TaxTMI 
TaxTMI 
2018 (1) TMI 1233
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.... establishing unreliability of the said document and for non-acceptance of the said document. 4. The Ld. CIT (A) ought to have appreciated that in face of full factual discussions made by the AO in the assessment, there was clear violation of Sec. 13(1)(c) of the Act on the part of the assessee thereby making ineligible for exemption u/s 11, following the said advance of Rs. 1,50,00,000/- given by the assessee to Yashaswi Infrastructures Pvt. Limited, a concern covered u/s.13(3) of the Act. 5. The Ld. CIT(A) erred in deleting the disallowances made by the AO u/s 40 (a)(ia) of the Act and for the capital expenditure in the assessment, when the assessee is not entitled for exemption u/s 11 of the Act. 6. The Ld. CIT(A) erred in deleting the addition made on account of under reporting of tuition fee in the assessment, when the addition was made on the basis of the number of students in the case of the society and the fee being charged from each student and the income reported under that head by the assessee society. 7. The Ld. CIT(A) erred in holding that there is no violation of sec. 13(1)(c) and the payments made to Sri T.V.Pranay Kumar, Treasurer....
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....rovisions of section 13(1)(c)(ii) of the Act was not attracted. 5. The AO did not accept the above contentions of the assessee for the following reasons: i) The construction agreement was not found during the course of survey nor was it produced during the assessment proceedings and therefore, agreement is not genuine. It was only produced for the first time before the Special Auditor, and therefore, this casts a doubt about the authenticity of the date of execution of the document. ii) The stamp paper on which the construction agreement was written was purchased on 26.09.2005, while the agreement was executed at a much later date i.e. 15.03.2008. iii) The agreement is notarized without any date and hence there is no evidence to indicate that the agreement was executed on 15.03.2008. iv) The terms of the agreement are totally in favour of the Contractor and does not give any details about the number of floors, the quality of material to be used for interior works of the school to be constructed and there was no mention of the date before which the construction should be completed. v) The assessee society did not have any permission fr....
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....ove, the assessee further listed out the "Legal & Professional Charges" totaling to Rs. 2,20,999 and therefore, held that if the payment made to Shri T.V. Pranay Kumar is towards fees for legal advice/professional charges, these payments were not reflected in Schedule 10. Since Shri T.V. Pranay Kumar was the Treasurer and Member of the assessee society, the AO was of the opinion that this payment attracts the provisions of section 13(1)(c) of the Act. In view of this violation, the AO held that the assessee is not entitled to the exemption u/s 11 of the Act. 9. Thereafter, the AO proceeded to consider the allowability of other expenses claimed by the assessee and found various expenses to be not allowable. One such expenditure is the payment made to various parties without making TDS. He therefore, made the disallowance u/s 40(a)(ia) and the consequential addition of Rs. 7,03,645 under this head. 10. Further, as per the income and expenditure a/c ending on 31.03.2008, he observed that the assessee declared "Term Tuition Fee" to the tune of Rs. 3,99,68,660. However, he found that there was a shortfall of Rs. 15.00 lakhs, found from the analysis of invoices, cash bank balances ....
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....business transaction i.e. for construction of a school building. The copy of the agreement is filed in the paper book filed before us and as rightly pointed out by the AO, the agreement does not speak of the approved plan or the number of floors or area to be constructed or the quality of material to be used etc. Therefore, it appears to be an agreement entered into to explain the purpose of the advance of Rs. 1,50,00,000. The CIT (A) has accepted the assessee's contention that the amount has been returned subsequently and also that M/s. Yashaswi Infrastructure Pvt. Ltd, has carried out the preliminary activities of levelling the land, removal of the boulders, etc. and that the said company has incurred certain expenditure which has not been returned to the assessee. But, in our opinion, the CIT (A) has failed to consider that the assessee has constructed the building by itself during the relevant previous year and also in the subsequent years. Therefore, we are in agreement with the findings of the AO that the assessee has not invoked the clauses of the agreement to cancel the contract, even though it had the knowledge that M/s. Yashaswi Infrastructure Pvt. Ltd was not fulfilling ....
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....the exemption u/s 11 of the Act for the relevant A.Y. The Revenue's grounds of appeal Nos. 2, 3 & 4 are therefore, rejected. 16. The other ground on the basis of which the exemption u/s 11 has been denied is the payment of salary to Shri T.V. Pranay Kumar. We find that before the CIT (A), the assessee had filed the proof that Mr. T.V. Pranay Kumar is registered as an Advocate and that he has rendered services to the Society in legal proceedings before the Hon'ble High Court of Andhra Pradesh and before the Civil Courts at Secunderabad. We find that the CIT (A) has also observed that the AO has not disputed the reasonableness of the payment to Mr.T.V. Pranay Kumar or that it was in pursuance of the objects of the Society Trust. In the absence of any evidence to the contrary, we do not see any reason to interfere with the order of the CIT (A). Ground No.7 is accordingly rejected. In this view of the matter, we hold that the assessee cannot be denied the exemption u/s 11 of the Act for the relevant A.Y. 17. As regards Ground No.5, it was submitted by the assessee before the CIT (A) that the assessee has not claimed such expenditure in its books of account but in fact has cap....