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TMI Blog2024 (6) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... ?. B. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that the assessee trust has made huge salary to the persons specified which are not justifiable as compared to the payments made to the other persons who rendered same services and are more qualified?. C Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) has justified in allowing the benefit of exemption u/s 11 of the IT Act, to the assessee ignoring the fact that the assessee has violated the provision of section 13(3) of the Act by making the payment to persons specified u/s 13(3)." 3. The solitary grievance of the Revenue, in the present appeal, is against the allowance of benefit of exemption u/s 11 of the Act to the assessee. 4. The brief facts of the case, as emanating from the record, are: The assessee is registered as a Charitable Trust with DIT(Exemption), Mumbai u/s 12A of the Act. Accordingly, the assessee claimed exemption u/s 11 of the Act and filed its return of income, for the year under consideration, on 31/10/2017 declaring a total income of Rs. Nil. The return filed by the assessee was selected for limited scrutiny to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A), vide impugned order, after taking into consideration the experience of the persons, their role in the institution and the services rendered by them, found the salaries paid to the specified persons as reasonable and deleted the disallowance made by the AO. Further, the learned CIT(A) also deleted the disallowance on account of rent paid by the assessee to the specified persons u/s 13(3) of the Act. Accordingly, the learned CIT(A) directed the AO to allow the exemption claimed by the assessee u/s 11 of the Act. Being aggrieved, the Revenue is in appeal before us. 7. During the hearing, the learned Authorised Representative ("learned AR") by reiterating the submissions made before the lower authorities submitted that the salary was paid to the specified persons u/s 13(3) of the Act after considering their education qualification, years of experience and their role in the institution. The learned AR further submitted that the rent paid by the assessee to the specified persons u/s 13(3) of the Act is duly supported by the Market Rental Report obtained by the assessee, while there is no basis in the figure of monthly rent of Rs. 60,000/- considered reasonable by the AO. By re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,16,954 6,00,000 5,16,954 5 Mr. Elton I. Gomes 8,05,716 4,80,000 3,25,716 6 Mr. Allwyn Gomes 8,93,468 4,80,000 4,13,468 Total 78,19,236 36,60,000 41,59,236 11. As per the assessee, Mr. Moses M Gomes is designated as Secretary, and is assigned the duty of Head-Clerk. The assessee further submitted that Mr. Moses M Gomes is having Educational Qualification of B.Sc. and having total experience of 29 years in the service. Accordingly, he was paid a salary of Rs. 14,93,022/- during the year under consideration. We find that the AO compared Mr. Moses M Gomes with other staff members who are simple graduates and found that their salary is less than Rs. 5 lakh for the year under consideration. Accordingly, the AO considered it fair and reasonable to allow monthly salary of Rs. 50,000/-, which comes to Rs. 6 lakh for the year under consideration, and disallowed the remaining amount of Rs. 8,93,022/- paid to Mr. Moses M Gomes. From the perusal of the details of members and other staff with their experience and educational qualification filed by the assessee, we find that Mr. Moses M Gomes is having the highest experience, i.e. 29 years in service, as compared to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Accountant, while Mrs. Tereasa Gomes is assigned the duty of Deputy Head Mistress with 21 years of experience. Accordingly, we find no infirmity in the findings of the learned CIT(A) in deleting the addition made by the AO in respect of salary paid to the aforesaid member. 14. As per the assessee, Ms. Savvy M. Mendonca is designated as Joint Treasurer and is assigned the duty of Supervisor (Asst. Manager). The assessee further submitted that Ms. Savvy M. Mendonca is having educational qualification of B.Sc., B.Ed., M.Ed., P.G.Dipl.M.E., P.G. Dipl. H.R.M. and having experience of 9 years in service. Accordingly, she was paid the salary of Rs. 11,16,954/- during the year under consideration. We find that the AO noted that the other members who have been assigned non-teaching duties like supervisor, head-clerk, Sr. Accountant, are being paid within the range of Rs. 5-6 lakh per year. Accordingly, the AO considered it fair and reasonable to allow monthly salary of Rs. 50,000/- which comes to Rs. 6 lakh for the year under consideration and disallowed the remaining amount of 5,16,954/- paid to Ms. Savvy M. Mendonca. From the perusal of the details of members and other staff with thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducational qualification. Accordingly, we find no infirmity in the findings of the learned CIT(A) in deleting the addition made by the AO in respect of salary paid to the aforesaid member. 17. We find that the learned CIT(A) deleted the disallowance of on account of rent paid to the specified persons u/s 13(3) of the Act was observing as under:- 5.2 As regards the disallowance of rent paid to the specified persons, the AO made an addition of Rs. 9,12,000/-. towards the rent paid in excess to persons specified u/s. 13(3) of the Act. The appellant submitted a valuation report which states computed rent as Rs. 14,80,024/- as against the rent expenses of Rs. 16,32,084/- shown as per the Income and Expenditure Statement and the difference „is around 10% which is stated to be reasonable. Hence, the appellant adopted certain method to arrive at its claim. However, the AO summarily rejected such claim and restricted the allowance only to Rs. 60,000/- per month without assigning any scientific methodology to arrive at such figure. It is further stated by the appellant that the respective amounts were admitted by the individual persons in their Income Tax Returns. In view of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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