 ITR 397 element of 'altruism' must be present which stands violated in the present case by such a huge amount of salary paid to one of the trustees. iii. Further as mentioned by the AO there is no comparable increase in salary of any other trustee or any other member of the organization. Also, the appellant has not filed copy or any resolution of the governing body either during the course of assessment or appellate proceedings in which this much increase in the salary of one of the trustees was considered as reasonable. Nothing has been brought on record to justify the substantial increase in her salary with reference to any extra ordinary services rendered by her. Hence I agree with the Assessing Officer that the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has no force. viii. With reference to the balance and fixed assets written off it was stated that these amounts were not recovered and hence were written off. In this regard it is mentioned that as rightly stated by the AO these expenses are on capital account. Also such finances written off and fixed assets written off do not amount of application of Income. Contention of the appellant is therefore not acceptable. ix, in view of the facts and legal position as discussed above, I have no reason to deviate from the findings of the AO in the assessment order. Accordingly, Grounds of appeal No. 1 to 6 are dismissed. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Authorized Representative for Assessee [AR], drawing our attention to the documents placed in the paper-book contested the stand of lower authorities which has been controverted by Ld. Departmental Representative, Shri Rajesh Kumar Yadav. 5.1 We have carefully heard the rival contentions and perused relevant material on record including judicial pronouncements as cited before us. The prime contention of the assessee revolves around the rule of consistency . It has been submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat decision and the Court has made it clear that the decision should not be taken as an authority for general applicability. 8. However, subsequently the Apex Court in Bharat Sanchar Nigam Ltd. Vs. Union of India 282 ITR 273 has after referring to the decision of Radhasoami Satsang (supra) has observed as under : 20. The decisions cited have uniformly held that res judicata does not apply in matters pertaining to tax for different assessment years because res judicata applies to debar courts from entertaining issues on the same cause of action whereas the cause of action for each assessment year is distinct. The courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. The reason why courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es regularly since AY 2005-06 onwards. The details of salary being paid to her over several years could be tabulated in the following manner:- Assessment Year Salary Paid 2005-06 Rs.2.40 Lacs 2006-07 Rs.15.80 Lacs 2007-08 Rs.15.36 Lacs 2008-09 Rs.15.36 Lacs 2009-10 Rs.15.36 Lacs 2010-11 Rs.42.75 Lacs 2011-12 Rs.36 Lacs The perusal of the table reveal that the assessee is regular in making salary payments to the Trustee right from AY 2005-06 onwards, which has not been doubted by the revenue until impugned AY. It is also undisputed fact that the aforesaid Trustee was exclusively working for the Trust which is evident from copy of her Income Tax Return for the impugned AY as placed on record wherein we find that her major source of income is Salary income from the Assessee Trust. Needless to add that the aforesaid salary has dul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60,000/- per month stated to be paid by the assessee to use office premises of 325 Square Yards [2925 Square Feets] situated at D-56, Anand Niketan, New Delhi-21 . The said payment translates into rent of approx. ₹ 20/- per Square Feet per month against which the assessee has placed on record comparative rental rates of the area as prevailing therein at the relevant point of time the same are stated to be in the range of 45-107 per Square Feet. However, we find that the aforesaid payments are being made by the assessee pursuant to sub-lease agreement dated 01/04/2010 and the payment is in accordance with the terms of the agreement. The assessee has made the said payment in earlier AYs also, which has been accepted by the revenue. Keeping in view all these factors, we concur with the stand of Ld. AR that the same could not be a ground to deny the deduction of the assessee. 5.5 The above facts, discussion and observations lead us to an inevitable conclusion that the denial of deduction u/s 11 for alleged violations of Section 13 was not justified and therefore, we reverse the stand of Ld. first appellate authority, in this regard. The grounds raised in this regard, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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