ITAT partially allows appeal, remits matters for fresh consideration, and makes adjustments on disallowances and additions.

The ITAT partly allowed the appeal, setting aside disallowances and additions made by lower authorities. The matter was remitted to the AO for fresh consideration, providing the assessee with proper opportunities to present their case. The disallowance of honorarium expenses was remitted for insufficient time given, disallowance of salary paid to family members was deleted, depreciation disallowance was found unjustified, and surplus was held exempt but with an additional amount added due to lack of evidence for capital expenditure.

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Issues:
1. Sustenance of addition on account of honorarium.
2. Disallowance of salary paid to family members of the management of the society.
3. Disallowance of depreciation and interest.
4. Addition of surplus as income.

Issue 1: Sustenance of addition on account of honorarium:
The assessee claimed a deduction for honorarium expenses without providing complete details to the Assessing Officer. The AO made a disallowance of Rs. 7,82,465 due to incomplete information. The CIT(A) upheld the disallowance. The ITAT observed that the AO allowed insufficient time for providing necessary details. The matter was remitted back to the AO for fresh consideration after providing a reasonable opportunity to the assessee.

Issue 2: Disallowance of salary paid to family members of the management:
The AO disallowed Rs. 4,54,300 as salary paid to family members under section 13(3) read with section 13(2). The CIT(A) sustained the addition. However, the ITAT found that the payments made to family members were not excessive considering their roles in the society. The disallowance was ordered to be deleted.

Issue 3: Disallowance of depreciation and interest:
The AO disallowed depreciation on cars and interest on diverted funds to M/s Dev Packaging and a trustee. The CIT(A) upheld the disallowance of depreciation but reduced the interest disallowance. The ITAT found that the depreciation disallowance was unjustified as the cars were used for school purposes. The interest disallowance was also set aside, and the matter was remitted back to the AO for further examination.

Issue 4: Addition of surplus as income:
The AO treated surplus as income, but the CIT(A) held that the income was exempt under sections 11 and 12A. However, the CIT(A) added Rs. 2,04,757 due to lack of evidence for capital expenditure claimed by the assessee. The ITAT found that the CIT(A) did not provide an opportunity to the assessee before making the addition. The matter was remitted back to the AO for fresh consideration.

In conclusion, the ITAT partly allowed the appeal of the assessee, setting aside various disallowances and additions made by the lower authorities and remitting the matters back to the Assessing Officer for fresh consideration with proper opportunities for the assessee to present their case.

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