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2019 (9) TMI 901 - AT - Income TaxExemption u/s 11 - charitable activity u/s 2(15) - HELD THAT:- The activities of the Assessee are covered by last limb of Section 2(15) and are akin to the activities to Samudra Institute of Maritime Studies Trust [2014 (9) TMI 575 - BOMBAY HIGH COURT] . Not only that the notice for Cancellation u/s 12AA was dropped by the DIT(E) himself. We are therefore, of the opinion that the Ld. CIT(A) has correctly appreciated the facts and allowed this ground of appeal. We therefore, accordingly, uphold that activities undertaken by the Assessee satisfy the requirements of the term "education". Advance fee received from the students - HELD THAT:- On an overall consideration of this decision coupled with the contentions of consistency and tax neutrality, we find that the ld. CITA) rightly accepted the accounting method followed by the Assessee. However, due to revised calculation there was unspent amount. There was no requirement of filing the prescribed form as per the computation and consistent method. Therefore, we find that this observation of the ld. CIT(A) at para no 5.4.9 of the impugned Appellate Order is erroneous and deserved to be deleted. As regards ground no 4 we have separately decided the issue in the subsequent paragraphs. Accordingly, ground no 2 is allowed in favour of the Assessee and the Assessing Officer is directed to accept the method of accounting regularly adopted by the Assessee. Denial of exemption under section 11 by holding that advance given to the director for petty cash expenses was hit by the restrictions u/s 13(3) - HELD THAT:- Findings of the Assessing Officer and the ld. CIT(A) are not correct because the break up of the alleged amount of ₹ 11,57,000/- is as given above and does not partake the character of loans and advances to related parties. The first two amounts (₹ 20,000 + ₹ 10,22,000) pertained to another trust which is also registered with the DG Shipping and is a section 25 company and therefore, charitable and not hit by section 13(3) of the Act. The last amount of ₹ 1,15,000/- represented reimbursement to be recovered from the students towards counseling fees. None of the students are related to the Assessee under appeal. We therefore, find merits in the argument of the ld AR that the consequential exemption u/s 11 and 12 is erroneously rejected by the Assessing Officer and wrongly confirmed by the ld. CIT(A). We therefore, direct the Assessing Officer to allow exemption u/s 11 and 12 of the Act. Denial of exemption u/s 11 - donation and contribution - not deciding deduction u/s 80G - HELD THAT:- As carefully considered the rival submissions and perused the materials on records and find that since ground no 4 is already allowed with ground nos 1, 2 and 3, this ground of appeal is only consequential and therefore, allowed in the favour of Assessee. The Assessing Officer is directed to allow the exemption u/s 11 instead of deduction u/s 80G in respect of contribution Allow the cost of acquisition towards fixed assets u/s 11 as per law instead of only depreciation
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