TMI Blog2010 (3) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... Educational Society for the assessment years in question including the additions made by the Assessing Officer were all below on crore as tabulated below and therefore the learned CIT(A)-IV, Hyderabad ought to have clearly held that the Appellant's society's income was exempt u/s. 10(23C)(iiiad) of the IT. Act, 1961- Gross Receipts as Disclosed by Appellant Rs. Additions to Receipts made by A.D.I.T. (Exemptions)-I, Hyderabad Rs. Total Receipts Rs. 24,47,168 20,51,751 44,98,919 29,12,879 23,63,652 52,76,531 33,09,475 28,83,658 59,93,133 35,19,424 21,01,254 56,20,678 3. The learned CIT(A) IV, Hyderabad in holding that the Appellant society's- (i) is running an educational Institution as a commercial venture; (ii) Real purpose was to create Assets in the name of Interested persons. (iii) Charitable purpose is only in name's sake, whereas the ultimate beneficiaries are the fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee society is registered under the provisions of Societies Registration Act on 5.6.1986 and was running a school for promoting the cause of education in the district of Warangal, A.P. There was a survey under S.133A of the Act on 7.11.2002 and thereafter, a notice under S.148 was issued to the assessee on 25.8.2003. Assessee filed return of income in response to notice under S.148 of the Act, declaring an income of ₹ 28,189. The Assessing Officer rejected the claim of the assessee for exemption under S.10(23C)(iiiad) of the Act, mainly on two grounds. The first ground on which the Assessing Officer refused exemption to the assessee society is that the land on which the school building was constructed was not owned, but taken under an oral lease from the sons of the principal of the school of the assessee society, and accordingly, the land does not belong to the assessee society. The second ground on which the exemption was denied to the assessee was that the principal was paid a salary of ₹ 10,000 per month, and therefore, he was given pecuniary benefit, which is in contravention of the statutory provisions of S.13 of the Act The learned counsel for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asst. Director of I.T.(Exemption)-III, Hyderabad V/s. Vasavi Academy of Education in ITA No.1794/Hyd/08 dated 4.2.2010 is applicable to the case of the assessee society, and the assessee is not entitled to exemption under the Act. She relied on the order of the Assessing Officer and the CIT(A) and referred to the relevant portions thereof in support of her case. 6. Learned counsel for the assessee, in his rejoinder submitted that the issue relating to the nature of building fund collected by the assessee, does not arise for consideration by this Tribunal, as the Revenue has not preferred any appeal against the finding of the of the CIT(A) on that aspect that the amount collected in the name of building fund by the assessee is nothing but admission fees only, and consequently, the finding of the CIT(A) in that behalf has become final. 7. We have considered the rival submissions carefully We find that there is no dispute in this case regarding the objects of the assessee society being charitable in nature. The assessee society was registered under the Societies Registration Act on 15.6.1986 and was running a school since then. Survey action under S.133A was conducted on the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The assessee has paid lease rent to the owners of the land and the amount of lease rent paid to the land owners could not be said to be excessive. We have perused copy of the statement of amount of lease rental for the relevant period filed in the compilation before us. We find that a perusal of the same clearly shows that the assessee society has shown a reasonable amount as lease rental of the land and there is no finding of the tax authority that the same is not genuine. Accordingly this objection of the Assessing Officer regarding non-ownership of the land by the assessee and the land belonging to the relatives of the principal/secretary of the society is not sustainable. As for the other objection of the Department based on the fact that the principal/secretary was paid monthly salary of ₹ 10,000 for his services, we find that the Department has not doubted the fact that the person concerned has rendered his services as principal of the educational institution. The amount of salary paid at ₹ 10,000 per month could not be said to be excessive considering the activities of the school run by the assessee society. In these facts of the case, we hold that the reasoni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 2,5000 as one time fee from new students only on a uniform basis could not be deemed as capitation fee in the hands of the assessee society. Whether an amount charged under some head or other at the time of admission amounts to charging of capitation fee or not, depends on consideration of totality of the facts and circumstances of each case and one important test to determine whether an amount charged at the time of new admission tantamounts to capitation fees is the quantum of amount charged. In the facts of the present case, we hold that on merits also, assessee deserves to succeed, as charging of a small amount ranging from ₹ 1,000 to ₹ 2,500 could not be termed as capitation fee. In the facts and circumstances of this case, the ratio of the decision of the Hyderabad Bench of the tribunal in the case of Vasavi Academy of Education, Hyderabad (supra), relied upon by the Learned Departmental Representative, is not applicable to the facts of the present case. 10. In the light of the above discussion, we hold that the assessee is entitled for exemption under S.10(23C)(iiiad) of the Act, and accordingly allow the grounds of the assessee on this aspect. In view of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in these appeals, also centres around the claim of the assessee for exemption under S.10(23C)(iiiad) of the Act, and consequently the decisions rendered in the context of the grounds raised in the appeal for the assessment year 2002-03 would hold good even in the context of these five appeals. Learned Departmental Representative, on the other hand, did not dispute this position. In view of this mutually agreed position, for the detailed reasons discussed in paras 7 to 10 hereinabove, in the context of assessee's appeal ITA No.261/Hyd/06 for the assessment year 2002- 03, we hold for these years also that the assessee is entitled to succeed with regard to its claim for exemption under S.10(23C)(iiiad) Act, and direct the Assessing Officer accordingly. Similarly, while grounds taken by the assessee in these appeals with regard to levy of interest under S.234A, 234B and 234C, being consequential, are disposed off accordingly, other grounds, not pressed by the learned counsel for the assessee, are rejected as such. Consequently, these five appeals of the assessee are also partly allowed. 16. To sum up, all the six appeals of the assessee are partly allowed. Order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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