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2016 (1) TMI 681 - AT - Income TaxReopening of assessment - claim of exemption under section 10(23C)(vi)denied - eligibility for approval from the prescribed authority - Held that:- Upholding the order of CIT(A), we hold that the assessee is not entitled to the aforesaid deduction under section 10(23C)(vi) of the Act, in the absence of a approval being granted by the prescribed authority. We also uphold the order of Assessing Officer in treating the assessee as AOP instead of an institution solely existing for imparting education. Denial of deduction under section 10(23C)(vi is the taxability of receipts after adjustment of expenditure in the hands of the assessee - Held that:- The Assessing Officer referred to the provisions of section 11(1)(d) of the Act, under which only those receipts were excluded from the scope of income, which were in the nature of voluntary contribution and that too with specific direction to form part of corpus. Since both these conditions were missing, the said receipts were held to be revenue receipts and not capital receipts as claimed by the assessee in its books of account. Accordingly, capital outlay contribution was treated as revenue receipts of the assessee.In view of the factual findings of the Assessing Officer in this regard and in the absence of approval being granted to the assessee under section 10(23C)(vi) of the Act, the capital outlay contribution is to be treated as revenue receipt in the hands of assessee, against which the deficit claimed by the assessee is to be adjusted. Whether in case the receipts are held to be taxable in its hands then, the benefit of set off of brought forward losses should be given to the assessee? - Held that:- The perusal of the details furnished by the assessee does not clarify the objection raised by the CIT(A) whether the said returns of income were filed in time as the requirement of law is that the loss shall be allowed only if the return of income is filed within due date prescribed under section 139(1) of the Act. The second objection of the CIT(A) was that it was not clear whether the assessee has claimed exemption under section 10(23C)(vi) of the Act in the respective years. In case the capital outlay has not been brought to tax and only the deficit has been assessed as loss, then where the assessee has claimed the said capital outlay to be exempt under section 10(23C)(vi) of the Act, the losses arising therefrom cannot be set off against the income of the present assessment years. The Assessing Officer is directed to carry out the necessary verification and decide the issue in line with our direction after affording reasonable opportunity of hearing to the assessee.
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