TaxTMI 
TaxTMI 
2023 (2) TMI 200
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.... CIT(A) has confirmed the order of the DCIT, Circle-1 (Exemption), Chandigarh. As such order of the CIT(A) is liable to be cancelled as the same is bad in the eyes of law. 3. That the Ld. DCIT(E) has grossly erred in not allowing the exemption as claimed u/s. 11 and has further erred thereby taxing the surplus at Rs. 1,84,88,454/- by invoking the provisions of section 13(1)(c) r.w.s. 13(3) of the IT Act, 1961. Similarly the Ld. CIT(A) was not justified in confirming the same. 4. That the Ld. CIT(A) did not appreciate that the assessee society is a registered society engaged in educational activities and the society also enjoys the exemption u/s. 11 of the IT Act, 1961 inasmuch as the appellant society was registered u/s. 12A with the then CIT (Amritsar) vide No. CIT/ASR/HG/G-1/2017 dated 11/01/1995. As such the Ld. CIT(A) was not at all justified in confirming the order of the DCIT, Circle-1 (Exemptions), Chandigarh. 5. That the authorities below did not appreciate that the rent and security deposit was paid in accordance with the prevailing market rate and as such the DCIT(E) was not justified in invoking the provisions of section 13(1)(c) r.w.s. 13(3) a....
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....ns of section 13(1)(d) was that the interest free security deposit was given to the family trust along-with lease rent paid for land taken on lease for the family trust. On Page No. 89 of the paper-book, the comparative chart of the rent and security deposit has been provided and from the perusal of the chart, it is clear that the rent and security deposit paid are reasonable and consistent with the past history of the case. The necessary chart is given hereunder:- Asstt. Year Rent Paid Security/Debtors Total Remarks 2006-07 7,60,320/- 13,27,472/- 20,87,792/- Accepted 2007-08 8,80,620/- 7,37,768/- 16,18,388/- Accepted 2008-09 8,80,320/- 21,49,733/- 30,30,053/- Pending before ITAT 2009-10 7,60,320/- 25,61,733/- 33,22,053/- Pending before ITAT 2010-11 9,50,400/- 38,26,733/- 47,77,133/- Accepted u/s 143(3) 2011-12 9,50,400/- 29,74,253/- 39,24,653/- Accepted u/s 143(3) 2012-13 12,67,200/- 25,00,000/- 37,67,200/- Accepted u/s 143(1) 2013-14 14,57,280/- 25,00,000/- 39,57,280/- Under Appeal and addition of Rs. 1,84,88,454/- on a/c of surplus was made ....
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....lar circumstances, the Ld. CIT(A) accepted the appeal of the assessee in the case of M/s. Om Parkash Bansal Charitable Trust in connection with AY 2015-16 & 2016-17 in which the lease rent was paid to the family member of the trust and the same treatment was given by the AO and the provisions of section 11 and 13(1)(c) were invoked. Against the said order, the Ld. CIT(A) allowed these payments and against which the department went in appeal before the Hon'ble ITAT, Chandigarh Bench, Chandigarh and the Ld. ITAT, Chandigarh Bench accepted the appeal in favour of the assessee and dismissed the appeal of the department in ITA No. 339 & 340/Chd/2020, order dated 30/09/2021 in connection with AY 2015-16 and 2016-17. The relevant Para 14 & 14.1 on Page No. 182 & 183 is reproduced hereunder:- "14. We have gone through the order of the Ld. CIT(A). The factual findings of the Ld. CIT(A) that the ownership of Smt. Suman Bansal of the land leased to the assessee was established by documentary evidences, has not been controverted before us. Therefore, the findings of the AO that there was no evidence of ownership of land by Smt. Suman Bansal, merits no consideration. The findings o....
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....- "8. Disallowance of excess rent: On Perusal of the same it is also found that assessee is paying huge rent to M/s. Lala Daswandi Ram Family Trust against the land which is not reasonable. On perusal of the payments compared to last years it is seen that assessee is paying rent of Rs. 16,47,360/- which is Rs. 1,90,080/- higher than last year and 13.04% higher to last year, which is not reasonable u/s. 13(2) of I.T. Act. Actually market rate of increasing is 5% after one year and in this case it is 13.04% which is higher side. It is also seen that assessee has paid amount of Rs. 14,57,280/- in A.Y. 2013-14 and assessee has paid amount of Rs. 9,50,400/- in A.Y. 11-12. The increasing of rent from A.Y. 2011-12 to 2013-14 is very high which is not reasonable. As per market increase the reasonable rent calculation is as under:- A.Y. Rent Paid Increasing of 5% As per market Excess payments 2010-11 9,50,400/- - - - 2011-12 9,50,400/- 47,520/- 9,97,920/- - 2012-13 N.A. 49,896/- 10,47,816/- - 2013-14 14,57,280/- 52,390/- 11,00,206/- 3,57,074/- 2014-15 16,47,360/- 55,010/- 11,05,707....