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2015 (8) TMI 367 - AT - Income TaxDisallowance of exemption under S.11 - receipt of capitation fee - According to AO the charitable activity/educational institution was used by the assessee as an apparatus for selling education, and therefore, the activity of assessee society had no element of charity - CIT(A) allowed claim - assessee in the present case is a society, which is duly registered under S.12A - Held that:- Having regard to all the facts and circumstances of the case and keeping in view the decision Sree Educational Society (2015 (2) TMI 571 - ITAT HYDERABAD) we find ourselves in agreement with the learned CIT(A) that the capitation fee having been received by Shri P.Lakshminarayana Reddy and not by the assessee society, the addition on account of capitation fee can be made only in the hands of Shri P.Lakshminarayana Reddy and not in the hands of the assessee society. We also agree with the learned CIT(A) that neither the assessee society nor any of its officer bearers, being beneficiary of the capitation fee collected, there was no violation of any of the provisions of S.11, S.12 or S.13 of the Act, making the assessee society disentitled to exemption under S.11. As held by the learned CIT(A), the addition made by the Assessing Officer to the total income of the assessee on account of capitation fee thus was not sustainable, and the assessee was entitled for exemption under S.11, as claimed by it in the return of income.- Decided in favour of assessee. Unaccounted expenditure allegedly incurred by the assessee society - CIT(A) deleted addition - Held that:- As noted by the learned CIT(A), the relevant vouchers were found and seized from the residence of Shri P.Lakshminarayana Reddy and since the additional income of ₹ 18 cores declared by him was sufficient to cover the amount of ₹ 10 lakhs reflected in the said voucher, there was no justifiable reason for the Assessing Officer to make the addition of ₹ 10 lakhs again in the hands of the assessee society. At the time of haring before us, the Learned Departmental Representative has not been able to raise any material contention to dispute the basis adopted by the learned CIT(A) for giving relief to the assessee on this issue. We therefore, find no justifiable reason to interfere with the impugned order of the learned CIT(A) on this issue and upholding the same, - Decided against revenue.
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