TaxTMI 
TaxTMI 
2019 (4) TMI 196
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....). 2. Both appeals relating to the same assessee on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience. However, in order to adjudicate the issues, reference is being made to the facts and issues in ITA No.2724/PUN/2017, relating to assessment year 2004-05. 3. The assessee in ITA No.2724/PUN/2017, relating to assessment year 2004-05 has raised the following grounds of appeal:- 1] The learned CIT(A) erred in holding that the appellant trust had violated the provisions of section 13(1)(c) by paying professional charges of Rs. 6,52,748/- paid to the trustees namely, Dr. Alimiya Parkar and Dr. Mumtaz Parkar. 2] The learned CIT(A) erred in holding that there ....
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....ons of section 13(1)(c). 7] The learned CIT(A) failed to appreciate that the utilization charges paid to the above two trustees were on account of the use of their assets by the appellant trust and therefore, there was no question of holding that the said payment resulted in violation of section 13(1)(c) as there was no undue benefit granted by the appellant trust to the above two trustees. 8] The learned CIT(A) failed to appreciate that there was no bar for the appellant trust to pay utilization charges to the trustees on account of use of the assets owned by them by the appellant trust and hence, the appellant had not violated the provisions of section 13(1)(c) on account of the above referred payment. 4. The issue ra....
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....s, it was explained that equipment and assets were owned by the trustees and which were utilized by the hospital, for which utilization fees was paid. The list of assets was also provided and it was pointed out that assets were not used by either of the trustees for their individual benefits. The Assessing Officer noted another professional fee paid of Rs. 6,52,748/- and in totality, the Assessing Officer did not agree with the submissions of assessee on the premise that the administrator of hospital do not have time in providing professional services. The Assessing Officer thus, held the assessee not to be entitled to the said exemption under sections 11 and 12 of the Act as there was violation of section 13(1)(c) of the Act and he disallo....
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....orized Representative for the assessee pointed out that utilization charges were also paid as per clause 7 of trust deed which is placed at page 91 of Paper Book. He pointed out that the said utilization charges were also allowable and strongly opposed the stand of authorities below in holding that there was violation of provisions of section 13(1)(c) of the Act, wherein nobody saw whether there was violation or not. Since the charges were paid within market value of the said facilities, there is no merit in the disallowance. 10. The learned Departmental Representative for the Revenue placed reliance on the orders of authorities below. 11. We have heard the rival contentions and perused the record. The assessee was running hospital fo....
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....f said professional fees paid to trustees. 12. Under section 13(1)(c) of the Act, it is provided that where any part of the income of trust enures or any part of such income or any property of the trust or the institution is, during the previous year, used or applied, directly or indirectly for the benefit of any persons referred to in sub-section (3), then such amounts are not to be allowed as deduction. The test to be applied is whether any part of income is directly or indirectly utilized for the benefit of any person referred to in sub-section (3). Admittedly, the provisions of said sub-section (3) are applicable but the issue which has to be seen is 'whether the said payment is directly or indirectly for the benefit of such person'.....