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2018 (2) TMI 108 - AT - Income TaxDenying the exemption u/s 10(23C) - appellant was not existing only for education purpose - AO had come to conclusion that the appellant existed for only for profit motive as accorded to him, it derived profit of more than 26% - Held that:- Hon’ble Apex Court Visvesvaraya Technological University Vs. ACIT [2014 (2) TMI 658 - KARNATAKA HIGH COURT] so long as the surplus generated is not far in excess of what has been held to be reasonable i.e from 6 to 15%, the institution would not cease to be institution exists solely for education purpose and not for the purpose of profit. In the present case, after providing for the depreciation, the surplus would be around 18% of the gross receipts which is not far in excess of 15%. Therefore we hold that the appellant exist solely for the educational purpose and not for the purpose of profit, and therefore is entitled for exemption of its income under clause (vi) of section 10(23C). - Decided in favour of assessee Calculation of carry forward of income to subsequent years - Held that:- This issue is covered in favour of the assessee by the decision of the co-ordinate bench in the case of Jyothy Charitable Trust [2015 (11) TMI 1295 - ITAT BANGALORE]. Deduction of twenty-five per cent was held to be allowable not on total income as computed under the IT Act. Any amount or expenditure, which was application of income, is not to be considered for determining twenty five per cent to be accumulated.
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