Income Tax Appellate Tribunal - Pune
Assistant Commissioner Of ... vs Lata Mangeshkar Medical Foundation,, ... on 23 June, 2017
आयकर अपील य अ धकरण] पण
ु े यायपीठ "ए" पण
ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
BEFORE MS. SUSHMA CHOWLA, JM AND
SHRI ANIL CHATURVEDI, AM
आयकर अपील सं
. / ITA No.712/PUN/2015
नधा रण वष / Assessment Year : 2010-11
The Asst. Commissioner of Income Tax, .......... अपीलाथ /
(Exemption) Circle, Pune.
Appellant
2nd Floor, B.O. Bhavan, Sector No.47,
Plot No.1, Pune Satara Road,
Pune - 411 009.
बनाम v/s
Lata Mangeshkar Medical Foundation, .......... यथ /
Deenanath Mangeshkar Hospital,
Respondent
S.No.8, 13+2 Erandwane,
Near Mhatre Bridge,
Pune - 411004.
PAN : AAATL1944N.
अपीलाथ क ओर से / Appellant by : Shri Mukhesh Jha
यथ क ओर से / Respondent by : Shri Nikhil Pathak
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing : 08.06.2017 Date of Pronouncement: 23.06.2017
आदे श / ORDER
PER ANIL CHATURVEDI, AM :
This appeal filed by the Revenue is emanating out of the order of Commissioner of Income Tax (A) - 10 Pune, dt.18.02.2015 for the assessment year 2010-11.
2. The relevant facts as culled out from the material on record are as under :-
2.1 Assessee is a Trust running a hospital under name and style of Deenanath Mangeshkar Hospital at Erandwan, Pune. Assessee 2 filed its return of income for A.Y. 2010-11 on 12.10.2010 declaring total income at Rs. Nil. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) of the Act vide order dt.22.03.2013 and the total income was determined at Rs.18,16,02,520/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide order dt.18.02.2015 in appeal No.(PN/CIT(A)-10/ITO, Wd.11(1)/859/13-14) granted substantial relief to the assessee. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us and has raised the following grounds :
1. Whether in the facts and in the circumstances of the case and in law the Ld.CIT(A) grossly erred in holding that the assessee is entitled to exemption under section 11 of the Income Tax Act, 1961 ?
.2 Whether in the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in failing to appreciate the voluminous data and evidences gathered and used by the Assessing Officer which would clearly establish that the assessee was running its hospital, canteen and other activities along commercial lines, and, therefore, could not be treated as pursuing charitable objects?
.3 Whether in the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in diluting the concept of charity beyond recognition and in not taking any note of the spirit underlying this concept of charity recognition and in not taking any note of the spirit underlying this concept as used in the Income Tax 1961 ?
4. Whether in the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in holding that the assessee cannot be considered to have violated the provisions of section 13 1)))(c) of the Act?
.5 Whether in the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in routinely dismissing the instances of violations of section 13(1)(c) brought out in the assessment order, particularly with regard to the unjustifiable payments made by the assessee to Mrs. Meena Kelkar and Mrs. Bharti Mangeskar?
3. All the grounds being inter-connected are considered together.
34. During the course of assessment proceedings and on perusing the Income and Expenditure account, AO noticed that assessee was running a canteen in hospital and from it had earned gross receipts of Rs.2.94 crores and had incurred expenditure of Rs.1.90 crores and thereby earned profit of Rs.1.04 crores which worked out to 35.43%. AO was of the view that the canteen was run with clear profit motive and running of canteen was not the objective of the assessee. He also noticed that assessee had made following payments :
(a) Rs.1,80,000/- to Smt. Meena Kelkar, mother of one of the Trustees. Dr. Shri Dhananjay Kelkar, as honorarium.
(b) Rs.4,56,000/- to Shri Sachin Kshirsagar, brother of another trustee Dr. Jitendra Kshirasagar, as salary,
(c) Rs.4,20,000/- and Rs.1,80,000/- to Mrs. Bharati Mangeshkar as honorarium and conveyance charges and
(d) Rs.1,35,000/- as salary / honorarium to Mrs. Swathi Kelkar, W/o. Dhananjay Kelkar.
AO was of the view that the aforesaid payments were hit by Sec.13(1)(c) of the Act. AO also noticed that during the year under consideration assessee had receipts from medical treatment to the tune of Rs.107.27 crores against which assessee had spent only Rs.65,87,635/- on Indigent and Weaker Section Patients whereas as per the policy framed by the Bombay High Court, assessee was required to spent 2% of the medical receipts and thus there was a shortfall of Rs.1,48,67,880/- in the amount required to be spent on Indigent and Weaker Section Patients. The assessee was therefore asked to show cause as to why the assessee not be denied exemption u/s 11 of the Act. The submission made by the 4 assessee was not found acceptable to AO. He thereafter concluded that assessee was running the hospital with the intention of making profit. He accordingly denied exemption u/s 11 of the Act and determined total income at Rs.18,16,02,520/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who decided the issue in favour of the assessee by holding as under :
"15. I have carefully considered the facts of the case as well as reply of the appellant. I find that the issue is covered in favour of the appellant vide appellate order for A.Ys.2008-09 and 2009-10. For the sake of clarity, operating para of CIT(A)'s order for A.Y. 2009-10 is reproduced as under :
"4.7. I have carefully considered the facts of the case and the law as are apparent from records. From the various objections raised by the Assessing Officer for denying exemption u/s 11 of Income Tax Act, in the assessment order, it can be seen that these can be broadly considered to be falling in two categories i.e.(a) objections saying that the activities of the appellant trust are not charitable in nature and (b) the objections saying that the appellant has violated sec. 13(1)(c) by making payments to Mrs. Meena Kelkar and Mrs. Bharati Mangeshkar. My learned precedecessor in his appellate order no. Pn/CIT(A)-IIAddl.CIT R- 11 Pn/282/10- 11 dated 30.03.2012 was examined the facts and issues of the case, for A. Y. 2008-09 which are identical to the facts and issues in the current appeal. He has analysed the judicial precedent in respect of "Charitable purpose" and vide paras 4.10.1 to 4.10.6 of his order come to a finding that the objections of the Assessing Officer which led her to deny the benefit of see. 11 to the appellant was not correct in law. For this reason, he had remanded the matter to the Assessing Officer and considered the remand report in upholding the claim of the appellant for the benefits u/s 11. Since the facts are absolutely identical for the impugned assessment year, relying upon the order of my predecessor, it is to be held that Grounds No.1 to 4.1 and 9 are allowed in favour of the appellant."
16. Since, facts being identical, I do not find any necessity to differ from the view taken in A.Y. 2008-09 & 2009-10. Accordingly. Following the appellate order of A.Y. 2008-09 & 2009-10, Grounds No.1 to 4 and 9 are allowed.
17. Ground No.7 and 8:
These grounds relate to the issues regarding violation of provisions of see. 13(1)(c) in respect of payments made to Mrs. Meena Kelkar and Bharati Mangeshkar. I find that the issue is covered in favour of the appellant in A.Y. 5 2008-09 & 2009-10. For the sake of clarity, relevant portion of the appellate order for A.Y. 2009-10 is reproduced as under:
"This issue has been dealt with by my predecessor in paras 4.11.1 to 4.11.6 of the order for A. Y. 2008-09 (supra) and are not been repeated for the sake of brevity. For the reasons discussed in. the appellate order for the A. Y. 2008-09, Grounds No. 7 and 8 are allowed in favour of the appellant. Thus, ground No.7 & 8 are allowed."
Since, facts being identical, following the appellate order for A.Y. 2008-09 & 2009-10, both the grounds are allowed."
Aggrieved by the order of Ld.CIT(A) Revenue is now in appeal before us.
5. Before us, ld. D.R. took us through the various observations of AO and supported the order of AO. On the other hand, Ld.A.R. reiterated the submissions made before lower authorities and further submitted that identical issue arose in case of assessee in earlier years. He submitted that while allowing the appeal of the assessee for A.Y.2010-11, Ld.CIT(A) had followed the order of his Predecessor for A.Ys.2008-09 and 2009-10. Against the order of Ld.CIT(A) for A.Y. 2008-09 and 2009-10, Revenue had preferred appeals before Tribunal. The Co-ordinate Bench of the Tribunal upheld the order of Ld.CIT(A) by order dt.15.04.2016 in ITA No.2046/PN/2012 and ITA 761/PN/2003 for A.Ys.2008-09 and 2009-10 respectively. He placed on record the copy of the aforesaid order. He further submitted that the issue raised in the year under appeal being identical to that of earlier years, no interference to the order of Ld.CIT(A) is called for. He thus supported the order of Ld.CIT(A).
66. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of claim of deduction u/s 11 of the Act. We find that Ld.CIT(A) while deciding the issue in favour of the assessee had noted that the facts in the year under appeal are identical to that of A.Ys.2008-09 and 2009-10. He thereafter following the order of his Predecessor for A.Ys.2008-09 and 2009-10 had decided the issue in favour of the assessee. We find that against the order of Ld.CIT(A) for A.Y. 2008-09 and 2009-10, Revenue had preferred appeal before the Tribunal. The Co-ordinate Bench of the Tribunal vide order dated 15.04.2016 upheld the order of Ld.CIT(A) by holding as under :
48. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant is a Charitable Trust formed on 20-08-1988. The assessee trust has been registered u/s 12A of the Income Tax Act vide order dated 27-
12-1988 issued by the CIT, Pune, a copy of which has been placed at page 16 of the paper book. The assessee trust runs a hospital under the name and style of Deenanath Mangeshkar Hospital at Pune. The assessee trust filed its return of income claiming exemption u/s.11 of the I.T. Act. We find the AO denied the claim of exemption u/s 11 and determined the total income of the assessee at Rs.11,34,45,230/- on the following grounds :
1. The assessee trust has not furnished proper information to the Charity Commissioner and there is shortfall in making provision for IPF.
2. The assessee trust is running a hospital with an intention of making profit.
3. The assessee trust has generated huge surplus and is also not carrying out any Charitable activity.
4. The assessee is running a canteen in the hospital and has earned huge profit.
5. The assessee trust has organized musical nights which is not acceptable in hospital.
6. The assessee trust has issued donation receipts which are not voluntary donations but medical fees charged by the trust.7
7. The assessee trust has paid salary to Mrs. Bharti Mangeshkar (trustee) and Mrs. Meena Kelkar (mother of the trustee).
8. The assessee has received rent of Rs.2,88,100/- from various parties which includes Rs.1,80,000/- from Bharti Airtel.
49. We find the Ld.CIT(A) allowed the claim of the assessee by rejecting the various objections raised by the AO. We do not find any infirmity in the order of the CIT(A). We find the first objection of the AO for denying claim of exemption is due to incorrect information to Charity Commissioner and shortfall in making provision for Indigent Patient Fund (IPF) as per the guidelines issued by Charity Commissioner. As per the guidelines issued by the Charity Commissioner/, each hospital should make a provision of 2% of the hospital receipts for IPF. According to the AO, the actual receipt of the trust is Rs.72.31 crores as against Rs.21.09 crores disclosed to the Charity Commissioner. Therefore, the assessee should have credited an amount of Rs.1.44 crores to the IPF fund whereas it has credited Rs.66.06 lakhs only. Thus there is shortfall in making provision for the Indigent Patient Fund.
50. It is the submission of the Ld. Counsel for the assessee that there had been no proper clarification regarding the interpretation of the concept of 2% of patient's receipts. According to him, the computation of gross receipts was a debatable issue with Charity Commissioner for which the hospitals association of Pune had taken up the matter with the Charity Commissioner. It is also the submission of the Ld. Counsel for the assessee that the gross receipts of the assessee was only the hospital charges excluding the OPD fees, medicine charges, doctor fees etc. for which it has made the provision of 2% of the hospital receipts for IPF. After the visit of the Charity Commissioner, he directed to include the OPD fees only to the hospital charges and medicine charges and doctor fees were not considered for the purpose of making provision for indigent fund.
The assessee accordingly made provision for the balance amount on 31-05-2010 for the period from October 2006 to November 2009. We find force in the above submission of the Ld. Counsel for the assessee. We also find merit in the submission of the Ld. Counsel for the assessee that after the inspection of records by the Charity Commissioner, the assessee has made provision for the shortfall and the Charity Commissioner has neither cancelled the registration nor levied any penalty, therefore, this cannot be a ground for denying the exemption u/s.11 of the I.T. Act.
51. We find although the assessee in the instant case has clarified the above facts before the AO, however, it was not appreciated by him. We find the CIT(A) after properly appreciating the facts has given a finding that the shortfall computed by the Charity Commissioner was much less than the shortfall computed by the AO. Further, the shortfall in the creation of IPF was due to certain confusion regarding the amount to be provided for the said fund and the assessee has made provision for the shortfall in IPF. Under these circumstances, we find no infirmity in the order of CIT(A) on this issue. Therefore, this objection of the AO has no merit.
852. As regards the objection of the AO that the assessee trust has generated surplus and is not carrying any charitable activity is concerned, we find the allegation of the AO is also baseless. The income and expenditure account of the assessee trust has already been reproduced at para 32 of this order. If the capital expenditure is considered then the surplus in each year is less than 15% and in some cases there is deficit. We also find merit in the submission of the Ld. Counsel for the assessee that legislature has allowed accumulation upto 15% of the receipts. Further, the submission of the Ld. Counsel for the assessee that whatever surplus has been generated has been utilized for the purpose of the trust could not be controverted by the Ld. Departmental Representative.
53. We find the Hon'ble Supreme Court in the case of ACIT Vs. Surat Art Silk Cloth Manufacturers Association reported in 121 ITR 1 has held as under (head notes) :
"Charitable trust - Charitable purpose - Advancement of any other object of general utility not involving carrying on of any activity for profit - Where, the purpose of a trust or institution is relief of the poor, education or medical relief, the requirement of the definition of "charitable purpose" would be fully satisfied, even if an activity for profit is carried on in the course of the actual carrying out of the primary purpose of the trust or institution - It is the object of general public utility which must not involve the carrying on of any activity for profit and not its advancement or attainment - What is inhibited by these last ten words is the linking of activity for profit with the object of general public utility and not its linking with the accomplishment or carrying out of the object
- It is not necessary that the accomplishment of the object or the means to carry out the object should that the accomplishment of the object or the means to carry out the object should not involve an activity for profit - Where the predominant object of the activity is to carry out the charitable purpose and not to earn profit, it would not lose its character of a charitable purpose merely because some profit arises from the activity - Exclusionary clause does not require that the activity must be carried on in such a manner that it does not result in any profit."
54. We find the CBDT vide Circular No.14/2015 dated 17-08- 2015 has given clarification on certain issues related to grant of approval and claim of exemption u/s.10(23C)(vi) of the Act, 1961. In para 3 of the said circular it has been stated as under :
"A doubt has been raised whether generation of surplus out of gross receipts would necessary 'breach' the threshold condition that the educational institution should exist 'solely for educational purpose and not for the purpose of profit'. Perusal of prescribed provisions clearly reveal that mere generation of surplus cannot be a basis for rejection of application u/s.10(23C)(vi) on the ground that it amounts to an activity of the nature of profit making. In fact, the third proviso to the said clause clearly provides that accumulation of income is permissible subject to the manner prescribed therein provided such accumulation is to be applied "wholly and exclusively to the objects for which it is established".
Hence, it is clarified that mere generation of surplus by 9 educational institution from year to year cannot be a basis for rejection of application u/s.10(23C)(vi) if it is used for educational purposes unless the accumulation is contrary to the manner prescribed under law.
55. We find the Hon'ble Bombay High Court in the case of Vanita Vishram Trust (Supra) has held that surplus that may incidentally arise from the activities of the trust after meeting the expenses incurred for conducting educational activities would not disentitle the trust of the benefit of section 10(23C) of the Act. The Hon'ble Bombay High Court in the case of Tolani Education Society (Supra) has also taken similar view. It has been held in various decisions that mere generation of surplus year after year cannot be the reason for disallowing the claim of exemption u/s.11. Further, in the instant case, as mentioned earlier, the claim of exemption u/s.11 has been allowed by the AO from A.Yrs. 2002- 03 to 2007-08 in assessments completed u/s.143(3) of the Act. Under these circumstances, we do not find any reason as to why the exemption u/s.11 should be denied to the assessee merely because there is some surplus. Since the Ld.CIT(A) while dealing with this issue has given justifiable reasons and accepted the contention of the assessee, therefore, we do not find any infirmity on this issue.
56. The next objection of the AO is that the assessee is not engaged in charitable activity since the assessee has not provided services to the underprivileged class of the society. From the various details furnished by the assessee we find the assessee has given freeships to patients. Further, it is not mandatory that the assessee should provide medical services only to the poor people. As per the provisions of section 2(15) the term "charitable purpose" includes relief of the poor, education, medical relief and the advancement of any other object of general public utility. Relief to the poor is one of the purpose but there is no condition that education or medical services should be provided only to the poor. In our opinion, so long as the trust is engaged in medical activities it would fall within the definition of "charitable purpose" and the said trust can enjoy the benefit of exemption u/s.11.
57. We find the Mumbai Bench of the Tribunal in the case of Kaushalya Medical Foundation (Supra) has held that where a charitable trust runs a hospital and is claiming tax exemption, there is no requirement that medical aid should be provided only to the poor nor there is any requirement that some particular percentage of services should be rendered free. So long as it is not shown that the hospital was running with the object of earning profits, the trust cannot be denied exemption.
58. We find the Pune Bench of the Tribunal in the case of Noble Medical Foundation and Research Centre at para 23 of the order has observed as under :
"23. Another aspect of the denial of deduction under section 11 of the Act to the assessee was that the assessee had failed to provide concessional treatment to indigent / poor patients. Admittedly, this was the first year of operation of the hospital and the plea of the assessee was that it could not provide free medical relief to large numbers of indigent / poor patients. However, as per the data submitted before the 10 Assessing Officer, which is incorporated under para 9 at page 10 of the assessment order, such services to indigent / poor patients was numbering 808 was provided by the assessee trust and the total bill amount of concession given to the patients was Rs.14,49,969/- as against the billed amount received from other patients of Rs.3.22 crores. Under the Income-tax Act, there is no provision for providing a percentage of the concession to indigent / poor patients. But certain limits have been laid down otherwise. However, in the absence of any limit being provided in the Income-tax Act, violation, if any, of the said limit does not entitle the Revenue authorities to disallow the claim of exemption under section 11 of the Act to the assessee trust, which otherwise had carried out the activities as per its objects and hence, is entitled to the deduction under section 11 of the Act. Accordingly, the Assessing Officer is directed to allow the claim of assessee in this regard."
59. Since the CIT(A) while dealing with this issue has also given justifiable reasons, therefore, the same being in order we do not find any infirmity on this issue.
60. Another objection of the AO is that the assessee is running a canteen in the hospital which is not one of the objects of the trust and is not providing free meals even to the indigent patients and it is in the nature of business conducted by the assessee. According to him, the income from such business cannot be exempt unless it is in the course of the actual carrying out of the primary purpose of the trust. It is the submission of the Ld. Counsel for the assessee that the assessee is running a huge hospital and therefore canteen facility is required to be provided to the patients and their families. Thus, canteen is an essential part and a necessity. According to him, the rates charged for the food is very reasonable and much lesser than the standard rates which has been accepted by the CIT(A). He has also brought to our notice that the profit generated by the canteen is only Rs.18.95 lakhs as against Rs.78.81 lakhs computed by the AO. Further, the assessee has maintained separate books of account for the canteen activity. It is also his submission that even assuming that the canteen activity amounts to carrying out business, still in view of provisions of section 11(4A) the assessee can carry out a business so long as the business is incidental to the objects of the trust.
61. We find merit in the above argument of the Ld. Counsel for the assessee. The Hon'ble Supreme Court in the case of Tanthi Trust (Supra) has held that after the amendment to section 11(4A) a charitable trust can carry out a business so long as the business is incidental to the objects of the trust. It has further been held that business is incidental to the objects of the trust when the surplus generated from the business is utilized for the objects of the trust. The relevant observation of the Hon'ble Supreme Court at para 21 of the order read as under :
"20. We now address the third controversy, which relates to sub-section (4A) of section 11 as substituted with effect from April 1, 1992. The learned Solicitor-General submitted that while the substituted sub-section (4A) gave trusts and institutions a wider latitude than the earlier subsection (4A), it had still to be construed to mean that a trust or institution 11 would not get the benefit of section 11 unless the business it carried on was carried on in the course of the actual carrying out of a primary purpose of the trust or institution. Dr. Pal, on the other hand, submitted that the substituted sub-section (4A) was couched in wide language and a trust was entitled to the benefit of section 11 if it utilised the income of its business for the purposes of achieving its objects.
21. The substituted sub-section (4A) states that the income derived from a business held under trust wholly for charitable or religious purposes shall not be included in the total income of the previous year of the trust or institution if "the business is incidental to the attainment of 38 ITA No.2046/PN/2012 & 761/PN/2013 the objective of the trust or, as the case may be, institution" and separate books of account are maintained in respect of such business. Clearly, the scope of sub-section (4A) is more beneficial to a trust or institution than was the scope of sub-section (4A) as originally enacted. In fact, it seems to us that the substituted sub-section (4A) gives a trust or institution a greater benefit than was given by section 13(1)(bb). If the object of Parliament was to give trusts and institutions no more benefit than that given by section 13(1)(bb), the language of section 13(1)(bb) would have been employed in the substituted sub-
section (4A). As it stands, all that it requires for the business income of a trust or institution to be exempt is that the business should be incidental to the attainment of objectives of the trust or institution. A business whose income is utilised by the trust or the institution for the purposes of achieving the objectives of the trust or the institution is, surely, a business which is incidental to the attainment of the objectives of the trust. In any event, if there be any ambiguity in the language employed, the provision must be construed in a manner that benefits the assessee. The trust, therefore, is entitled to the benefit of section 11 for the assessment year 1992-93 and thereafter. It is, we should add, not in dispute that the income of its newspaper business has been employed to achieve its objectives of education and relief to the poor and that it has maintained separate books of account in respect thereof."
62. In view of the above decision and in view of the detailed reasoning given by the CIT(A) that denial of exemption u/s.11 by the AO on account of running of the canteen is not correct, we find no infirmity in his order holding that the assessee cannot be denied exemption u/s.11 of the Act for running a canteen and making profit out of it. So long as the surplus generated from the canteen is utilized for making relief, the exemption u/s.11 in our opinion cannot be denied unless it is brought on record that such surplus generated has not been utilized for charitable purposes or has been utilized for non charitable purposes. Since there is no such finding given by the AO, therefore, denial of exemption u/s.11 on account of running of the canteen is not justified.
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1265. As regards the objection of the AO that the assessee has violated the provisions of section 13(1)(c) of the Act by paying remuneration of Rs.90,000/- to Mrs. Meena Kelkar and Rs.6 lakhs to Mrs. Bharti Mangeshkar is concerened, we find such objection of the AO is also not correct. From the various details furnished by the assessee we find Mr. Meena Kelkar has been paid remuneration of Rs.90,000/-. She was earlier looking after house keeping department of Sanjeevan Hospital and thus was having enough experience. Further, she was appointed in place of Smt. Sarita Shelke who was looking after the house keeping activity and she was paid remuneration of Rs.16,000/- per month. The various evidences furnished by the assessee in the paper book show that Mr. Meena Kelkar was actually looking after the house keeping activity of the assessee trust. The trustee Dr. Dhananjay Kelkar had also filed an affidavit before the CIT(A) that the remark made by the AO was incorrect and he had not made any statement in the assessment proceedings as alleged by the AO.
66. Similarly in the case of Mrs. Bharti Mangeshkar she has been given remuneration of Rs.50,000/- per month for looking after the general administration of the hospital. The AO has brought on record the remuneration paid to one Mr. Bomi Bhote of Ruby Hall Clinic at Rs.1 lakhs per month who was also handling generation administration of the hospital. Thus, the remuneration paid to Mrs. Bharti Mangeshkar is much less than the remuneration paid to persons placed in similar circumstances. As regards the allegation of the AO that she was not regular in the hospital is concerned, we find from the submissions made by the assessee as well as the confirmations filed in the paper book that various persons were reporting to Mrs. Bharti Mangeshkar and they have confirmed that they used to discuss all the important matters relating to the hospital with Mrs. Bharti Mangeshkar. In our opinion, there is no violation of provisions of section 13(1)(c) of the Act in respect of payment made to the above persons who have rendered services to the assessee trust. Further, the payments made to the above persons are not excessive or unreasonable as mentioned earlier. It has been held in various decisions that in order to invoke provisions of section 13(1)(c) of the Act the onus is on the AO to prove that the payment made to the trustee or the relative is excessive or unreasonable. As mentioned earlier, the payment made to Mrs. Meena Kelkar and Mrs. Bharti Mangeshkar are not excessive or unreasonable. We, therefore, concur with the findings given by the Ld.CIT(A) on this issue. Accordingly, the objection of the AO on account of violation of section 13(1)(c) of the Act is not justified."
7. Before us, Revenue has not placed any material on record to demonstrate that aforesaid order of Tribunal dt.15.04.2016 passed in the case of assessee has been set-aside or over-ruled in any manner by the High Court. In view of the aforesaid facts and since the facts of the case for the year under appeal are identical to that of A.Y. 2008-09 and 2009-10, we find no reason to interfere 13 with the order of Ld.CIT(A) and thus, the grounds of the Revenue are dismissed.
8. In the result, the appeal of the Revenue is dismissed.
Order pronounced on 23rd day of June, 2017.
Sd/- Sd/-
(SUSHMA CHOWLA) (ANIL CHATURVEDI)
या यक सद!य / JUDICIAL MEMBER लेखा सद!य / ACCOUNTANT MEMBER
.
पुणे Pune; दनांक Dated : 23rd June, 2017.
Yamini
आदे श क# $ त&ल'प अ(े'षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. CIT(A)-II, Pune.
4. CIT-2, Pune.
5. #वभागीय &त&न'ध, आयकर अपील य अ'धकरण, "ए" / DR, ITAT, "A" Pune;
6. गाड. फाईल / Guard file.
आदे शानस ु ार/ BY ORDER,स // True Copy // // सहायक रिज34ार/ Assistant Registrar, आयकर अपील य अ'धकरण ,पुणे / ITAT, Pune.