9911796707
TMI Blog2014 (4) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Rs. 22,034/-]. During the financial year 2003-04, the assessee had sold its land and bonds for Rs. 2.00 crores and Rs. 69,13,717/- respectively. Out of the sale proceeds, the assessee had invested Rs. 2.50 crores for the purpose of purchasing property from Prestige Estates Projects Private Limited. The assessee has claimed before the Assessing Officer that the annual receipt of the assessee during the financial year should be considered as Rs. 51,86,887/- being the annual and recurring income of the assessee. The sale proceeds of land and bonds which are capital receipts in nature are not recurring income and are once in a lifetime. Therefore, the assessee has submitted before the Assessing Officer that the sale proceeds of land and bonds will not amount to annual receipts and the same may be excluded while considering the annual receipts of the assessee organization for the purpose of 'monetary limits' prescribed in section 10(23C) (iiiad) of the Act and claimed exemption under the above section on the ground that the assessee is an educational institution and income of the assessee is an exempt income. In the assessment order, the Assessing Officer has observed that as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erature and culture. During the financial year 2003-04 the assessee was in receipt of Rs. 51,86,887/- by way of annual income (as shown in the I&E account), against which assessee expended a sum of Rs. 70,07,959/-(before considering the depreciation of Rs. 22,034) during the year. In addition, the assessee during the Financial Year 2003-04, also sold its land and bonds for Rs. 2,00,00,000/- and Rs.69,13,717/-, respectively. Out of the sale proceeds, the assessee invested Rs. 2.50 crores for the purpose of purchasing property (by way of advance) from Prestige Estates Projects Private Limited. Thus, the assessee claimed that the annual receipts of the assessee during the Financial Year should be considered at Rs.51,86,887/-, being the annual and recurring income of the assessee. The sale proceeds of lands and bonds which are capital receipts in nature, are not recurring income and are once in a lifetime. Hence, the assessee's contentions that the sale proceeds of lands and bonds will not amount to annual receipt are justified and hence, the same has to be excluded while considering the annual receipts of the assessee organization for the purpose of 'monetary limits' prescribed in cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Quran copies Rs.67,680/- The Assessing Officer also noted that the assessee during the F.Y. 2003-04 also received Rs.6, 730/- by way of donations 'Fatwa'. In addition, the Assessing Officer also noted that the dress code, requirement of 5 times prayer in the college, etc. are on the religious lines and hence, opined that the assessee is not pursuing the activities which are solely educational and hence, denied the benefit of exemption u/s.10(23C) of the Act. As mentioned earlier, the assessee is an educational institution and running college for Arabic language literature and culture. The Arabic culture and Islamic culture originated from the same place and civilization. Hence, study of Quran also forms part of the study of Arabic culture. Study of Quran or spread of Islamic religion or preachings is not the main activity of the assessee organization. Study of Quran is only a small part in the normal educational curriculum. Hence, it cannot be said that the assessee is indulging in religious activities. It is also importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee during the F.Y. 2003-04 for the purpose of determining the application of income u/s. 11(1) of the I.T. Act. The total income of the assessee, including capital receipts, and the application of income during the F.Y. 2003-04 are as under: Total revenue income during FY 2003-04, as per I&E a/c.: : Rs. 51,86,887 Add: (i) sale proceeds of the land : : Rs. 2,00,000,000 (ii) sale proceeds of the bonds : : Rs. 69,13,717 Total receipts during FY 2003-04 : : Rs. 3,21,00,604 85% thereof for application for objects in the FY 2003-04 : : Rs. 2,72,85,513 Actually applied in the FY 2003-04 : (a) Revenue Expenses Total expenses as per I&E account : : 70,29,993 Less: Depreciation not considered : : 22,034 Net revenue expenses : : 70,07,959 - (A) (b) Capital Expenses Additions to the fixed assets : : 68,977 Advance for purchase of property : : 2,50,00,000 Total capital expenses : : 2,50,68,977- (B) Total application of income during FY 2003-04 (i.e. A+B) Rs. 3,20,76,936 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be included for the purpose of calculating the annual receipts. The actual annual receipts fall within the prescribed limit of Rs. 1 crore. Therefore, the assessee is eligible for deduction under section 10(23C)(iiiad) of the Act. He also relied on the decision in the case of Param Hans Swami Uma Bharti Mission v. ACIT [2013[140 ITD 429 (Delhi) and in the case of CIT v. St. Mary's Malankara Seminary [2012] 348 ITR 69 (Ker). 9. We have heard both sides, perused the orders of authorities below and also gone through the orders of authorities below. The assessee trust is running a Arabic College since many years and the same is registered under the Tamil Nadu Societies Registration Act, 1860 and affiliated to Madras University. The case of the assessee is that the assessee is an educational institution eligible for exemption under section 10(23C)(iiiad) of the Act even if it is not registered under section 12A of the Income Tax Act. In the assessment order, the Assessing Officer has objected the exemption to the assessee on the ground that the assessee is not purely an educational institution and the receipts received by the assessee are more than Rs. 1 crore. To come to the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts of Rs. 51,86,887/-and sale proceeds from sale of land and bonds to the tune of Rs. 2.00 crores and denied exemption. The ld. CIT (Appeals) came to a conclusion that the sale proceeds out of sale of land and bonds will not amount to annual receipt and granted relief to the assessee. We find that the ld. CIT(Appeals) has rightly classified the annual receipts during the financial year 2003-04 at Rs. 51,86,887/-being the annual and recurring income of the assessee. The sale proceeds of land and bonds which are capital receipts in nature, are not recurring income and are once in a lifetime. In our opinion, the ld. CIT (Appeals) has rightly classified the annual receipts and granted exemption to the assessee under section 10(23C)(iiiad) of the Act. In so far as the case law relied on by the ld. DR are concerned, in the case of Ramalingam Charities (supra), in this case the Tribunal has found that the assessee was not existing solely for educational purpose as claimed by it and consequently, the benefit under section 11(5) and 12 was denied. Therefore, this case has no application to the facts of the present case. In so far as East India Charitable Trust (supra) is concerned, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
