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1 - 10 of 26 (0.29 seconds)The Income Tax Act, 1961
Section 11 in The Income Tax Act, 1961 [Entire Act]
Acit(Exemption), Jaipur vs Mahima Shiksha Samiti, Jaipur on 3 March, 2017
"73. In our view, given the qualification and the experience of
these persons and the fact that these persons have managed the
affairs of the society since its inception and they are closely and
actively involve in management and day to affairs of the assessee
society, the salary and allowances paid to them is reasonable vis-a-
vis legitimate needs of the assessee society and benefit derived or
accruing to the assessee society. We do not see any justifiable
reason to disturb the decision which has been taken by the
management of the assessee society in terms of determining the
appropriate remuneration payable to these persons. The only
scenario where one can think of disturbing the said decision taken
by the management of the assessee society is where people
holding similar position and having similar experience and
qualification have been drawing lesser remuneration compared to
what has been paid to these persons by the assessee society. In
other words, the test of reasonableness can be invoked where
39 ITA 1361 & 1362/JP/2018 & 357/JP/2019_
DCIT(E) Vs M/s Modern School Society
there is contemporary data in terms of identifiable third-party
transactions in similar area of operation of education. In the instant
case, the revenue has not brought on record any such
contemporary data in terms of other educational institutions of
same scale-and size and having similar strength of student and
infrastructure wherein keep managerial person having been paid
lesser salary. Further the Courts have held from time to time that
the reasonableness of the expenditure is to be adjudged from the
point of view of an business man and not of the Revenue. In other
words, the reasonableness has to be seen vis-a-vis legitimate
needs of the assessee society and benefit derived or accruing to
the assessee society and as determined by the assessee society. It
is also noted that in the past consistently over the years, the matter
relating to reasonableness of the salary paid to the members of the
Bakshi family have been raised by the Revenue and the Coordinate
Benches have consistently held in favour of the assessee society
and have not seen any justifiable basis for such action on the part
of the revenue. For one of the years i.e. A.Y. 2009-10, the Revenue
has accepted the order of the Ld. CIT(A) upholding the salary paid
to these persons. In the entirety of the facts and circumstances of
the case, we are of the view that the salary paid to the members of
Bakshi family are commensurate with qualifications and experience
as well as area of their responsibility in terms of management and
day to day affairs of the assessee society and commensurate vis-a-
vis legitimate needs of the assessee society and benefit derived or
accruing to the assessee society. In the result, we do not see any
violation in terms of section 13 and the disallowance made by the
A.O. which has been deleted by the ld. CIT(A) is upheld.In the
result, ground No.3 of the Revenue is dismissed."