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Before: SHRI J. SUDHAKAR REDDY & SMT SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JM
This appeal is filed against the order dated 02/02/3013 passed by CIT (A)-III, New Delhi, for Assessment Year 2010-11.
The grounds of appeal
are as follows: “1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 4,13,63,389/- on account of income shown in the profit and loss account after allowing exemption u/s 11, accepting assessee’s version that the society is not running for profit purposes.
2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.58,80,000/- made by the A.O on account of disallowance of salary paid relatives.
3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.14,74,677/- made by the A.O on a/c. of Income from License Fee. 3. The assessee society is in the business of running educational institute in the name of Accurate Institute of Management and Technology for providing education in the field of Engineering and Management. The assessee has been granted registration u/s. 12AA of the Income Tax Act, 1961 since inception and the said registration u/s. 12AA granted to the assessee is still continuing and has never been withdrawn. During the year the society has paid salary to Trustees mentioned in the assessment order. The Assessing Officer observed that the details of duties, responsibilities and the educational qualification were not furnished and there was no justification given regarding the payment of huge salary to the trustees and their relatives. The assessee replied to the Assessing Officer saying that the salary paid to the six persons was on the basis of their qualifications and contribution to the running of the institute. The Assessing Officer do not agree and thus made disallowance of Rs.58,80,000/-. The CIT (A) by relying on his order of the earlier assessment year 2007-08 allowed the appeal of the assessee. The relevant extracts are as follows:
“6.1 ….. Accordingly, relying on my order dated 26.02.2013 for assessment year 2007-08, I hold:
(a) that the appellant is entitled to exemption under Section 11 of the Act and therefore, the amount of Rs. 4,13,63,389 deserves to be deleted. (b) The AO is not right in disallowing the salary of Rs. 58,80,000/- paid to the trustees namely Ms. Poonam Sharma, Ms. Meera Sharma and Ms. Anupam Sharma.
7. In a result the appeal is allowed.”
The Ld. AR submitted that for the last four Assessment Years the disallowance was quashed by the ITAT in (Assessment Year 2006-07) dated 22/1/2013, ITA No. 2537/Del/2013 dated 29/8/2014, ITA No. 2538 & 2539/Del/2013 Assessment Year 2008-09 & 2009-10 dated 23/2/2016.
The Ld. DR could not refute the said orders which are in the favour of the assessee.
We have perused all the records and relevant materials and heard both the parties. This matter is covered by the earlier ITAT Orders mentioned hereinabove. The ITAT has held that the assessee is entitled to exemption u/s. 11 of the Act. The order of the Ld. CIT(A) dated 26.02.2013 for A.Y. 2007- 08 that the assessee has not violated S. 13(1)(c) r.w.s. 13(3) of the Act has attained finality. The A.O. has not invoked provision of S. 13(1)(c) for the A.Y. 2011-12, 2012-13 and 2013-14. No disallowance of salary was made. Thus, the Revenue appeal is dismissed.
In the result, the appeal of the Revenue is dismissed.
The order is pronounced in the open court on 20th of June, 2016.