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TMI Blog2022 (7) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... issions made on behalf of the appellant trust that the buildings owned by the specified persons is used by the appellant without payment of any rent remains uncontroverted by the Department. Therefore, it cannot be said that the specified persons had availed the benefit from the appellant trust without paying any compensations to the appellant trust. Furthermore, it is the submission of the appellant trust that the specified persons had been rendering the voluntarily professional services to the appellant trust also remains uncontroverted. Question that arises for consideration before us is, can it be said, that the appellant availed the operation rooms owned by the appellant trust are used by the assessee without any compensations, the answer is No , as the appellant trust could have saved the cost of running the trust on rent, salaries as there is no rent or fees or any other claim by the specified persons of the trust for utilization of the premises as well rendering the voluntarily profession services. Whether the specified persons had paid adequate consideration paid for occupation of bungalows owned by the appellant trust? - The submission made on behalf of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of his hospital building and assets therein. b. Doctors of Kulkarni family had never charged the trust the professional charges in treating and operating its patients. 4] The learned CIT(A) erred in rejecting the stand taken by the assessee that the trust had provided accommodation at a concessional rate to Kulkarni Family Doctors as their services as doctors were available to the trust even at odd hours for any emergency and thus, providing quarters to these doctors near the trust hospital was in the interest of the trust and thus, there was no violation of section 13 of the Act. 5] The learned CIT(A) was not justified in holding that financial benefits conferred on the trust by Dr. G. S. Kulkarni and his family members were not to be taken into account for judging the violation of section 13 by the trust in giving benefits to them by way of concession in the rental for the residential accommodation and also for allowing them to use some of the trust equipments without any charges. 6] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal. 3. Briefly, the facts of the case are as under : The appellant is a socie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, the appellant trust had denied that the patients of the trust were diverted to the individual practice of Dr. G. S. Kulkarni and his two sons. 5. As regards to the provisions of residential accommodation to Dr. G. S. Kulkarni and his two sons, it is submitted that Dr. G. S. Kulkarni and his two sons were rendering voluntary services to the appellant trust without charging any fees and the appellant trust are required to be available throughout the day, as the services are required around the clock, the accommodation is provided in vicinity of the appellant trust and hospital. Dr. G. S. Kulkarni and his two sons had paid rent of Rs.5,000/- per month and the municipal taxes, water charges and electricity bills was borne by the said persons in consideration of case of accommodation provided by the appellant trust. Thus, it was contended that no benefit had accrued to the trustees of the appellant trust thereby violating the provisions of section 13(1)(c) of the Act. However, the Assessing Officer rejecting all the contentions of the appellant held that the appellant trust had violated the provisions of section 13(1)(c) and denied the exemption u/s 11 and brought to tax the exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the provisions of section 13(1)(c) of the Act?. Admittedly, Dr. G. S. Kulkarni and his two sons (hereinafter referred as specified persons) used the operation rooms owned by the appellant trust for his private practice without paying any rent or fees for such use. Dr. G. S. Kulkarni and his two sons had occupied the accommodation that owned by the appellant trust for the residential purposes on payment of Rs.5,000/- per month for each bungalow. It is also admitted fact that Dr. G. S. Kulkarni had allowed 50% of the building owned by him for use of the appellant trust to pursue its charitable objects. Dr. G. S. Kulkarni and his two sons were rendering the voluntarily professional services to the appellant trust without charging any fees. The provisions of section 13(1)(c) reads as under :- 13. (1) Nothing contained in section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof- (c) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof- (i) if such trust or institution has been created or established after the commenceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r other compensation; (c) if any amount is paid by way of salary, allowance or otherwise during the previous year to any person referred to in sub-section (3) out of the resources of the trust or institution for services rendered by that person to such trust or institution and the amount so paid is in excess of what may be reasonably paid for such services; (d) if the services of the trust or institution are made available to any person referred to in sub-section (3) during the previous year without adequate remuneration or other compensation; (e) if any share, security or other property is purchased by or on behalf of the trust or institution from any person referred to in sub-section (3) during the previous year for consideration which is more than adequate; (f) if any share, security or other property is sold by or on behalf of the trust or institution to any person referred to in sub-section (3) during the previous year for consideration which is less than adequate; (g) if any income or property of the trust or institution is diverted during the previous year in favour of any person referred to in sub-section (3): Provided that this clause shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of any rent remains uncontroverted by the Department. Therefore, it cannot be said that the specified persons had availed the benefit from the appellant trust without paying any compensations to the appellant trust. Furthermore, it is the submission of the appellant trust that the specified persons had been rendering the voluntarily professional services to the appellant trust also remains uncontroverted. In the backdrop of this factual scenario, the question that arises for consideration before us is, can it be said, that the appellant availed the operation rooms owned by the appellant trust are used by the assessee without any compensations, the answer is No , as the appellant trust could have saved the cost of running the trust on rent, salaries as there is no rent or fees or any other claim by the specified persons of the trust for utilization of the premises as well rendering the voluntarily profession services. We are fortified in taking this view by the decisions of the Hon‟ble Madras High Court in the cases of Natya Sankalpaa vs. DIT, 378 ITR 654 (Mad.), CIT vs. 21st Society of Immaculate Conception (2000) 241 ITR 193 (Mad) and Hon‟ble High Court of All ..... X X X X Extracts X X X X X X X X Extracts X X X X
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