TaxTMI 
TaxTMI 
2017 (6) TMI 1363
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....re identical except for the assessment year and the amounts involved and therefore the submissions made by him while arguing one appeal would be equally applicable to the other appeal also and therefore, both the appeals can be heard together. The aforesaid submission of the Ld.D.R. has not been objected to by Ld.A.R. We therefore for the sake of convenience proceed to dispose of both the appeals by a consolidated order. However, we proceed with narrating the facts for assessment year 2010-11. 3. The facts as culled out from the material on record are as under: 3.1 Assessee is a Society registered under the Societies Registration Act, 1860. The assessee's Society is also registered u/s 12A of the Income Tax Act. The main objective and a....
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....g an Advertising Agency and three of the Trustees of the assessee namely Shri B. Paramanandhan, Shri B. Parandhaman and Smt. Thilangavathy were partners in Shri Balaji Creativities and had substantial interest in it. Thus according to AO, Shri Balaji Creativities was a person covered u/s 13(3)(e) of the Act. On perusing the details furnished by the assessee, AO noticed that assessee had incurred total advertising expenses of Rs. 3,98,76,888/- which included an amount of Rs. 2,35,42,934/- being paid to Shri Balaji Creativities (SBC). AO noticed that payment by assessee to SBC firm was around 70% of its total turnover. He also noticed that SBC had granted discount @ 10% to 12% to other clients whereas the discount granted to the assessee trus....
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....part of total expenditure has been diverted to the M/s. SBC and thereby the trustees have diverted the profit of the assessee trust for their personal benefits. He referred to See. 13(1)(c) of the Act and submits that it is not necessary that the benefit should be directly diverted but it can be by implication or by in direct way. He referred to assessment order and submits that the Assessing Officer has brought on record the data in respect of card rates of the advertisement and has established that even if the M/s. SBC has given the more discount to other parties but so far as the assessee is concerned less benefit are passed. He submits that there was no reasons for the assessee trust to root the advertisement expenditure through the M/s....
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....M/s. SBC has granted 2% discount on the bill of the assessee as compared to the 10% discount to the other client is totally erroneous and against the evidence before him. He argues that the intention behind giving the work to M/s. SBC is to get the advertisement published as M/s. SBC is a professional advertising agency which is not disputed. He argues that the assessee trust was given the more benefit by way of discount and not at 2% as misunderstood by the Assessing Officer. He submits that the observation of the Assessing Officer is that the M/s. SBC granted discount between 7.4% and 12% to all its client is factually wrong. He pointed out that in some corporate clients like M/s. Sandvik Asia, Dina Institute of Hotel Management discount ....
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.... clients, M/s. SBC has not given any discount and in the case of some of the clients, M/s. SBC has given the discount which is less than the average discount given to the assessee. It is true that out of total turnover of M/s. SBC the major contribution is of the assessee trust. The Bench also put the query to Ld. AR to explain why advertisement work was not directly given to the respective publishers of the Newspapers whereby the assessee trust could have got the better discount. The Ld. AR explained with the chart that as per the card rates of the different newspapers which are placed on record, the assessee is more benefited by giving the work to M/s. SBC. He isubmits that the entire designing and art work required for the advertisement ....
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....el of Tribunal too, the Assessing Officer is directed to grant exemption u/s. 11 of Income-tax Act and ground No.1 to 6 and 8 are treated as allowed. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us. 6. Before us. Ld.DR. took us through the various observations of AO and supported the order of AO. Ld.A.R. on the other hand, reiterated the submissions made before lower authorities and further submitted that identical issue arose in assessee's own case in Revenue appeal for A.Y. 2008-09 and the issue was decided by the Tribunal by dismissing the appeal of Revenue. He therefore submitted that following the same reasoning, the appeal of the Revenue be dismissed more so when there are no changes in the facts of the cas....