TMI Blog2019 (4) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... because some celebrities are holding shareholding in one of entities to which assessee society has engaged for provision of services does not make any difference in allowance or disallowance of a particular expenditure for object of society. Merely because a hotel is rented by assessee society for using, as a hostel for student, does not make any difference, as far as student of the society exclusively uses the same. These facts do not exclude assessee from provision of section 2 (15). It is also not the case of AO that assessee is carrying on business activity, which is tainted with profit motives and is not an educational activity. The AO in this appeal does not dispute further repair expenditure of such hotel used as hostel by assessee. Hence, we do not find any infirmity in order of learned CIT – A in disallowing above claim. - Decided against revenue Defect in Form 36 - Appeal of revenue does not deserve any merit even for admission. By looking at form number 36 it is apparent that learned assessing officer has mentioned respondent as “Oil and natural gas Corp Ltd, Dehradun.” Here respondent is not ONGC but Woodstock school, Mussoorie. As AO wrongly shows respondent, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erprises owns some hotel, which has been taken by assessee, and in that hotel, such catering services are to be provided by Mars Caterers. AO also noted that Mars Enterprises entered in to agreement with assessee and later on transferred agreement by assignment in favour of Mars catering services. Assessee explained that as assessee is operating a school. School has lodging and boarding facilities both. Therefore, for managing and operating food services of school at Mussoorie it has employed above company. The company is one of experts in specified services. Assessee explained terms of agreement, which are reproduced in assessment order at relevant pages 9 11. Learned assessing officer noted that as per terms of agreement INR 3,780,000 should have been paid. Assessee paid a sum of ₹ 41,69,000 and plus a debit balance of INR 2,056,000 was also made and thus total payment of INR 6,226,000 was paid to above company and therefore learned assessing officer asked assessee to explain why this debit be not disallowed as payment was made for a purpose which was beyond object of assessee society. Assessee explained rationale behind payment of above sum. However, learned assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was also residing in above hotel, which is owned by Mars catering services group. She therefore stated that apparently it is an agreement to operate hotel. She submitted that operating a hotel is not an educational activity. This cannot be a charitable object as per section 2 (15) of the act. Therefore, she stated learned assessing officer has correctly made that above disallowance. She submitted that learned CIT A has not looked into above facts and merely stated that assessee is running a school and therefore lodging and boarding facilities are required to be provided to students of assessee school and therefore he allowed claim of assessee. She submitted that if looked at from angle as mentioned in para number seven of assessment order above expenditure has been correctly disallowed by learned assessing officer, as it is not an object of society to hire a hotel and provide catering facilities therein. She stated that it could not be remotely related to educational activity of assessee. 7. Learned authorised representative submitted that assessee is a school, which is running lodging and boarding facilities for its students. For purpose of hostel facility of studen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering services. School was to provide above facilities at four different places, including a hotel, which is used as a hostel by the society, and obligation of Mars catering services is mentioned in clause 5 of agreement entered into between societies as well as Mars Catering services dated 17/07/2007. According to this agreement, INR 3,780,000/- at rate of INR 315,000/- for each month was to be provided by school to Mars catering services. In terms of above agreement, as on 01/04/2009 there was a credit balance of INR 1,039,000 in account of Mars catering services private limited in books of account of assessee. Along with that after giving further credit for services rendered as well as towards reimbursement of expenses incurred, total credit stood at INR 7 198470 including opening balance to credit of above company. Out of that 6819789/ was paid and still there is a credit balance of INR 3 78681/- outstanding as payable by society to Mars catering services. The ld Ao disallowed the above sum holding that such advances is for the benefit of Mar catering services and it is not for the object of trust assesse. Looking at the activity of the school, it is a boarding school and teac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as student of the society exclusively uses the same. These facts do not exclude assessee from provision of section 2 (15) of the act. It is also not the case of AO that assessee is carrying on business activity, which is tainted with profit motives and is not an educational activity. The LD AO in this appeal does not dispute further repair expenditure of such hotel used as hostel by assessee. Hence, we do not find any infirmity in order of learned CIT An in disallowing above claim. In result, ground number 1 of appeal of learned assessing officer is dismissed. 9. We would also like to state that appeal of revenue does not deserve any merit even for admission. By looking at form number 36 it is apparent that learned assessing officer has mentioned respondent as Oil and natural gas Corp Ltd, Dehradun. Here respondent is not ONGC but Woodstock school, Mussoorie. As learned assessing officer wrongly shows respondent, and form number 36 is wrongly filled up, on this issue, defect notice was also issued to LD AO at time of filing of appeal. Registry of tribunal has mentioned this defect in notice itself on 14/07/2014. It is also surprising that learned assessing officer has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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