TMI Blog2018 (11) TMI 1864X X X X Extracts X X X X X X X X Extracts X X X X ..... een given as to why it is excessive or what is the basis of making the disallowance. No comparative case has been given to justify the disallowance. A disallowance based on a general comment is not called for. The action of the AO defies the logic. In view of these facts the disallowance u/s 13 made by the AO is hereby deleted. Addition on account of amounts paid to other partner NFOs - CIT(A) has deleted the addition - HELD THAT:- On this issue the law stands well settled that when a sum has been disbursed to another entity carrying out similar object and registered u/s 12A of the Act then it is application of income for purpose of section 11 and 12 - Hon'ble Jurisdictional High Court in the case of J.K Charitable Trust [ 1991 (4) TMI 19 - ALLAHABAD HIGH COURT] held that Donation to another charitable trust out of contributions received by assessee trust is application of income for charitable purpose and such donation cannot be treated as income of assessee trust in year of contribution either under unamended as amended section 12 of the Act. The decision of Hon'ble Gujrat High Court in case of Nirmala Baku Bhai Foundation [ 1996 (7) TMI 100 - GUJARAT HIGH COURT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.95lac and ₹ 1.43 lac to ₹ 1.65lac respectively were paid. The Assessing Officer held that the salary paid to these employees was excessive and ₹ 20,000/-, ₹ 20,000/- and ₹ 10,000/- were disallowed out of salary paid to three persons u/s 13 of the Act. Total disallowance worked out to ₹ 50,000/-. 2.1 Salary of Ms Padmja Nair (Member) and Shri J. L Dwivedi (Member) amounting to ₹ 78,652/- and ₹ 17,500/- was disallowed as they were part time employees of the assessee. The total disallowance worked out to be ₹ 96,152/- u/s 13 of the Act. 2.2 The Assessing Officer further disallowed the claim of application of income/deduction of expenses to tune of ₹ 62,40,012/- paid to other partner NGO's who are registered u/s 12A of the Act and further addition of ₹ 6,17,903/- was made on account of Interest Income not shown by the assessee. The Assessing Officer noted that assessee has violated the provisions of section 13 of the Act so the benefit of exemption u/s 11 and 12 of the Act was denied. 2.3 Being aggrieved with the action of Assessing Officer the assessee went in appeal before learned CIT(A) who has allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egic planning, implementation of projects and monitoring their outcomes. He also coordinates the Finance and Accounts functions. Salaries are fixed as per terms and conditions of service under specific scale (Category E-I) consisting of Basic Salary, DA (50% of basic), HRA, transport Allowance which is revised from time to time after performance appraisal. Either side may terminate the salary agreement by giving one month notice or pay in lieu of notice. Particulars of salary paid to these three persons over last 10 years was filed i.e. 2003-04 to 2012-13. The average increase in salary in 2012-13 as compared to 2011-12 is 15% approximately in all the three cases. After looking at their job description, their professional profile, their work experience and the inflationary pressures the increase in annual salary by 15% in the three key members of appellate society cannot be held as excessive or unreasonable. The AO has not outlined any basis on which he has come to a finding that this salary is excessive. Either the services rendered are not commensurate with the salary or the salary given is in excess of services rendered. No such finding has been given by the AO. To find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal report. Total payment made was ₹ 78,652/- inclusive of service tax (12%) and Education cess (3%). Dr. J.L Dwivedi was paid for specific task for designing and implementation of Agriculture based livelihood strengthening programme within the project in appellant society as well as partners location in Eastern UP and Northern Khar . Total payment made was ₹ 17,500/-. It is pertinent to point out that Mrs. Padmja Nair and Mr. J.L. Dwivedi are acclaimed independent professionals in the development sector specializing in rural development. The AO ignored the entire above stated gamut of facts before him and disallowed payment of ₹ 96,152/-to these two independent professionals based on a general comment that they are only part time employees and not full time employees. The AO ignored the that these two persons are consultants for specific projects and not even t time employees. Any disallowance based on a general comment by the AO is uncalled for. In view of the above mentioned facts the disallowance of ₹ 96,152/- is hereby deleted. Grounds of appeal No. 1 and 2 are allowed. 4.1 We find that learned CIT(A) has dealt with the issues exhaustively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of ₹ 62,40,6127- made by the AO is hereby deleted. The grounds of appeal No. 4 is allowed. 5.1 We find that learned CIT(A) while deciding the above ground has considered various judicial pronouncements and has exhaustively dealt with the issue which needs no interference from our side. Keeping in view the facts and circumstances of the case, we confirm the view of learned CIT(A) and dismiss the ground No. 3 taken by the Revenue. 6. Vide ground No. 4 of the appeal, the Revenue is aggrieved with the action of learned CIT(A) by which he has deleted the addition of ₹ 6,17,903/- made by the Assessing Officer on account of difference of interest on FDRs and saving bank account. The assessee has shown total interest income at ₹ 13,48,281/- as against interest of ₹ 19,66,184/- as per certificate issued by the bank. We find that learned CIT(A) has deleted the additions made by the Assessing Officer by holding as under: The Assessing Officer made addition on accrual of interest on FDR etc. to the extent of ₹ 6,17,903/-. The appellant is following the cash system of accounting and has shown interest income from FDR and saving bank account at & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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