Park Trust vs. The Dy. Commissioner of Income Tax (Exemptions), Coimbatore

Parties Involved

Facts Summary

The assessee, Park Trust, is a charitable trust registered under Section 12AA of the Income-tax Act, 1961. The trust paid an annual salary of Rs. 25,20,000/- to its CEO, Mrs. R. Anusha, who is also a trustee and the daughter of the founder Managing Trustee, Dr. P.V. Ravi. The Assessing Officer found the salary excessive and deemed Rs. 17,70,000/- as excessive. The trust also paid interest of Rs. 1,40,95,279/- on sums advanced to other entities but did not charge interest from these entities. The Commissioner of Income Tax (Appeals) upheld these findings, leading to the appeal.…

Legal Issues

• 1. Disallowance of exemption under Section 11 of the Income-tax Act, 1961 due to excess salary paid to a trustee.
• 2. Disallowance of interest payment as not for the purpose of trust.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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