9911796707
TMI Blog2017 (8) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... ution, filed its return of income for the A.Y.2011-12 on 30.09.2011 admitting total income of Rs.NIL. The case was taken up for scrutiny and assessment u/s 143(3) was completed by determining the total income of the appellant at Rs. 1,15,37,780/- by disallowing the exemption claimed u/s 11 of the Act for violation of provisions of Sec.13(2)(a) & 13(2)(d) of the Act for the following reasons. 2. Brief facts of the case are that the assessee, a Society running an educational institution, filed its return of income for the A.Y.2011-12 on 30.09.2011 admitting total income of Rs.NIL. The case was taken up for scrutiny and assessment u/s 143(3) was completed by determining the total income of the appellant at Rs. 1,15,37,780/- by disallowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of inspections, audits and verifications by Universities, Boards, government institutions and bankers. On such occasions, the members of society have to accompany the officers as a custom. Out of the 3236 meals paid to canteen such meals were only 73 which works out to 2.26% only. However, the AO rejected the assessee's explanation and held that the free meals were provided to specified persons without any compensation or consideration and hence, Section 13(2)(d) is attracted in assessee's case. 2.3. The assessing officer found that an amount of Rs. 300/- was paid to the Chairman towards advertisement for the purpose of wishes to AMC Chairman. Likewise, an amount of Rs. 1,000/- was paid for the purpose of advertisement in newsp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer, the assessee went on appeal before CIT(Appeals). The Ld.CIT(Appeals) allowed the appeal of the assessee. 4. With regard to the first issue of unsecured loans to Shri K.V.Ravi Kumar is concerned, the Ld.CIT(Appeals) observed that the amount was given to Chairman Shri K.V.Ravi Kumar for purchase of buses. The Chairman as per the resolution of the Society entered into an agreement for purchase of buses with Shri A.Mohana Chalapathi Rao on 13.10.2010. It was further observed by the CIT(Appeals) that Shri Ravi Kumar has made the payment of Rs. 4 lakhs to Shri A.Mohana Chalapathi Rao for purchase of buses with the balance amount of Rs. 3,15,056/- plus from his own sources. In fact Shri Ravi Kumar has paid Rs. 4,00,000/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see when the provisions of Sec.13(1)(c) r.w.s. 13(2)(a) of the Act are fully attracted in the case of the assessee society, as clearly established by the AO in the assessment order. 3. The Ld.CIT(A) ought to have appreciated the fact that the assessee has advanced interest free loan of Rs. 8,15,000/- to Sri K.V.Ravi Kumar, the founder trustee, and out of the same a sum of Rs. 3,15,056/- was outstanding as on 31.03.2011 as noted by the AO in the assessment, thereby establishing that provisions of Sec.13(1)(c) r.w.s. 13(2)(a) of the Act are applicable to the case of the assessee for the assessment year 2011-12. 4. The Ld.CIT(A) erred in law in directing to allow exemption u/s.11 of the Income Tax Act, 1961, when the provisions of Sec.13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld.CIT(A) has not called for the remand report. Therefore, the Ld.DR argued that the evidences produced by the assessee in the form of purchase agreement proceedings of the committee, tenders obtained for purchase of buses, payment of voucher constitute the additional evidence. Hence, the Ld.DR argued that the case should be remitted back to the file of the Assessing Officer to examine the genuineness and correctness of the documents produced before the Ld.CIT(Appeals). 5.2. On the other hand, the Ld. AR relied on the orders of the Ld.CIT(Appeals). 6. With regard to the second issue on violation of provisions of section 5.3. We have gone through the submissions of the both the parties and perused the material placed on record. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er back to the file of the Assessing Officer to decide the issue afresh on merits. 6. With regard to the second issue on violation of provisions of section 13(1)(c) and rejection of exemption u/s 11 of the I.T. Act is concerned, the Ld.CIT(Appeals) observed that the number of meals coupons utilized was 73 and the same were utilized for the purpose of providing food to officers and VIPs visiting the Society from various departments / organizations. It was also observed by the Ld.CIT(Appeals) that the Society is located in far away place, where there are no hotels etc. for supply of food. In such circumstances, the assessee has provided food to the officers and their guests visiting the society, signing the coupon on the rear side. The expla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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