TMI Blog2016 (8) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... s’ application towards charitable purposes and allowing deduction in its respect on that basis. To this extent we are in agreement with the Revenue’s plea, which is against the allowance of both, the capital expenditure, as well as the depreciation thereon, in computing the assessee’s income under the Act. The assessee’s ‘income’ would thus stand to be arrived at on the basis of principles of commercial accountancy (as is the case for a charitable institution registered u/s. 12A). The issue, we may though clarify, becomes academic in view of the assessee’s entire income (other than the rental income supra) being exempt u/s. 10(23C)(vi). There is under the circumstances no scope for application of the decision in CIT vs. Institute of Ranking Personnel Selection [2003 (7) TMI 52 - BOMBAY High Court ]. The non-exempt income would stand to be brought to tax. We decide accordingly. - ITA No. 6762/ Mum/ 2011, C. O. No.180/Mum/2015, ITA No. 2451/ Mum/ 2013 - - - Dated:- 29-7-2016 - Sri Mahavir Singh, JM And Sri Sanjay Arora, AM Revenue by : Shri Premand J, DR Assessee by : Shri V. V. Mehandule Shri S. S. Phadker, ARs ORDER Per Bench The appeal by the Revenue and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of assessment proceedings noted that the assessee is doing the following activities:- a) Chetana Unique Academy b) Giving Hall on rent for functions like marriages etc. c) Coaching classes for students. Accordingly, the AO relying on the decision of the Hon ble Patna High Court in the case of Bihar Institute of Mining Mine Surveying Vs CIT (1994) 208 ITR 608 (Pat.) and the decision of the Hon ble Supreme Court in Sole Trustee, Lok Shikshana Trust Vs. CIT 101 ITR 234 held that the activities of the assessee are not charitable activities for the reason that the assessee is not existing solely purpose of education because it is running unapproved courses of Chetana s Institute of Management Research for the courses of PGDBM,PGDCM, PGDBA and PGPRM. According to the AO, the assessee has also violated the terms of land allotted by the Government and for this penalty was levied by AICTE on the institution amounting to ₹ 63 lacs. According to the AO, profiteering is the main motive of the assessee as it has earned a fee of ₹ 1.75 crores for the above mentioned courses, which are unrecognized. He also noted that the assessee s expenditure on Amr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10(23C) (vi) of the Act on deficit arising out of the expenditure out of the income of which exemption has already been claimed and allowed set off of deficit of earlier years against the income of the current year. The assessee has challenged the order of the CIT (A) on the issue of confirmation of addition by disallowing exemption of rental income and addition of penalty levied by ACITE, New Delhi amounting to ₹ 63,00,000/-. 6. We have heard the rival contentions and have also gone through the facts and circumstances of the case. The fact of the case that the assessee is a Public Charitable Trust engaged in educational activities. For the relevant assessment year 2008-09, a return claiming exemption of the income along with Form 10B, income expenditure account and balance sheet was filed on 17-12-2008. Admittedly, the assessee is a registered Trust u/s 12A and also u/s 80G of the Act. The assessee is also granted exemption u/s 10 (23C) (vi) of the Act by the CCIT, Mumbai vide Order dated 08-05- 2009 for and from the assessment year 2008-09. The AO recorded these facts in the assessment order at page which read as under:- 2. The assessee trust is registered with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, in this respect submitted that since the assessee has already been granted exemption u/s 12A of the Act the AO was not justified in disallowing the same on the plea that the assessee has not been granted exemption u/s 11 of the Act. With regard to disallowance of ₹ 1,22,25,962/- on account of disallowance of depreciation, the learned Counsel for the assessee submitted that the AO was not justified in disallowing the same relying on the decision of the Hon ble Supreme Court in the case of J. K. Synthetics Ltd. Vs Union of India [192] 65 Taxman 420 (SC), since this decision of the Hon ble Supreme Court is in respect of computation of income under the head business and, therefore, the same is not applicable to the facts of the assessee s case. 8. We find from the facts of the case that the assessee is already registered as a Trust u/s 12A and also u/s 80G of the Act. The assessee is also granted exemption u/s 10 (23C) (vi) of the Act by the CCIT, Mumbai vide Order dated 08-05-2008 for and from the assessment year 2008-09. We find that the objects of the assessee Trust were to promote, support, establish and conduct college or colleges, schools and institutions for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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