9911796707
TMI Blog2012 (12) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts & in the circumstances of the case and in law, the assessee institution is not an association of persons and, therefore, the findings of the learned lower authorities that the assessee is AOP is wholly wrong and unlawful and, therefore, such findings be quashed. 3. That, on the facts & in the circumstances of the case and in law, the learned lower authorities erred that the society has given benefits to its members in the form of telephone expenses & traveling expenses and, therefore, the society is not eligible for exemption u/s.11 & 12 of the I.T. Act. Such findings of the learned lower authorities be quashed and it be held that the expenditure on telephone & travelling were for the purpose and the benefits of the society and there is no personal benefits of the members of the society is involved in such expenses. Thus it be held that there is no violation of section 13 and the assessee is fully eligible for exemption u/s.11 & 12 of the I.T. Act. 4. That, on the facts & in the circumstances of the case and in law, the disallowance of Rs. 6143 out of telephone expenses is wholly unjustified and unlawful and, therefore, be deleted. 5. That, on the facts & in the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorities have made the assessment in the status of "society" which status does not find place in section 2(31) of the Act. It was argued by the Ld.Counsel for the assessee that the assessee has filed its return of income only in the status of artificial juridical person (hereinafter referred to "AJP"). However, without giving any notice or reason for such change, the Assessing Officer has assessed the income in the status of society. As per the Ld.Counsel for the assessee, the assessment made in the status other than the status shown in the return is void ab initio. Accordingly, it was prayed that the assessment made by the Assessing Officer and confirmed by CIT(A) should be cancelled. He also placed on record orders of the coordinate Bench in the case of Chandravadani Mahila Shiksha Samiti, order dated 8.2.2012 wherein exactly similar issue was decided. 5. We have considered the rival submissions of the parties, gone through the orders of the authorities below and find from record that the assessee is a registered society with the Registrar of Societies. After verifying the genuineness of the activities of the society and satisfying about its objects, the registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Ministry of HRD, the Chairman and the Member of the institution have undertaken visit to these institutions for getting necessary clearances. Furthermore, these persons were required to attend the office of the counsel, therefore, visit to Delhi was a regular routine for this purpose. The Assessing Officer has disallowed the amount of daily allowance being paid during the period of travelling. We find that DA is paid on daily basis for the lodging and boarding expenses. In the present days in the metro cities even the room in budget hotel is available in the range of Rs. 2000-3000 per day normally plus meal and other expenses per day comes to nearly Rs. 500 and therefore, there is no benefit provided to Chairman as alleged. The other expenditure relates only to cost of air ticket and local conveyance. At many times to attend the meeting in time, expenditure on air ticket becomes necessary and therefore, the same were incurred. The payments of expenses are, therefore, for the services rendered by the persons for the purpose of the works of the institution. The payment of DA of Rs. 2500/- per day considering the cost of hotel and the food in city like Delhi could not be consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milarly, disallowance of traveling expenses was deleted by the Tri under similar facts and circumstances in the case of Vichar Bharti; Income-tax Act, 1961, No. 280/Ind/2011 order dated 7.5.2012. The disallowance on account of telephone expenses was held to be not justified by the Tribunal in the case of Chandramani Mahila Shiksha Samiti in Income-tax Act, 1961, Nos. 141 to 143 and 281/Ind/2011 order dated 8.2.2012. As the facts and circumstances during both the years, under consideration, are peri materia with the facts and circumstances discussed by the Tribunal in the aforementioned order, respectfully following the same and for the reasons given hereinabove, we do not find any justification on the part of the lower authorities for making any part disallowance out of telephone and traveling expenses in both the years and thereby declining the claim of exemption u/ss 11 and 12 of the Act. 12. On the plea that the assessee has violated the provisions of section 13(2)(c) and 13(1), the Assessing Officer declined the claim of the assessee for exemption u/ss 11 & 12 of the Act. Consequently, the application of income for acquisition of assets at Rs. 20,35,92,757/- was also declined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included in the total income of the person who is in receipt of such income. The Assessing Officer since held that sections 11 and 12 will not operate and, therefore, he has not taken into consideration the provisions of section 11(1)(d) and included the said amount in the assessed total income. As we have already held that the assessee's eligibility for benefit of sections 11 and 12 of the Act cannot be declined and the corpus donation is required to be excluded from the total income as per the provisions of section 11(1)(d) of the Act. Similar issue has been considered by the coordinate Bench in the case of Vichar Bharti Education Society; ITA Nos. 540 to 542/Ind/007 order dated 13.7.2010. As the facts and circumstances are in para materia, respectfully following the order of the coordinate Bench and for the reasons discussed hereinabove, we reverse the action of the lower authorities in declining the claim of corpus donation u/s 11(1)(d) of the Act. 18. Ground no. 9 with regard to not allowing TDS credit, was not pressed during the course of hearing. The same is, therefore, dismissed in limine as not pressed. 19. In the assessment year 2008-09 identical ground has been ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 11 and 12 shall not operate. 22. By the impugned order, the Commissioner of Income Tax (Appeals) confirmed the action of the Assessing Officer. 23. We have considered the rival submissions of the parties, gone through the orders of the authorities below and find from record that both the lower authorities have wrongly concluded that the assessee has given any advance to Shri K.L. Thakral, Chairman of the Society, therefore, violated the provisions of section 13(1)(d). The Assessing Officer has made addition of Rs.108420/- for the notional interest on the ground that the assessee has provided interest free loan to K.L. Thakral. He has also made an addition of Rs. 1126928 for the cessation of liability of K.L. Thakral. The finding of the Assessing Officer in para 5.3 are that the assessee society has given interest free loan of Rs. 903502 to K.L. Thakral and on this loan he made an addition of Rs. 108420/- for the notional interest. The Assessing Officer also held that since the interest free loan has provided, therefore, there is a violation of section 13(1)(d)(i) and hence the benefit of sections 11 & 12 will not be allowed. Further in para 7 of the order, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he repayment amount of Rs. 903502 of the said loan liability has been assumed by him as interest free loan to K.L. Thakral. Since no loan was given by the assessee society to K.L. Thakral, the findings of the Assessing Officer as to the applicability of section 13 are also wrong and, therefore, the assessee is eligible for the benefit of sections 11 and 12. 25. As the assessee is a registered society u/s 12A of the Act and there was no violation of section 13, we do not find any merit in the Assessing Officer's action for declining the claim of claim of application of income for the acquisition of fixed assets. As already discussed hereinabove while disposing of appeal for the assessment year 2007-08, we reverse the conclusion of the lower authorities in declining the deduction on account of cost of acquisition of fixed assets. 26. Similarly, the Assessing Officer's denial of statutory deduction u/s 11(1)(a) of the Act amounting to Rs.2,62,13,965/- on the ground of violation of section 13 was not justified in view of the observations made hereinabove in the assessment year 2007-08. As there was no violation of section 13, the assessee is eligible for deduction on account of appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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