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2017 (11) TMI 366 - AT - Income TaxDenial of exemption u/s 11 and 12 - Taxing surplus from Transportation and Games holding that the transportation activity, games activity and picnic are business activities - Educational activity - Held that:- The assessee has provided the facilities of the Transportation for the students and staff of the educational activity on chargeable basis which has generated surplus. It is not the case of the revenue that Assessee provides transportation facilities to other outsiders also by charging the fees. Admittedly such facilities is for the purposes of the students etc to whom education is imparted by the society. The claim of the assessing officer that merely because of the admission of the student in the school, he does not become entitle to avail the transport or games facility but has to pay some more fees towards them. We are of the opinion that for the students who are studying in the colleges if they want to avail such facilities then they are charged such fees, which is nothing but providing an additional facility to the students. Therefore it cannot be said that it is not incidental to the education. None of the instances were found by the ld AO or appellate Authorities where the student is not studying in the school and is providing transport or games facility. It is also not the case of the revenue that surplus generated by the assessee in transportation activity is not used for the educational activities. Further the provisions of section 11 (4A) does not apply in case the activity generating profit is incidental to the attainment of the objectives of the trust. In the present case it is not disputed that activities of the games and transportation is for the students of the society and hence both these activities are incidental to the main objects of the trust. Hence the lower authorities erroneously applied the above provisions and taxed the surplus as the separate income of the assessee denying benefit of section 11 and 12 of the act. Transportation activities and Games activity are incidental to the educational activity of the trust. See Queens‟s Educations Case [2015 (3) TMI 619 - SUPREME COURT ] - Decided in favour of assessee. Disallowance being payment of interest etc to provident fund authorities - Held that:- The assessee has paid interest to provident fund authorities for late payment of provident fund. Before us assessee could not establish that how this expenditure is incurred for the object of the trust. In fact, this expenditure is incurred for the violation made by the assessee of the provident fund laws in not depositing the dues of the assessee as well as of the employees in time. In view of this, the above amount cannot be considered as an application of the income and therefore no infirmity is found in the order of the lower authorities. Hence, ground of the appeal of the assessee is dismissed. Disallowance of depreciation - Held that:- Depreciation to be allowed on the assets, cost of which is already allowed @100% as application of the income. No double deduction. [2014 (11) TMI 733 - DELHI HIGH COURT]
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