TMI Blog2017 (5) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... htly been confirmed by the Ld. CIT(A), by holding that assessee organization is an educational institution being run for profit and thus ineligible for the exemption as claimed, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) and dismiss the appeal of the assessee. - Decided against assessee. - ITA No. 202/Del/2017 - - - Dated:- 12-5-2017 - Shri H. S. Sidhu, Judicial Member And Shri Prashant Maharishi, Accountant Member Assessee by : Dr. Rakesh Gupta, Adv. Sh. Somil Agarwal, Adv. Department by : S h . N.K. Bansal, Sr. DR ORDER Per H. S. Sidhu, JM The Assessee has filed this appeal against the impugned order dated 07/11/2016 passed by the Ld. Commissioner of Income Tax(Appeals-2), Gurgaon relevant to assessment year 2012-13. 2. The grounds raised in the Appeal read as under:- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of ₹ 53,91,212/-, inter-alia on account of running educational institution allegedly for profit motives. 2. That having regard to the facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on facts in confirming the action of Ld. AO in making addition of ₹ 53,91,212/-, inter-alia on account of running educational institution allegedly for profit motives. He further stated that Ld. CIT(A) also erred in law and on facts in confirming the action of Ld. AO in not allowing the exemption u/s. 10(23C)(iiiad) and has further erred in observing that there is inter-alia a profit motive of the society and impugned order has been passed by recording incorrect facts and findings and without providing adequate opportunity of hearing. In view of the above, he requested that the orders of the revenue authorities may be quashed and the appeal of the assessee may be allowed. To support his contention, he filed the copy of the Synopsis which reproduced as under. The only effective issue in the present appeal is against the denial of exemption u/s 10(23C)(iiiad), on the ground that appellant society has made substantial profits and therefore cannot be said to exist for educational purpose which was the requirement of that section. It is respectfully submitted that appellant society is running a school since 2000 and current strength of the students in the year under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Assessee was therefore entitled to exemption under s. 10(23 C) (iiiad). Ld. A.O. has made following adverse which are met as under:- 1. Ld. A.O. has mentioned that assessee society is earning profit and creating asset from the profits and percentage of profit is increasing every year. In reply, it is submitted enclosed is the chart in the paper book enclosed at PB 1-14 which shows that given the capital assets created in various years i.e. from AY 2009-10 to AY 2012-13, there was no significant surplus. Therefore, this objection of Ld. AO is misplaced. 2. Ld. A.O. has mentioned that appellant is creating assets outside the school premises and not for the purpose of school and appellant trust has purchased land for ₹ 48.80 Lacs in district Palwal, which is at a distance from the school and no evidence of opening school have been filed. In reply, it is submitted that opening or preparing for opening new school away from the existing school premises is not prohibited much less under the Income Tax Act. Schools are not set up over night and it is not the case of Ld. A.O. that land has been purchased in Palwal for some personal purpose. Therefore, this obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. We have heard both the parties and perused the records. We find that during the year under consideration, the assessee Trust neither registered u/s. 12AA nor approved u/s.10(23C)(vi) of I.T. Act, 1961. The total receipts of the Trust is shown at ₹ 99,79,740/- out of which a total expenses of ₹ 45,88,528/- has been claimed and surplus (net profit) of ₹ 53,91,211.59 has been shown and claimed exempted u/s. 10(23C)(iii)(ad) of I.T. Act, 1961 being Education Trust as total receipts of the Society are below ₹ 1 Crore. We find that according to Section 10(23C)(iii)(ad) of the I.T. Act, it is held that Any university or other Educational Institution existing solely for educational purpose and not for purpose of profit, if the aggregate receipt of such University or Educational Institution does not exceeding ₹ 1 Crore. 8.1 But we find that in this case, the Trust is not fulfilling the above conditions and it is clear that the Trust is not existing for educational purpose but also for earning profit and creating assets from the profit earned and his profit receipt and percentage of profit is increasing every year. It is clear from the chart of surplus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 11,45,330/- interest on these FDRs, beside these, he has also earned interest of ₹ 79,374/- on S.B. Alc. During the year ,under consideration. Bank Balance on S.B. A/c as on 31.03.2012 was as under:- Sr. No. Name of Bank Interest Amount 1. OBC Bank, Sec-5, Gurgaon. ₹ 25,858.23 2. Syndicate Bank, Delhi. ₹ 22,56,063.39 3. Karnatka Bank ₹ 74,510.19 4. Allahabad Bank ₹ 1,38,642.00 5. OBC Bank, Kanahi, Gurgaon. ₹ 25,858.23 8.6 On going through the above details, we are of the considered view that all the Trustee of the Trust are also from one family of Sh. Balwant Rai Satija and it is seems to be a family Trust and address of all these trustee are shown as under: - Sr. No Name of Family Member Address ..... X X X X Extracts X X X X X X X X Extracts X X X X
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