TMI Blog2019 (1) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the decisions of the Tribunal as relied on by the ld. DR. Thus, the ground raised by the Revenue is allowed for statistical purposes. Violation committed by the assessee society by spending more than 50% towards administrative expenses - As in the case of Maddi Venataraman & CO. (P.) Ltd. v. CIT [1997 (12) TMI 3 - SUPREME COURT], wherein, as held that it is against the public policy to allow the benefit of deduction under one statute of any expenditure incurred in violation of the provisions of another statute. In view of the above decision of the Hon’ble Supreme Court, we find that the assessee has clearly violated the Foreign Contribution Regulations Rules, 2011 and thus, the ground raised by the Revenue is allowed. Rent paid by the assessee society to its accountant - Held that:- Since the owner of the building insisted the rent in cash, the Financial Controller of the Society drew a cheque in his own favour, encashed the same and paid the same to the building owner. Moreover, it was submitted that the said rent was not paid from the resources of the society. On perusal of the appellate order, we find that without asking any details from the assessee, the ld. CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was formed on 06.02.1978 and registration under section 12A(a) of the Income Tax Act, 1961 [ Act in short] was granted vide order dated 15.03.1989. The return of income was filed on 31.03.2013 showing NIL income after claiming exemption under section 11 of the Act. After considering the submissions and details furnished by the assessee, the assessment was completed under section 143(3) of the Act by holding that since the assessee was carrying out micro finance activity, which attracts provisions of section 2(15) of the Act as well as relying on the decision in the case of Socio Economic Development Society vs. ITO [2011-TIOL-754-ITAT-Mad] and Janalakshmi Social Services v. DIT (E) 33 SOT 197 (Bang), the Assessing Officer denied exemption under section 11 of the Act and assessed the total income of the assessee at ₹.4,54,54,087/- after making various disallowances. 3. The assessee carried the matter in appeal before the ld. CIT(A). After considering the submissions of the assessee on various issues, the ld. CIT(A) partly allowed the appeal of the assessee against which, both the assessee as well as Revenue are in appeal before the Tribunal. . 4. In its appeal, the Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, the Assessing Officer noticed that the assessee society provided services to the SHGs in the name of charity by collecting service charges and higher interest from them for managing its own expenses. Though the assessee claims that it was offering services to the poor, the Assessing Officer observed that no services were provided to the poorer on free of cost . Therefore, by invoking the provisions of section 2(15) r.w.s. 13(8) of the Act, the Assessing Officer denied the claim of exemption under section 11 of the Act. However, in the appellate order, the ld. CIT(A) has not given any findings as to whether the assessee is eligible to claim exemption under section 11 of the Act since the assessee was carrying out micro finance activity. Under the above facts and circumstances, we remit the issue to the file of the ld. CIT(A) for adjudication and passing detailed speaking order keeping in mind the decisions of the Tribunal as relied on by the ld. DR. Thus, the ground raised by the Revenue is allowed for statistical purposes. 6. The next ground raised by the Revenue is that the ld. CIT(A) has erred in holding that the violation committed by the assessee society by spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal building to be maintained as office does not arise at all. Notwithstanding this fact, the Assessing Officer held that the payment made to the accountant of the organization cannot be accepted as towards rent as claimed by the assessee. After considering the submissions of the assessee, the ld. CIT(A) sustained the addition. 7.1 We have considered the rival submissions. By referring to the written submissions as well as financial statement as duly agreed and signed for by the foreign counterpart, the assessee-society has made provision of ₹. 30,000/- for office rent and electricity charges. It was further submitted that in order to maintain separate records and personnel pertaining the foreign aided GIZ project, the assessee has opened separate office and paid rent of ₹.26,000/-. Since the owner of the building insisted the rent in cash, the Financial Controller of the Society drew a cheque in his own favour, encashed the same and paid the same to the building owner. Moreover, it was submitted that the said rent was not paid from the resources of the society. On perusal of the appellate order, we find that without asking any details from the assessee, the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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