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30-10-2019, Vikas Educational Society, Section 194I, Tribunal Visakhapatnam

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1 week 4 days ago #11277 by amit
Section - 194I, 40(a)(ia), 40A(2)
Order Date - 30-10.2019
Favouring - Assessee Partly
Court - Tribunal Visakhapatnam
Appellant - Vikas Educational Society
Respondent - ITO
Justice - V. DURGA RAO JM & D.S. SUNDER SINGH AM
Citation - 1119Taxpundit18
Appeal No. - I.T.A.No.385/Viz/2014 & I.T.A.No.386/Viz/2014
Asstt. Year - 2009-10, 2010-11

Order

PER : D.S.Sunder Singh

The assessee has filed appeals against the orders of the Commissioner of Income Tax (Appeals) [CIT(A)], Visakhapatnam in ITA Nos. 490/11-12/ITO, Wd.-3(2)/VSP/2013-14 and 387/13-14/ITO, Wd3(2)/VSP/2013-14 dated 28.03.2014 for the A.Y 2009-10 & 2010-11. Since the issues involved in these appeals are common, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under.

2. The facts of the case are extracted from the A.Y 2009-10 which are common for both the years except the disallowance of the rent u/s 40(ia) of the Act. The assessee has filed the return of income for the A.Y.2009-10 declaring total income of Rs.(-)6,547/- on 06.10.2009 The case was selected for scrutiny and the Assessing Officer (AO) completed the assessment on total income of Rs.8,33,70,977/- for the A.Y.2009-10. The AO made the following additions to the returned income for the A.Ys.2009- 10 and 2010-11 :

3. Aggrieved by the order of the AO, the assessee filed appeal before the CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee.

4. Against the order of the CIT(A), the assessee filed appeal before us and raised as many as 9 grounds for the A.Y.2009-10 which reads as under :

01. The Order passed by the A 0 is arbitrary and unjustifiable

02. The AO is not justified in making addition of Rs.600 lacs u/s 40a(ia) considering the payment made by the assessee as rent, in fact the payment made was towards infrastructure charges, do not come under Sec 40a(ia), also CIT(A) is not justified in confirming the addition ignoring the facts of the Case hence, liable to be deleted in the hands of the assessee.

03. The AO is not justified in invoking the provisions of Sec.40A(2), and making addition of Rs.200 lacs,, also CIT(A) is notjustified in confirming the addition ignoring the facts of the case hence, liable to be deleted in the hands of the assessee.

04. The Assessee is having huge number of students, faculty and other man power, engaged in the organization, keeping in view of this, expenditure incurred towards mess, was nominal, the AO is not justified in making an addition of Rs.2,35,870, also CIT(A) is not justified in confirming the addition of Rs.1,17,935, hence liable to be deleted in the hands of the assessee.

05. The assessee could explain, the nature, need, size of activity, extent of miscellaneous expenditure, the AO is not justified in making an addition of Rs.3,85,197, also CIT(A) is not justified in confirming the addition of Rs.1,92,599, hence, liable to be deleted in the hands of the assessee.

06. Expenditure incurred through directors credit card was explained in detail, need for the same, purpose of the same, the AO is not justified in making an addition of Rs.6,55,440, also CIT(A) is not justified in confirming the addition of Rs.3,93,264, hence liable to be deleted in the hands of the assessee.

07. Municipal tax paid to the GVMC of Rs.3,27,848 for this theassessee could submit a detailed resolution, explaining reasons thereof, the copy of which was attested by the AR of the assessee, with this plea, the AO is not justified in making an addition of Rs.3,27,848, also CIT(A) is not justified in confirming the addition, hence liable to be deleted in the hands of the assessee.

08. The AO is not justified in making an addition of Rs.88,473, under guest entertainment expenditure, also CIT(A) is not justified in confirming the addition of Rs.44,236, liable to be deleted in the hands of the assessee.

09. It was explained in detail that the usage of library books, nature of library books, also, submitted that they were not bound books / text books, hence eligible to be debited to profit & loss a/c, the AO is not justified in making an addition of Rs.6,53,533, also CIT(A) is not justified in confirming the addition, hence liable to be deleted in the hands of the assessee.

5. Ground No.1 is general in nature which does not require specific adjudication.

6. Ground No.2 for the A.Y.2009-10 is related to the addition of Rs.600.00 lakhs made u/s 40a(ia) of the Act. Brief facts of the case are that the assessee is running educational institutions at Visakhapatnam, Tirupathi and Hyderabad. The society is having its office at Asilmetta,

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