TMI Blog2015 (6) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... cumulated income set apart for application, in terms of section 11(2) which is in violation of the provisions of section 11(5) - Held that:- The claim of the assessee is not disputed by the learned D.R. Having regard to the circumstances of the case and in the light of the decision in the case of Acme Educational Society [2010 (7) TMI 159 - DELHI HIGH COURT], observed that interest free loan given by the assessee society to another society with identical object cannot be treated as “investment” or “deposit” in which event there is no violation of section 13(1)(d) r.w.s. 11(5) of the Act, we are of the view that the amount advanced by the assessee to Don Bosco Institute is not covered by section 11(5) of the Act and even on that count the claim of exemption could not have been denied to the assessee. Under these circumstances we are of the view that the plea taken before us by the assessee merits acceptance and we direct the AO to grant exemption under section 11 of the Act on the income earned by the assessee, including lease rent, etc. - Decided in favour of assessee. - ITA No. 5973/Mum/2013 - - - Dated:- 17-6-2015 - Shri D. Manmohan And Shri Sanjay Arora,JJ. For the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jet Airways the management approached the society to make available vacant classrooms on lease basis for their educational activities, in the form of training centres, for which the Bombay Salesian Society, who is the owner of the place, gave them necessary permission. 5. During the course of hearing assessee trust filed another letter dated 05.12.2011 wherein it was submitted that the assessee has provided funds to Don Bosco Institute for a short period which was immediately returned in the next assessment year. Placing reliance upon the decision of the Hon'ble Delhi High Court in the case of DIT vs. Alarippu 244 ITR 358 it was submitted that the loan given by the assessee would not constitute either investment or deposit and hence the assessee could not have charged interest so as to invoke provisions of section of 13(1)(d) of the Act. Regarding the facilities given to the trainees of Tata Sky it was submitted that the amount received from them was for providing accommodation to the students who had come for gaining technical knowledge, which is the main activity of the assessee trust. He relied upon the decision of the Hon'ble Calcutta High Court in the case of DIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adequate interest/security and hence even provisions of section 11(5) are attracted in which event assessee would lose the right to exemption in the light of the decision of the Hon'ble Delhi High Court in the case of Alarippu (supra). 8. Aggrieved, assessee contended before the CIT(A) that the ADIT erred in not granting sufficient opportunity while framing the assessment and also erred in denying the claim of exemption under section 11 of the Act. It was also contended that he overlooked the contention of the assessee that even renting of space was extension of the object of education since the premises was used for the purpose of imparting vocational training. By granting loan to Don Bosco Institute, assessee has not violated provisions of section 13(2)(a) r.w.s. 11(5) of the Act. Assessee also relied upon several case law in support its contention that it was an approved professional training institute affiliated to the National Council for Vocational Training, DGET, Ministry of Labour Employment, Government of India. It was also submitted that the decision of the Hon'ble Delhi High Court in the case of Alarippu (supra) was wrongly applied by the AO to the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned thereon can be considered as furtherance of the object of education as per the main clause of the trust. It is not in dispute that assessee s main object is imparting vocational training and it is a recognised institution. The charges collected by the assessee for imparting education are much less than what the private/unaided institutions, which are not recognised, are charging. It is also not in dispute that assessee has been running certified courses. The net income of the assessee is, undoubtedly, utilised/applied for the purpose of charity. When additional space was available it was let out to Tata Sky, Jet Airways, etc. wherefrom assessee not only received rental income but also received fees for providing technical training to those trainees and hence it has to be treated as amount received in the natural course of advancement of its main object, i.e. Education. He also referred to the decision of the learned CIT(A) in assessee s own case for A.Y. 2010-11 to submit that the assessee has been conducting examinations for ITI students as per the procedure prescribed by the NCVT and even on the rented premises certain class timings are maintained and assessee also has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... space is utilised for training the Jet Airways employees and others to obtain technical knowledge wherein the assessee was also imparting training and had the benefit of the lab, etc., provided by them, and thus the rental income and income received for services rendered cannot be treated as commercial activity since it is for the advancement of the object of general public utility. In this regard he relied upon the decision of the Hon'ble Calcutta High Court in the case of DIT vs. Sahu Jain Trust (ITA No. 38 of 2001 dated 31st March, 2011) wherein the court observed that if the rental income was received by way of subletting, to enable the trust to carry out its charitable object in effective manner, exemption cannot be denied. He thus strongly submitted that assessee is still engaged in educational activity and letting out of premises is extension of its activity since the space is utilised for the same purpose, i.e. vocational training. At any rate, it falls within the meaning of education since it is not denied that the income is utilised for charitable activities. 12. On the other hand, the learned D.R. strongly relied upon the orders passed by the tax authorities. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... practical training in automobile repairs to the students of the assessee free of cost. Training timings are to be observed strictly as per normal schooling. In the case of DIT vs. Sahu Jain Trust 56 DTR 402 (Calcutta) it was observed that exemption under section 11 cannot be denied on the ground that the trust had let out property for efficient utilisation of its assets. The CBDT in its circular dated 19th December, 2008 clarified by mentioning that the newly inserted proviso to section 2(15) will not apply where the purpose of a trust or institution is Education, even if it incidentally involves carrying on of commercial activities. In the case of Samudra Institute of Maritime vs. DDIT (ITA No. 5760/Mum/2010) ITAT H Bench, Mumbai, vide its order dated 30.11.2011, observed that even if the courses are not approved but if the intention of the assessee was to give technical training, exemption under section 11 cannot be denied. In other words, as long as the trust is imparting education as per the object of the trust, income earned by such trust should be allowed the benefit of exemption under section 11 of the Act. Having regard to the case law cited before us we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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