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2014 (6) TMI 357 - AT - Income TaxClaim of exemption u/s 11 of the Act –Educational institution – Held that:- Following The ADIT(Exemptions)-III Versus M/s Vasavi Academy of Education, Hyderabad [2010 (1) TMI 1094 - ITAT HYDERABAD] - if donations are received compulsorily for the admission of students, by whatever name it may be called, i.e. donation, building fund, auditorium fund, etc. over and above the prescribed fee, from the students, the assessee would not be entitled for exemption either under S.10(23C) or under S.11 of the Act – also in T.M.A. Pai Foundations and others Vs. State of Karnataka & Others [2002 (10) TMI 739 - SUPREME COURT] it has been held that the institution which are collecting capitation fees for admission of students over and above the fees prescribed cannot be construed as charitable/education institution - the fees collected over and above the prescribed fee for admission of the student has to be constructed as capitation fee - lower authorities have not examined the collection of capitation fee – thus, the matter is required to be remitted back to the AO for fresh adjudication – Decided in favour of Revenue. Claim of depreciation – Held that:- Following Jaipur Stock Exchange. Versus Assistant Commissioner Of Income-Tax [2006 (6) TMI 153 - ITAT JAIPUR-A] - depreciation on fixed assets is an allowable deduction, which is necessary to arrive at the income available for application to charitable purpose – thus, the matter is remitted back to the AO for fresh adjudication and he is directed to verify in respect of each asset on which depreciation claimed, whether the value of such asset was in fact allowed u/s 11, and if it was so allowed, the depreciation would not be allowed in respect of such asset – Decided in favour of Revenue. Disallowance of provision for doubtful debts – Held that:- No material is placed by either party regarding the nature of the claim of the assessee - If it is a Balance Sheet item as claimed by the assessee, there cannot be any disallowance on this count - The assessment year order also silent about this, as the addition has been simply made on this account without much discussion – thus, the AO is directed to make any addition, if it is only a Balance Sheet item relating to financial year 2002-03, relevant to AY 2003-04 – Decided in favour of Revenue.
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