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2022 (10) TMI 275 - AT - Income TaxExemption u/s. 11 - Denial of exemption treating hall hiring charges and royalty as business income - non maintaining of separate ledger accounts - assessee submitted that the main object of the institution is education and during the year assessee has given the hall to the ceremonies etc., and earned Hall Hiring Charges and royalty from caterers, this income earned by the assessee is wholly applied for the purpose of education - HELD THAT:- We observe that the Trust is engaged mainly for imparting the education and the assessee has allowed the hall in the school/college to earn the additional income by way of Hall Hiring Charges and royalty from the caterers and ultimately this income was applied for imparting the education. We also observe that in section 11(1)(a) clearly indicates that income derived from property held under Trust for charitable purpose to the extent to which such income is applied to such purposes in India. It clearly indicates that the purpose of the assessee is for imparting education which is covered in the definition of charitable purpose and assessee has derived the income from the property. Therefore, the earning of income from the property on allowing others to use the hall and earn Hall Hiring Charges and other royalty income is nothing but income derived from the property and ultimately such income was applied for the charitable purpose. We also observe that Assessing Officer rejected the exemption with the observation that assessee has not maintained separate books of accounts, we observe that assessee is maintaining separate ledger for earning this income and also maintaining separate bill book for this purpose. This amounts to maintenance of separate Books of Accounts and the income is applied for the object of the Trust. Therefore, this will satisfy the maintenance of the separate Books of Accounts. As decided in case of Acharya Jiyalal Vasant Sangeet Niketan [2021 (4) TMI 113 - ITAT MUMBAI]. it is well understood that teaching of Indian Classical Music is within the field of “education”. The activities of the studio are carried on in order to achieve the main object of the Trust and cannot be construed as business. As mentioned earlier, since the trust is engaged in education, the proviso to section 2(15) does not apply as clarified by CBDT Circular No. 11 dated 19.12.2008. - Appeal of assessee allowed.
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