TMI Blog2017 (12) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case when the development fee received by the assessee is not voluntary but it is a compulsory charge on the students then the same cannot be classified as capital in nature for specific purpose or part of the corpus fund of the assessee trust. The decision relied by the ld. AR are on the point that when a particular contribution or donation is given by the donor as per his free will and for specific purpose then the same cannot be treated as revenue receipt. Having regard to all the fee in the name of development charge received by the assessee from the students is part of the current receipt and will part take a character of the other fee charged by the assessee on account of tuition fee, term fee etc. Hence, we set aside the order of the ld. CIT(A) qua this issue. Depreciation on capital assets - Held that:- Depreciation claimed by the assessee on capital assets for which capital expenditure was already given in the year under consideration allowed. See CIT vs. Krishi Upaj Mandi Samiti, Jaisalmer [2015 (3) TMI 11 - RAJASTHAN HIGH COURT ] - ITA No. 1087/JP/2016 - - - Dated:- 15-11-2017 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For The Assessee : Shri P.C. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation of the assessee and was of the view that the development fund received as part of the other fees and as such there is no contribution and difference in the nature of development fund and other fees. The AO also taken note of the fact that the assessee itself has claimed that the development fund made by the students were in consideration of services to be rendered by the school to student and as such it is fee against the services and not voluntary offered from any person but a compulsion of students to pay development fund. Accordingly, the AO treated the development receipt of ₹ 11,32,50,389/- as revenue receipt and after considering excess of receipt over the application of income and 15% of the receipt allowed as set apart u/s 11 assessed the balance of ₹ 1,44,06,790/- treated as income chargeable to tax. The assessee challenged the action of the AO before the ld. CIT(A). The ld. CIT(A) allowed the claim of the assessee and deleted the addition made by the AO. Aggrieved by the impugned order of the ld. CIT(A) the Revenue has filed the present appeal and raised the following grounds as under:- 1) On the facts and in the circumstances of the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther when this fee received against the student services then it cannot be treated as capital in nature but it is the current receipt of the assessee. The ld. DR has thus contended that the received in question cannot be classified as donation or contribution for specific projects and therefore, will part of revenue receipt from the students. Since the surplus is increased beyond the 15% limit of allowable amount as per provision of section 11(1)(a) of the Act, therefore, the said surplus over and above the 15% cap is liable to tax. He has relied upon the order of the Assessing Officer. 4. On the other hand, ld. AR of the assessee has submitted that the assessee is also notified u/s 10 (23C)(vi) and therefore this amount is otherwise exempt under the provisions of section 10(23C)(vi). He has reiterated the contention has raised before the authorities below and submitted that though the voluntary contribution is included in the term income as per section 11(1)(a) in respect of charitable or religious trust however, the said amount shall not be included in the total income of the trust or institutions being the corpus fund of the trust as per provisions of section 11(1)(a) r.w.s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is granted registration u/s 12AA of the Act as well as notified u/s 10 (23C)(vi) of the Act. However the mere registration granted u/s 12A and notification u/s 10(23C) would not ipso facto exempt all the receipts from tax. For the purpose of availing the benefit u/s 11 of the Act. The conditions as stipulated under the said provision along with the condition as provided u/s 12 and 13 of the Act are to be satisfied. The dispute before us is on the limited point whether the receipt on account of development fund/development fee from the students of the assessee is in the category of capital receipts/ corpus fund to be used by the assessee for specific purpose or not. So far as a voluntary donation or contribution for specific purpose is received by the trust or institution the same would be classified as capital receipt for being part of the corpus fund for specific purpose for which such donation is given by the donor. However the question arises in the case of the assessee is whether the receipt on account of development fee collected from the students is a voluntary contribution/donation or it is a compulsory payment by the students for continuing the studying in the educa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the peculiar facts and circumstances we are of the considered opinion that the fee in the name of development charge received by the assessee from the students is part of the current receipt and will part take a character of the other fee charged by the assessee on account of tuition fee, term fee etc. Hence, we set aside the order of the ld. CIT(A) qua this issue. 6. As regards the benefit of section 10(23C), we find that this issue was not decided by the AO and further the ld. CIT(A) has not adjudicated this issue as the relief was granted u/s 11 and 12 of the Act. The relevant part of the ld. CIT(A) finding on this issue in para 6.3 is as under:- 6.3 I have carefully considered the facts of the case, findings of the AO and submission of the appellant. Since I have already allowed ground No. 1 and 2 supra, there does not remain any grievance of assessee. This ground therefore requires no adjudication. Therefore, the issue of benefit u/s 10(23C) has not been adjudicated by the ld. CIT(A) or by the AO and hence the same is required to be considered and adjudicated at the level of the AO. It is pertinent to note that the benefit of section 10(23C)(vi) is also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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