AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1640
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....ive identical grounds in its appeals, however the cruxes of the issue are that (i) The Ld.CIT(A) has erred in confirming the order of the Ld.AO, who had held that the assessee is involved in business activity and not public charitable activities and thereby withdrew the benefit of Section 11 & 12 of the Act, by invoking the provisions of Section 13(8) of the Act. (ii) The Ld.CIT(A) has erred in upholding the order of the Ld.AO who had disallowed the expenses incurred by the assessee towards consultation charges in an arbitrary manner invoking the provisions of Section 13(2)(c) r.w.s. 40A(2) of the Act, without considering the fact that the appellant was making payment towards service received from various professionals, wh....
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....al fees from various concerns which indicated that they cannot contribute their entire time for the trust. Therefore the Ld.AO opined that the payments made to the trustees by the assessee towards consultation charges are not reasonable. (ii) The aforesaid amount claimed by the trustees as honorariums which the assessee is not entitled. (iii) The activity of lending money to SHGs cannot be regarded as an activity of 'Relief to the poor' because the interest rate charged by the assessee trust is higher than the rate of interest charged by the banks. (iv) Mere existence of the objects in the Trust Deed such as 'relief to the poor' is not sufficient to assess the real character of the Trust; but the actual perfo....
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....) reported in (2009) 33 SOT 197. With the above observation, the Ld.AO came to a conclusion that the micro-finance activity of the trust is clearly a business activity and not an activity for rendering relief to the poor and therefore withdrew the benefit of Section 11 & 12 to the assessee and also disallowed the expenditure towards consultation fees paid to consultants as it was opined to be in excess or rather unwanted. 5. On appeal, the Ld.CIT(A) concurred with the view of the Ld.AO by holding that one of the major activity of the appellant is micro-financing by obtaining loan from the bank and lending to SHGs at higher interest, therefore hit by the first proviso to Section 2(15) and Section 13(8) of the Act. 6. Before us the L....
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....TA No.075/Mds/2013, M/s. Tiruchirappalli Multipurporse Social Service Society vs. ACIT in ITA No.654/Mds.2013, DCIT vs. M/s. Society for Rural Improvement in ITA No.329/Coch/2014 and the order of Apex court in ACIT vs. Thanthi Trust etc., dated 31.01.2001. The Ld.AR also filed a paper book containing the details and proof of all the activities conducted by it running from 50 to 76 pages. The Ld.DR on the other hand relied on the orders of the Ld. Revenue Authorities and argued in support of the same. 7. We have heard the rival submissions and carefully perused the materials on record. From the facts of the case, it is apparent that the Revenue had withdrawn the benefit of Section 11 & 12 of the Act to the assessee only for the re....
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....e poor and downtrodden to earn their livelihood. This claim of the assessee is not negated by the Revenue in any of their findings which establishes the fact that the assessee trust is lending only to SHG's consisting of poor and downtrodden. Further it is apparent from the orders of the Ld.AO that for the assessment year 2011-12, the assessee Trust has earned interest income of Rs. 24,46,05,545/- and Rs. 14,40,12,032/- for the assessment year 2012-13. Even though the assessee had received such enormous interest income, the excess of income over expenditure for the assessment year 2011-12 and 2012-13 computed by the Ld.AO is only Rs. 21,22,319/- and Rs. 91,51,142/- respectively. Thus it is evident that most of the income earned by the ....