The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the additional holding that the Assessing Officer (AO) could not interpolate the extra payment for every month to the entire 12 months for additional work done by guest teachers.
Assessee, Lahoria Education Society was running the Senior Secondary School named as ‘Lahoria Vidya Mandir Senior Secondar School’, Lahoria Chowk, Hissar. Since assessee was carrying out educational activity, therefore it was granted registration under section 12AA of the Income Tax Act.
The assessee claimed the sum amount as exempt under Section 11 of the Income Tax Act in the return filed on 19.10.2013. A survey was conducted and it was found that the assessee had maintained two separate records /sheets for salary payable to staff for the month of March, 2013 and there was a difference in salary paid through bank account and salary record maintained separately in the month of March, 2013.
The Assessing Officer held that assessee had not furnished the details of additional work done by the staff in support of its claim and it was held that salary payment through bank found was only a colourable device as actual salary was low payment of salary and separate salary was maintained for claiming higher salary expenditure. Accordingly,he proceeded to make the addition.
Naveen Gupta, on behalf of the assessee submitted that the assessee’s contention before the Assessing Officer was that these were part time teachers/guest teachers for which no separate salary register was maintained and amount had been paid for the month of March, 2013 to the 18 teachers for taking extra classes and for teaching weak students.
Maninder Kaur, appeared on behalf of the revenue.
The two-member Bench of G.S. Pannu, (President) and Amit Shukla, (Judicial Member) allowed the appeal filed by the assessee holding that if the payment had been made through cheque and the details of expenses were duly debited in the books of account, then we fail to understand as to how it was outside the books. The Assessing Officer had treated the difference between the salaries for the month of March for additional work done by the staff for the entire year which he had interpolated for the entire 12 months on presumption basis.
The Bench also held that it could not be inferred that payment of additional work was done for every month which AO had tried to interpolate for the entire 12 months.
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