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Showing contexts for: foreign trustee in Maharashtra Academy Of Engineering And ... vs Income-Tax Officer,, on 8 December, 2017Matching Fragments
& Education Research penalty. The said penalty levied by the Assessing Officer was confirmed by the CIT(A) against which the assessee is in appeal before us.
9. The Ld. Authorised Representative for the assessee pointed out that the income was assessed in the hands of the assessee because of the denial of deduction under section 10 (23C)(vi), 11 and 12 of the Act. However, the Tribunal has allowed the said deduction to the assessee except on certain facilities which were provided to the Trustee and on expenditure of Foreign tours of trustees and also further concessional educational expenses incurred on relatives of the trustees. The Ld. Authorised Representative for the assessee referring to the order of the Assessing Officer pointed out that the Assessing Officer had initiated the penalty only on the issue of denial of exemption under section 10(23C)(vi) of the Act though various additions were made in the hands of the assessee. He further referred to the said directions of the Assessing Officer where the Assessing Officer has failed to record a satisfaction as to which limb of section 271(1)(c) of the Act has not been fulfilled by the assessee.
A.Y. Description Amount Amount Income
originally enhanced and sustained by
assessed & penalty levied by ITAT
penalty levied by CIT(A)
AO
2001-02 1. Facilities to Shri B.E.
Avhad
Vehicle Maintenance (50% 21,850 - 10,925
disallowed
Depreciation on car (0% - - -
disallowed)
Credit Card Expenses 180,004 - 90,002
(50% disallowed)
Honorarium paid (50% - - -
disallowed)
2. Expenditure on Foreign 152,930 130,492 283,422
Tours of trustees
3. Concessional 92,400 62,320 154,720
Education to relative of
trustees
ITA Nos.968 to 971 & 973 to 974/PUN/2015 &
ITA Nos. 2018 to 2021 & 2023 to 2024/PUN/2012
Maharashtra Academy of Engg.
& Education Research
4. Other Income assessed 80,763,536
in view of denial of
exemption u/s.11 & 12
but deleted by ITAT
Assessed Income 81,120,720 192,812 539,069
Penalty levied on income 28,473,372 57,844
28,473,372
2002-03 1. Facilities to Shri B.E.
Avhad
Vehicle Maintenance (50% - 143,893 71,947
disallowed
Depreciation on car (0% - 171,388 -
disallowed)
Credit Card Expenses - 242,566 121,283
(50% disallowed)
Honorarium paid (50% - - -
disallowed)
2. Expenditure on Foreign - 24,700 24,700
Tours of trustees
3. Concessional - 88,680 88,680
Education to relative of
trustees
4. Other Income assessed 19,862,618
in view of denial of
exemption u/s.11 & 12
but deleted by ITAT
Assessed Income 19,862,618 671,227 306,610
Penalty levied on income 6,077,960 201,368
28,473,372
2006-07 1. Facilities to Shri B.E.
Avhad
Vehicle Maintenance (50% - 236,191 118,096
disallowed
Depreciation on car (50% - 280,057 140,029
disallowed)
Credit Card Expenses - 210,636 105,318
(50% disallowed)
Honorarium paid (50% - 180,000 90,000
disallowed)
2. Expenditure on Foreign - 1,057,333 1,057,333
Tours of trustees
3. Scholarship given to - 544,797 544,797
Shri Rahul Karad
4. Interest on loan given - 127,529 127,529
to Shri Rahul Karad
5. On money payment for 7,358,000 - 7,358,000
purchase of land
6. Other income assessed 178,023,290 - -
in view of denial of
exemption u/s.11 & 12,
but deleted by ITAT
Assessed Income 185,381,290 2,636,543 9,541,101
Penalty levied on income 59,223,057 806,782
28. In assessment years 2003-04, 2004-05 and 2007-08 the additions are similar to the additions made in assessment year 2002-03. The perusal of the above details in assessment year 2001-02 would reflect that in respect of ITA Nos.968 to 971 & 973 to 974/PUN/2015 & ITA Nos. 2018 to 2021 & 2023 to 2024/PUN/2012 Maharashtra Academy of Engg.
& Education Research expenditure on Foreign Tours of the trustees, the Assessing Officer made disallowance of Rs.1,52,930/-. The CIT(A) enhanced the same by Rs.1,30,492/- and the total disallowance which is sustained by the Tribunal is Rs.2,83,422/-. Similarly, in respect of the expenditure incurred on concessional education to relatives of the trustees, the AO made disallowance of Rs.92,400/- which was enhanced by the CIT(A) by Rs.62,320/- and the disallowance which was sustained by the Tribunal was at Rs.1,54,720/-. The relevant findings of the Tribunal (supra) are given at pages 155 to 157 of the order of the Tribunal dated 10.02.2017. The perusal of the same reflects that while deciding the issue of expenditure incurred on Foreign Tours of the trustees by Mr. Rahul V. Karad and Mr. V. D. Karad it was observed that the assessee in addition to the Plane tickets, purchased personal articles like Sunglasses, Perfumes and Shirts etc. and was unable to explain the source. The Tribunal (supra) noted that the daughter of Mr. V.D. Karad, Managing Trustee was staying in Australia and though the assessee claimed that such expenditure was on account of attending the World Peace tour, but no merit was found in the argument of the assessee and the expenditure of Rs.1,52,930/- for assessment year 2001-02 was held to be not for the objects of the trust. Similarly, the Foreign Travel expenses in other years were held to be not for the objects of the trust and the same were brought to tax by Tribunal (supra) vide Para No. 156 at page 113 of the order. The Tribunal further considered the claim of the assessee, vis-a-vis concessional education given to employees of Trust wherein it was held that the same was not covered by the provisions of section 13(1)(c) of the Act and hence the same were allowed in the hands of the assessee. However, in respect of the relatives of the trustees, as defined in Explanation to section 13, the Tribunal (supra) held that the same cannot be allowed as an expenditure in the hands of the assessee.
31. Once the disallowance has been upheld in the hands of the assessee trust on account of non-fulfilment of the provisions of the Act, the said disallowances may be concessional educational expenses or loan given to relatives of trustees and foreign travel expenses of trustees cannot be said to be mere adhoc disallowance of expenses in the hands of the assessee trust. Accordingly, we hold that there is no merit in the plea of the assessee in this regard. The assessee is liable to levy of penalty for concealment under section 271(1)(c) of the Act in respect of the enhancement of disallowance made by the CIT(A) in this regard.