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2015 (12) TMI 695 - AT - Income TaxAddition on account of income siphoned out - benefit of section 10(23C)(iiiad) denied - CIT(A) deleted the addition - Held that:- As the society is definitely engaged in educational activity which is charitable u/s 2(15) of the Act and has maintained separate accounts in respect of each educational institution. The institutions of the society is entitled for claiming benefit of section 10(23C)(iiiad) of the Act being income of each educational institutions being less than ₹ 1 Crore, therefore, we observe that the AO has wrongly invoked the provisions of section 11 of the Act as the assessee society is running educational institutions which are exempt u/s 10(23C)(iiiad) of the Act. We also find that the assessee has fully explained the outflow of the amount of ₹ 17,00,000/- by requisite details/evidences from books of accounts which were produced before the AO also and clearly showed that the same has been invested in educational activities of charitable purposes which are exempt u/s 10(23C)(iiiad) of the Act. We observe that the AO just based his findings on the outflow without examining its ultimate use and its accounting done by the assessee. Further, we also find that the AO has not brought any adverse material evidence on record to conclusively hold that the amount of ₹ 17,00,000/- was utilized for other than educational /charitable purposes. Accordingly, we do not find any infirmity in the order of the ld. CIT (A) on this issued and the same is upheld. - Decided against revenue Addition on account of excess income over expenditure by allowing the exemption u/s 10(23C)(iiiad) - CIT(A) deleted the addition - Held that:- We have concurred with the ld. CIT (A) that the assessee’s income from educational institutions is exempt u/s 10(23C)(iiiad) of the Act. Thus, the conclusion of ld. CIT (A) that excess of income over expenditure in Sarti Devi Raja Ram Public School at ₹ 15,32,930/- and from Hindu Mahila Vidhyalya at ₹ 2,16,117/- is exempt u/s 10(23C)(iiiad) of the Act and thus, net surplus determined by the AO at ₹ 13,92,059/- has no basis, is correct and needs no interference. There is no merit in the contention of the revenue on this ground and so dismissed.- Decided against revenue Addition on account of membership fee received during the year as the assessee was not registered u/s 12AA - CIT(A) deleted the addition - Held that:- We find that the amount is the membership fees received by the society from its regular and new members which is meant for Corpus fund of the society. We further find that such receipts have been corroborated with documentary evidences and which had not been rebutted by the AO even in the remand report, so we uphold that the nature of the receipts as claimed by the assessee was acceptable and there was no reason to tax the same as donation in the hands of the society. We further find that membership fees have been credited directly to the Corpus Fund in the Balance Sheet and the amount cannot be taken as income of the Samiti in any case. Accordingly, we do not find any infirmity in the impugned order of the ld. CIT (A), so the ground is dismissed. - Decided against revenue Disallowance of depreciation - CIT(A) deleted the addition - Held that:- In the Balance Sheet of Shamli Samaj Kalyan Samiti, the addition to the fixed assets i.e. Building of the degree college is well proved and fully verifiable. AO has not brought any adverse material evidence on record to hold that depreciation @ 10% was required for disallowed. Before us also, the ld. DR has not brought any evidence to substantiate the addition made by the AO. Accordingly, we do not find any infirmity in the order of the ld. CIT (A) on this issue and the same is upheld - Decided against revenue
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