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TMI Blog2017 (5) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... utive Director of assessee trust, the same is hit by the provisions of section 13(1)(c) of the Act and accordingly, the same is not to be allowed as deduction as the expenditure is incurred on related party as mentioned in section 13(3) of the Act. We have already held that the foreign travel expenses of wife of Executive Director are also to be disallowed. Similarly, expenditure incurred for Mrs. Vidya Joshi wife of Shri Prakash Joshi who was the head of Department being not for the purpose of business is also disallowed. Travelling expenses to Paris for attending UNESCO conference - Held that:- Where the invitation was from the Government to attend the conference of UNESCO, then the expenditure as is eligible to him merits to be allowed in the hands of assessee i.e. to the extent of 1,63,370/-. Further, the expenditure incurred on Mrs. Suchitra Nagare who is the employee as well as the Executive Director Incharge of Medical College also, merits to be allowed. The balance expenditure is to be disallowed in the hands of assessee being in violation of provisions of section 13(1)(c) r.w.s. 13(3) of the Act. Accordingly, we hold so. The Assessing Officer is directed to verify the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentical issues were heard together and are being disposed of by this consolidated order for the sake of convenience. However, reference is being made to the facts and issues in ITA No.2401/PUN/2012 to adjudicate the issue. 3. The assessee in ITA No.2401/PUN/2012 relating to assessment year 2008-09 has filed abridged grounds of appeal, which read as under:- 1. The learned Assessing Officer erred in assessing the total income of the Appellant at ₹ 24,57,86,566/- as against the returned Nil income and the learned CIT(A) erred in confirming such assessment. 2. The learned assessing Officer erred in holding that the Appellant was not entitled to exemption u/s. 10(23C)(vi) of the Act and the learned CIT(A) erred in confirming the same. 3. The learned Assessing Officer and the learned CIT(A) erred in holding that the Appellant is not entitled to deduction to deduction u/s. 11 of the Act. 4. The learned Assessing Officer and the learned CIT(A) erred in holding that the provisions of section 13 of the Act are violated. 5. The learned CIT(A) failed to appreciate that there are no violations of section 13 in the relevant year. 6. The learned CIT(A) erred in confirming the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration. The disallowance has been made on account of foreign travelling expenses by the Executive Director and other employees of the assessee trust and interest on loan to Mr. Rahul Karad. 10. Brief facts relating to the issue are that the assessee had incurred sum of ₹ 6,62,483/- on the visit of Dr. Vishwanath Karad, employee cum Director of MIT to Hanoi from 25.08.2007 to 01.09.2007 along with his wife Mrs. Usha Karad. The assessee explained that the visit was in connection with Robocon event which was held once every year in India and abroad in every second year to encourage students regarding manufacturing and operation of robots The Assessing Officer denied the claim as the assessee trust was not able to suitably demonstrate that the engineering course run by the institute had any component related to robots. Further, no justification for travel by Mrs. Karad and the capacity in which she travelled and expenditure incurred on stay and travel had not been elaborated. During the same financial year, Dr. Karad also visited Paris from 16.10.2007 to 20.10.2007 for UNESCO General Conference along with Mrs. Suchitra Nagare, who was an employee as well as Executive Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred on foreign travel of Managing Director and other employees. The assessee had booked two expenses i.e. one on account of travel to Honoi for Robocon event and the second on account of Paris for UNESCO conference. Vis-à-vis first expenditure for Robocon event, the Executive Director had visited along with other heads of departments and professors and students to attend an exhibition of Robotics. The said being in the line of business carried on by the assessee, the same is to be allowed as deduction in the hands of assessee i.e. the expenditure incurred on persons other than trustees or their relatives. In respect of expenditure incurred on the Executive Director of assessee trust, the same is hit by the provisions of section 13(1)(c) of the Act and accordingly, the same is not to be allowed as deduction as the expenditure is incurred on related party as mentioned in section 13(3) of the Act. We have already held that the foreign travel expenses of wife of Executive Director are also to be disallowed. Similarly, expenditure incurred for Mrs. Vidya Joshi wife of Shri Prakash Joshi who was the head of Department being not for the purpose of business is also disallowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is upheld. 16. Now, coming to another expenditure i.e. on account of World Peace Centre amounting to ₹ 3,93,585/-. The said expenditure has been held to be allowable by the Tribunal in assessment year 2003-04 on the ground that the objects of World Peace Centre were educational in nature and it was also held that mere non-intimating the change in trust deed would not result any disallowance of expenses incurred on the objects of the trust. It was also held by the Tribunal that the expenditure incurred abroad for WPC could not be held as not for the objects of the trust and that exemption under section 11 of the Act could not be denied. Following the same parity of reasoning, we hold that the expenditure incurred on World Peace Centre is deductible expenses. The ground of appeal No.7 raised by the assessee in this regard is thus, allowed. 17. Now, coming to last ground of appeal No.6 raised by the assessee i.e. against addition made by adopting recasted Income and Expenditure Account. The Assessing Officer held that the income of the assessee is to be assessed as AOP and consequently, the Income and Expenditure Account was recasted. According to the recasted Income and Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. In respect of other part of ground of appeal N.6 i.e. the assessee has no letters of donors against its claim of donations being corpus donations to the extent of ₹ 18,62,575/-. We hold that the said receipts are to be added in the hands of assessee. However, the assessee is not entitled to claim deduction under section 11 of the Act in respect of such donations. Hence, the ground of appeal No.6 is decided against the assessee. ? 23. Now, coming to the appeals in assessment years 2009-10 and 2010-11. 24. The learned Authorized Representative for the assessee pointed out that the issues raised in the said appeals are identical to the issues raised in assessment year 2008-09 except for ground of appeal No.8 raised in assessment year 2010-11. Following the same parity of reasoning, our decision in assessment year 2008-09 shall apply mutatis mutandis to assessment years 2009-10 and 2010-11, except for ground of appeal No.8 in assessment year 2010-11. 25. Now, coming to the last issue which is raised in assessment year 2010-11 by way of ground of appeal No.8 is against disallowance of provision made for gratuity amounting to ₹ 1,29,53,886/- under section 40A(7) (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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