Tribunal upholds CIT(A)'s exemption decision under section 11, dismissing Revenue's appeal and assessee's cross objection.

The Tribunal confirmed the CIT(A)'s decision to grant exemption under section 11 to the assessee. The Revenue's grounds of appeal were dismissed for lacking merit. The cross objection filed by the assessee was deemed infructuous and dismissed. Both the Revenue's appeal and the cross objection of the assessee were dismissed.

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Issues involved: Appeal filed by Revenue against order of CIT(A)-IV, Hyderabad for assessment year 2006-07 regarding denial of exemption u/s. 11 based on payment of rent to President of Trust.

Revenue's Grounds of Appeal:
1. CIT(A) ignored society's double standards in showing different values to authorities.
2. CIT(A) failed to consider breach of certificate regarding payments to office bearers.
3. Assessing Officer found payment of rent to President in violation of section 13 provisions.

Assessing Officer's Observations:
- President received rent exceeding limit specified in section 13(3)(b).
- Notice issued to assessee to justify claim u/s. 11.
- Assessing Officer emphasized strict application of fiscal provisions.
- Payment of rent considered as benefit to interested person under section 13(1)(c).

Assessee's Arguments:
- Rent payment deemed reasonable by society, saving significant amount.
- Cited case law and CBDT circular to support reasonableness of rent.
- Contended that rent payment did not constitute diversion of income to interested person.

CIT(A)'s Decision:
- Directed Assessing Officer to grant exemption u/s. 11 based on rent payment being reasonable.
- Noted lack of evidence to refute value of rent as shown by Government valuer.
- Upheld assessee's argument that rent payment was not excessive or a benefit to interested person.

Judicial Precedents:
- CIT vs. 21st Society of Immaculate Conception (241 ITR 193) cited in support of reasonable rent payment.
- Tribunal's decision in Oasis Educational Society case favored assessee's position.

Conclusion:
- Tribunal confirmed CIT(A)'s order granting exemption u/s. 11 to assessee.
- Revenue's grounds dismissed as lacking merit.
- Cross Objection filed by assessee deemed infructuous and dismissed.
- Appeal of Revenue and CO of assessee both dismissed.

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