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2015 (1) TMI 1293 - HC - Income TaxExemption under Section 11 - assessee is receiving amounts in excess of the amount prescribed by the government by way of developmental fee - whether if the assessee recovers amounts in excess of what is prescribed in law, either under a statute or by way of notification, it amounts to a commercial activity and take the case out of Section 11 of the Act ? - Held that:- In the instant case, it is not in dispute, the assessee has collected money from the students belonging to the government quota, as prescribed by the government, in the notification. From the students belonging to the management quota, they have collected the fees prescribed by the government and in addition, they have also collected developmental charges. All these amounts received, are accounted for in their books of accounts. All these amounts are invested in the activities of the Trust. In fact they have taken loan to the extent of ₹ 3,01,75,330/-, as the amount received by way of developmental charges, is not sufficient for the activities of the Trust. The said loan is also raised to carry out the objects of the Trust. As pointed out by the Tribunal, there is not even an iota of evidence in regard to mal application of the funds. Merely because the assessee has collected huge amounts by way of developmental charges, the Trust does not cease to be a charitable Trust and the activities carried on by the Trust would not transform itself into a commercial activity. Therefore the Tribunal was justified in upholding the order of the First Appellate Authority and dismissing the appeal preferred by the Revenue. In that view of the matter, the substantial questions of law which are framed in these appeals, are answered in favour of the assessee and against the Revenue.
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