Meaning of “Benefit”

Case Name : Muslim educational society v. Cit 

Citation : [2011] 46 sot 282 (uro)/12 taxmann.Com 127 (cochin)

Court : Cochin high court

Section : 80G

Meaning : The word ‘benefit’ used in section 80g(5)(iii) would extend to any preferential or correspondingly an unequal treatment accorded to the members drawn from a particular religious identity. As such, any such preference in its working would qualify it to fall within the purview of clause (iii) of section 80g(5). Not so reading would mean (for example) that even a minimal intake of (say) students (as, say, 2 per cent or 5 per cent) from other than the dominant group would enable it to claim of the institution being not, either expressly or practically, solely for the benefit of a particular religious community. If the legislature intended so, nothing prevented it to include the said words in the qualifying condition, which would operate to relax the rigour of the same. The benefit that is being extended or is possible to be extended, however, must be real and not imaginary or illusory. Any preference, say, by way of providing for a quota, management discretion, etc., Accorded to the members of the public drawn on the basis of religious affiliation, be it for employment as faculty/staff therein, admission to the students, grant of loans or scholarships for study, etc., Would amount to a benefit in terms of the qualifying provision.

Case Name : Helios food improvers (p.) Ltd. V. Dy. Cit 

Citation : [2007] 14 sot 546 (mum. – Trib.)

Court : Itat-mumbai

Section : 28

Meaning : The words ‘benefit’ or ‘perquisite’ have been used in section 28(iv), which have to be read together and would draw colour from each other. Normally, the term ‘perquisite’ denotes meeting out of an obligation of one person by another person either directly or indirectly or provision of some facility or amenity by one person to another person and from the very beginning, the person providing such facilities or concessions knows that whatever is being done is irretrievable to him as it has been granted to a person as a privilege or right of that person. In this view of the matter, the word “benefit” has also to be interpreted in the same manner i.E., At the time of execution of the business transaction, one party should give to the other party some irretrievable benefit or advantage.

Case Name : Cit v. Bharat sewa sansthan 

Citation : [2013] 36 taxmann.Com 539/217 taxman 337 (all.)

Court : Allahabad high court

Section : 13

Meaning : Allahabad high court in the case of cit v. Kamla town trust [2005] 279 itr 89/[2006] 150 taxman 107 has held that it has to be shown by the department that trust has provided land and building or other property of the trust for use of the persons of prohibited category for any period during the previous year without charging adequate rent or other compensation. Therefore, the term “benefit” would cover a case of one way flow of privilege and advantages to the persons of prohibited category, out of the funds, property or income of the trust.

Case Name : Dit v. Maruti center for excellence 

Citation : [2012] 21 taxmann.Com 474/208 taxman 236 (delhi)

Court : Delhi high court

Section : 13

Meaning : The term ‘benefit’ is important and shows that reasonable and fair payments made for the actual services rendered and provided by persons under section 13(3) will be and are allowed. Justified and reasonable payments and adequate compensation for services rendered, goods supplied, etc. Cannot be regarded as providing a ‘benefit’ to a person under section 13(3). The word ‘benefit’ need not be restricted to direct material benefit, but is of wide significance comprehending whatever would be beneficial in any respect, materially or otherwise. Benefit can be pecuniary or non-pecuniary.

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