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TMI Blog2019 (1) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... ter called as the 'Act'). The assessee society is running educational institutions/schools imparting education in various courses like BBA, MBA, PGDBM etc. The return of income was filed for the institution declaring nil income. Subsequently, the case was selected for scrutiny. During the course of scrutiny proceedings, the AO observed that the total receipts were shown at Rs. 22,07,39,653/-. This was excluding hostel receipts of Rs. 39,37,067/- and conveyance of receipts of Rs. 1,26,54,025/-. The AO further observed that against the hostel receipts of Rs. 39,37,067/-, the assessee had incurred expenditure of Rs. 12,26,998/- as 'hostel expenses' and further as against the conveyance receipts of Rs. 1,26,54,025/- expenditure of Rs. 66,94,175 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of ITAT Delhi Bench in the case of Delhi Public School Ghaziabad Society vs. ACIT in ITA no. 3593/Del/2015 vide order dated 08.05.2018 wherein it has been held that hostel facilities and transport facilities were intrinsic part of the activity of the society and were very much incidental to the attainment to the main object of imparting of education. A copy of the said order was filed by the Ld. Authorised Representative. 4. In response the Ld. Sr. Departmental Representative placed reliance on the concurrent findings of both the lower authorities. It was submitted by the Ld. Sr. Departmental Representative that by running the buses and the hostel the assessee was generating surplus which was not being distributed to the students and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are incidental to the main object of the assessee society of education. Relevant observations on this aspect are as under:- "11. We have carefully considered the rival contentions and perused the orders of the lower authorities and other judicial pronouncement placed before us. In the grounds No. 1-3 assessee is contesting that addition made by the Ld. assessing officer treating hostel places provided to college student as business of the society and text the alleged surplus of Rs. 9887873/- as business income of the appellant. It was not the case of the revenue that assessee has rented out these hostels to the students who are not parted education in the above institutes. It was also not the case of revenue that assessee is primaril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Institute could not be held to be doing business. Further meals being supplied in a hostel to the scholars, visitors, guest faculty etc. cannot be exigible to sales tax where main activity is academics as held in Scholars home Senior Secondary School 42 VST 530. Further, the reliance placed by the lower authorities on the decision of the Hon'ble Madras High Court in case of DCIT versus Wellington charitable trust is also misplaced because in that case, the only activity of that particular trust was renting out of the property and not education. We are also not averse to considering the latest legal developments too where in the recently introduced new legislation of Goods and service tax it is provided that no GST would be chargea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a test as observed by the Hon'ble Apex court is whether on an overall view of the matter the object is to make profit and one should bear in mind the distinction between the corpus, the objects and the powers of the concerned entity. 13. In the present case also, it is not the case of the revenue that the transport facility is also provided to the outsider. Hon'ble Karnataka High Court in the case of Karnataka Lingayat Education Society in ITA No. 5004/2012 dated 15.10.2014 has held that providing the hostel to the students and the staff working for the society is incidental to achieve the object of providing education and i.e. the object of the society. Therefore, in view of the above decision of the Hon'ble Karnataka High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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