2019 (10) TMI 1545

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....nd circumstances of the case, the Ld. CIT(A) has erred in law in not considering the evidence/material available on record and facts of the case. 2.That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in not considering the fact that the agreement with the assessee was a method for diverting the receipts to M/s. G.D. Goenka Pvt. Ltd by paying 10% of receipt in the name of royalty. 3.That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in not considering the fact that conditions of agreement between the assessee and M/s. G.D. Goenka Pvt. Ltd clearly show that the agreement is business in nature and is a profit sharing agreement showing the profit motive of the parties with the asses....

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.....s. 2(15) of the Income tax Act. It was noted by the AO that the assessee Trust was imparting education on commercial principles and earning huge profits, generating large scale surplus and not being ploughed back into the stated objects of the Trust, diverting the receipts of the Trust to a private Ltd. Company in the name of business services provided by the company to the Trusts, paying huge amounts to M/S. G.D. Goenka Pvt. Ltd. under the head 'Royalty' by making a profit sharing agreement, paying lease rent to Smt. Suman Bansal, who was covered under specific person u/s 13(3) of the Act. The AO, therefore, issued show cause notice to the assessee society dated 9.12.2006 asking the assessee to explain as to why the claim of exemption....

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....ts and percentage of profit clearly revealed that the assessee was involved in commercial activity. He, therefore, denied the deduction to the assessee, claimed u/s 11 of the Income Tax Act, 1961.   4.Being aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the Ld. CIT(A). However, the Ld. CIT(A) relying upon the various case laws wherein it has been held that mere generation of sum surpluses was not a ground to deny the exemption, allowed the appeal of the assessee. The Revenue, thus, has come in appeal before us. 5.We have heard the rival contentions and have gone through the file. The Ld. Counsel for the assessee, at the outset, has submitted that the findings of the Assessing Officer that the as....