TaxTMI 
TaxTMI 
2018 (10) TMI 426
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....as it was in the previous assessment years. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the application of the provisions of Sec. 13(1)(c)/13(2)(c) r.w.s. 13(3) of the Act on account of following; a) To hold that the salary amount paid to Ms. Ruchira Gupta, the Managing Trustee of Rs. 36,00,000/- is unreasonable without appreciating that; i) She has worked with the United Nations in various capacities in 12 countries for over 10 years ii) She has been awarded for her achievements iii) She is working 24X7 all 365 days for trust's fund raising activity and for performing duties to advance the objects of the trust iv) The salary paid was at the same level or lower compared to her salary in preceding three years b) in considering the application of income for a new car purchased as a benefit accrued to the persons covered u/s 13(3) of the Act merely because the registration is done in the name of the trustee overlooking the fact that the car was entirely used for the purposes of the trust and it was purchased in her name to comply with the requirements of law in th....
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....ed by the assessee on 27/09/2012 along with Income & Expenditure Account, Balance Sheet and Audit Report in Form No. 10B. The assessee is assessed as Association of Person [Trust] and registered u/s 12A as well as registered with Charity Commissioner, Mumbai. In the present appeal, the assessee is primarily aggrieved by denial of exemption u/s 11 for alleged violation of certain provisions of Section 13. 2.1 The root of the issue before us lies in the fact that during assessment proceedings, it was noted that the assessee paid a salary of Rs. 36 Lacs to one of the Trustee namely Ruchira Gupta, which in the opinion of Ld. AO, violated the provisions of Section 13(1)(c) & 13(2)(c) of the Income Tax Act, 1961. The assessee, vide submissions dated 03/03/2015 & 20/03/2015 explained the nature of services being rendered by the aforesaid Trustee and justified the quantum of salary being paid to her. The Ld. AO after perusal of statutory provisions and past trend of salary payments concluded that the payment was excessive for which no reasonable justification could be adduced by the assessee. Another factor which led to denial of exemption was the fact that the assessee purchased a moto....
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.... and decided here in under: i. The appellant stared that in preceding years' department has accepted its return and hence AO should have been consistent and allowed exemption u/s. 11 in this year also. In this regard it is mentioned that, in the case of M.M. Ipoh & Ors Vs CIT(SC) 67 ITR 106 Hon'ble Apex court has observed that res judicata is not applicable as each assessment year is a separate proceeding. Similar observations were made by Hon'ble Supreme Court in the case of New Jehangir Vakil Mills Co Ltd Vs CIT(SC) 49 ITR 137, and Bharat Sanchar Nigam Ltd & Anr.Vs Union of India & Ors (SC) 282 ITR 273. Further in the case of CIT Vs Seshasayee Industries Ltd (Madras) 242 ITR 691, It was held by the Hon'ble Madras High Court that the fact that if claim was questioned in earlier years does not entitle the assessee to contend that the law would not be applied during the course of assessment year. Further it is noted that there is a legal issue involved regarding non-availability of exemption u/s. 11 on account of violation of provisions u/s. 13(1)(c) / 13(2)(c) r.w.s 13(3). It has been held by Hon'ble Courts that where legal issue arises, the principle of resjudicata does n....
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....verning body either during the course of assessment or appellate proceedings in which this much increase in the salary of one of the trustees was considered as reasonable. Nothing has been brought on record to justify the substantial increase in her salary with reference to any extra ordinary services rendered by her. Hence I agree with the Assessing Officer that the provisions of section 13(1)(c) and 13(2)(c) apply in case of the appellant; iv. Appellant stated that due to complicated procedure for registration of car in name of the trust, car was purchased in the name of the trustee Ms. Ruchira Gupta. In this regard it is mentioned that the car can be registered even in the name of the trust without any complication as claimed by the appellant. Thus the title of the asset being in the name of the trustee who is also using It and controlling it, I agree with the AO that there was a violation of provisions of section 13(1)(c) as held by Hon. ITAT, Hyderabad in case of Society for Poor and Oppressed 125 LTD 190. v. The appellant contended that rent paid to Mr. Vidyasagar Gupta father of Ms. Ruchira Gupta is quite reasonable. in this regard it is mentioned that the ....
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....book contested the stand of lower authorities which has been controverted by Ld. Departmental Representative, Shri Rajesh Kumar Yadav. 5.1 We have carefully heard the rival contentions and perused relevant material on record including judicial pronouncements as cited before us. The prime contention of the assessee revolves around the rule of consistency. It has been submitted that the assessee has been granted exemption u/s 11 since AY 2005-06 and the activities & manner of functioning including expenditure incurred by the assessee Trust are on similar pattern and the same has been accepted by the revenue over several years in scrutiny assessments u/s 143(3). The Ld. DR has controverted the same by submitting that the principle of res-judicata do not apply to Income Tax proceedings and each year is independent unit of assessment and therefore, the rule of consistency could not absolve the assessee to justify his claim in the impugned AY. Nevertheless, we find that the fact that the assessee has been granted exemption u/s 11 in earlier years and claimed expenditure on similar pattern remains un-rebutted. Nothing on record suggest that there was any change in the activities ....
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.... courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judicial can generally be permitted to take a different view. This mandate is subject only to the usual gateways of distinguishing the earlier decision of where the earlier decision is per incuriam. However, these are fetters only on a coordinate Bench which, failing the possibility of availing of either of these gateways, may yet differ with the view expressed and refer the matter to a Bench of superior strength or in some cases to a Bench of superior jurisdiction." (emphasis supplied) 9. The principle accepted by the Revenue for 10 earlier years and 4 subsequent years to the Assessment Years 2007-08 and 2008-09 was that the entire expenditure is to be allowed against business income and no expenditure is to be allocated to capital gains. Once this principle was accepted and consisten....
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....ary income from the Assessee Trust. Needless to add that the aforesaid salary has duly been reflected by her in Tax Return and due taxes have been paid thereupon. A brief profile of Ruchira Gupta as placed on record reveal that she is stated to have worked with United Nations in various capacities in 12 countries for over ten years. She was on the board of coalition against trafficking in women and the advisory councils of Polaris Project, Vital Voices, Ricky Martin Foundation, Asia Society, Nomi Network, the coalition against trafficking in women and cents for relief. The primary objective of the all these forums matches with some of the objectives of the Assessee Trust, which as per Trust Deed dated 17/06/2002 could be listed as follows:- (XIV) Combat the sex trafficking of women and children (XV) improving the well being an situation of women and children victims of sex trafficking Further. She is stated to be a part of steering committee for planning commission of the Government of India for the Eleventh & Twelfth Five year plans, once for women and once for Social Welfare, She was also on the working group of the Ministry of women and children and served o....
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....ate authority, in this regard. The grounds raised in this regard, stands allowed. Consequently, ground numbers-1 to 4 stands allowed whereas ground number-6 becomes infructuous. 6.1 In ground number-4, the assessee is aggrieved by certain amounts written-off in the books of accounts but not treated as application of Trust Income by the revenue. The assessee has written-off an amount of Rs. 1,71,313/- as donations receivable from the donors but remaining unrecoverable and therefore, written-off in the books of accounts. The assessee has submitted that the said donations were already been offered as Trust receipts in earlier years and therefore the non-recovery should be treated as application of income. Similarly, the assessee has written-off an amount of Rs. 43.02 Lacs on account of fixed assets which have been found to be non-usable upon physical inspection by management. The Ld. AR has submitted that neither the acquisition thereof nor the depreciation against the same has even been considered as application of funds. 6.2 Keeping in view the submissions made by Ld. AR, the claim of the assessee is, prima facie, allowable subject to the verification of the stated assertions ....