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2019 (9) TMI 722 - AT - Income TaxExemption u/s 10(23C)(iiiad) denied - admitted gross receipts for the year under consideration breaches the limit provided U/s 10(23C)(iiiad) - exemption u/s 11 - charitable activity - arrangement made by the assessee with THEAL under which the assessee agree to receive the services from THEAL for providing facility in running the schools - HELD THAT:- Even as per the admitted gross receipts for the year under consideration breaches the limit provided U/s 10(23C)(iiiad) of the act and therefore, the said benefit of provisions of Section 10(23C)(iiiad) would not available to the assessee. Accordingly to that extent we set aside the order of the ld. CIT(A) and restore the order of the Assessing Officer for denying the claim of exemption U/s 10(23C)(iiiad) of the Act. Receipt from THEAL - Entire arrangement between the assessee society and THEAL is in the nature of joint venture for 30 years. The agreement in question is irrevocable as the parties to the agreement have no right to terminate the agreement accept fulfillment of terms and conditions. Arrangement between the parties and the activity carried out by the assessee are to earn the profit from the activity and then transfer the same in the ratio as per the agreement to the other parties. The other entities are undisputed existed solely for the commercial activity and for earning the profit and not invested in the assessee for any charitable purpose. Thus the sharing of the profit or income under the agreement and 80% of the income is going to the commercial entities clearly established the intention of the parties in this arrangements being for profit are not solely for providing education - there is no intention of generating any income to be applied for education purposes and to meet the requirement of future expenses, modernization or to provide latest facility or infrastructure to the student. The income generated from the activity of running the school is substantially going in the hand of the commercial entities under these agreements. Hence assessee is not existed solely for education purpose and consequently the benefit of Section 10(23C)(iiiad) of the Act is otherwise not available to the assessee - Decided in favour of revenue
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