DDIT (E), New Delhi V. M/s. Accurate Education & Research Society, Ghaziabad

ITA 5819/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7393 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 30-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: AMIT GOEL
• Section: 12AA; 11

Judgement Text

1 ITA NO. 5819/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEM BER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO. 5819/DEL/2013 (ASSESSM ENT YEAR-2010-11) DDIT (E) INV. CIRCLE-1 NEW DELHI (APPELLANT) VS ACCURATE EDUCATION & RESEARCH SOCIETY C-187, SURYA NAGAR GHAZIABAD AAAAA7866M (RESPONDENT) APPELLANT BY SH. K. K. JAISWAL, DR RESPONDENT BY SH. AMIT GOEL, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 02/02/ 3013 PASSED BY CIT (A)-III, NEW DELHI, FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,13,63,389/- ON ACCOUNT OF INCOME SHOWN IN THE PROFIT AND LOSS ACCO UNT AFTER ALLOWING EXEMPTION U/S 11, ACCEPTING ASSESSEES VER SION THAT THE SOCIETY IS NOT RUNNING FOR PROFIT PURPOSES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .58,80,000/- MADE BY THE A.O ON ACCOUNT OF DISALLOWANCE OF SALARY PAI D RELATIVES. DATE OF HEARING 02.06.2016 DATE OF PRONOUNCEMENT 20.06.2016 2 ITA NO. 5819/DEL/2013 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 14,74,677/- MADE BY THE A.O ON A/C. OF INCOME FROM LICENSE FEE. 3. THE ASSESSEE SOCIETY IS IN THE BUSINESS OF RUNNI NG EDUCATIONAL INSTITUTE IN THE NAME OF ACCURATE INSTITUTE OF MANAGEMENT AND TECHNOLOGY FOR PROVIDING EDUCATION IN THE FIELD OF ENGINEERING AND MANAGEMEN T. THE ASSESSEE HAS BEEN GRANTED REGISTRATION U/S. 12AA OF THE INCOME TAX AC T, 1961 SINCE INCEPTION AND THE SAID REGISTRATION U/S. 12AA GRANTED TO THE ASSE SSEE IS STILL CONTINUING AND HAS NEVER BEEN WITHDRAWN. DURING THE YEAR THE SOCIE TY HAS PAID SALARY TO TRUSTEES MENTIONED IN THE ASSESSMENT ORDER. THE AS SESSING OFFICER OBSERVED THAT THE DETAILS OF DUTIES, RESPONSIBILITIES AND TH E EDUCATIONAL QUALIFICATION WERE NOT FURNISHED AND THERE WAS NO JUSTIFICATION G IVEN REGARDING THE PAYMENT OF HUGE SALARY TO THE TRUSTEES AND THEIR RELATIVES. THE ASSESSEE REPLIED TO THE ASSESSING OFFICER SAYING THAT THE SALARY PAID TO TH E SIX PERSONS WAS ON THE BASIS OF THEIR QUALIFICATIONS AND CONTRIBUTION TO T HE RUNNING OF THE INSTITUTE. THE ASSESSING OFFICER DO NOT AGREE AND THUS MADE DI SALLOWANCE OF RS.58,80,000/-. THE CIT (A) BY RELYING ON HIS ORDE R OF THE EARLIER ASSESSMENT YEAR 2007-08 ALLOWED THE APPEAL OF THE ASSESSEE. TH E RELEVANT EXTRACTS ARE AS FOLLOWS: 6.1 .. ACCORDINGLY, RELYING ON MY ORDER DATED 26. 02.2013 FOR ASSESSMENT YEAR 2007-08, I HOLD: (A) THAT THE APPELLANT IS ENTITLED TO EXEMPTION UNDER S ECTION 11 OF THE ACT AND THEREFORE, THE AMOUNT OF RS. 4,13,63,389 DE SERVES TO BE DELETED. (B) THE AO IS NOT RIGHT IN DISALLOWING THE SALARY OF RS . 58,80,000/- PAID TO THE TRUSTEES NAMELY MS. POONAM SHARMA, MS. MEERA SHARMA AND MS. ANUPAM SHARMA. 7. IN A RESULT THE APPEAL IS ALLOWED. 3 ITA NO. 5819/DEL/2013 4. THE LD. AR SUBMITTED THAT FOR THE LAST FOUR ASSE SSMENT YEARS THE DISALLOWANCE WAS QUASHED BY THE ITAT IN ITA NO. 268 2/DEL/2012 (ASSESSMENT YEAR 2006-07) DATED 22/1/2013, ITA NO. 2537/DEL/201 3 DATED 29/8/2014, ITA NO. 2538 & 2539/DEL/2013 ASSESSMENT YEAR 2008-0 9 & 2009-10 DATED 23/2/2016. 5. THE LD. DR COULD NOT REFUTE THE SAID ORDERS WHIC H ARE IN THE FAVOUR OF THE ASSESSEE. 6. WE HAVE PERUSED ALL THE RECORDS AND RELEVANT MAT ERIALS AND HEARD BOTH THE PARTIES. THIS MATTER IS COVERED BY THE EARLIER ITAT ORDERS MENTIONED HEREINABOVE. THE ITAT HAS HELD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION U/S. 11 OF THE ACT. THE ORDER OF THE LD. CIT(A) DAT ED 26.02.2013 FOR A.Y. 2007- 08 THAT THE ASSESSEE HAS NOT VIOLATED S. 13(1)(C) R .W.S. 13(3) OF THE ACT HAS ATTAINED FINALITY. THE A.O. HAS NOT INVOKED PROVISI ON OF S. 13(1)(C) FOR THE A.Y. 2011-12, 2012-13 AND 2013-14. NO DISALLOWANCE OF SA LARY WAS MADE. THUS, THE REVENUE APPEAL IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 20TH OF JUNE, 2016. SD/- SD/- (J. SUDHAKAR REDDY) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 20/06/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4 ITA NO. 5819/DEL/2013 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 02/06/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 03/06/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 2 0 .06.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 0 .06.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.