1.  ITO Vs. M/s Comero Leasing & Financial, I.T.A. No. 4281/Del/2010, Date of Order: 14/08/2014, ITAT - Delhi

No reopening of assessement by issuing notice U/s 148 Of the I.T. Act on the basis of information received from the Investigation Wing and without application of his mind.

Held Yes

AO reopened the assessment on the basis of information received from investigation wing  with regard to the accommodation entries taken by the assessee, the details of which are given in the reasons recorded which shows complete detail with regard to the entries. In replay Assessee pointed out that chart made for accommodation entry contain the same entry twice on five occasions and the AO accepted the same at the face value not even referred to the assessment record which is available with him. For these reason it look like that AO record reasons without any application of mind, as a result of that notice issued u/s 148 is bad in law.

Hon’ble ITAT held that the reasons recorded without any application of mind cannot be said to be a proper belief with regard to escapement of income. Thus, respectfully following the decision of Hon'ble Jurisdictional High Court in the case of Suren International P.Ltd. uphold the order of CIT (A) and dismiss the appeal filed by the Revenue.

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2.  PNR Society for Relief & Rehabilitation of the Disabled Trust Vs. DDIT, I.T.A. No. 2729/Ahd/2010, Date of Order: 14/08/2014, ITAT - Ahmedabad

Whether AO justified to disallow the claim of remuneration paid to a secretary of trust, who is also a trustee.

Held No

Assessee a charitable trust registered under section 12AA of Income-tax Act, 1961 in his return claim deduction of remuneration paid to a full time secretary, who is also a trustee of the assessee trust. AO disallow the remuneration on the ground that services rendered by secretary are duty of him as a trustee and same cannot be treated as application towards object of the trust. In replay to above assessee submit that similar remuneration was paid to trustee in earlier year and same was allowed by department. Assessee also submitted that secretary has vast experience of over 45 years in the field of social working and it is very useful for our trust.

Hon’ble ITAT held that revenue could not bring any material to controvert the submission of assessee that claim of remuneration was also allowed in earlier years and remuneration paid to secretary is about 1% of the value of activity of the trust, cannot be said to be excessive or unreasonable. In the result appeal of the assessee is allowed.

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