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TMI Blog2019 (11) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 26/09/2013 in Form No.56D before the Ld.CCIT, Visakhapatnam for granting exemption u/sec. 10(23C) of the Act and simultaneously filed the return of income on the same date. The said application of the society was rejected by the CCIT in F.No.CCIT/VSP/Tech/10(23C)/2/2014-15, dated 26/09/2014. 3.1 During the course of assessment proceedings, the Assessing Officer has found that the assessee has sold its land admeasuring 7308.4 sq.yds. and RCC building consisting of ground + 3 floors with plinth are of 40,448 sft., situated at Singupuram village, Srikakulam Mandalam for a consideration of Rs. 2,55,94,000/- vide registered sale deed dated 31/12/2012 to another society viz. Sri Surya Educational Society, Nandyal. As per the registered sale document, the value of the land of 7308.4 sq.yds. was Rs. 37,64,000/- and the constructed area of 40,448 sft., of RCC building was valued at Rs. 2,18,30,000/- aggregating to Rs. 2,55,94,000/-. The Assessing Officer found from the balance sheet that the movable assets with the book value of Rs. 30,51,396/- consisting of furniture, vehicles and computers etc., were also available and the value of the said movable assets was taken at Rs. NIL. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee as to why the assessment should not be revised? In response, the assessee filed the replies to the notice on 14/02/2018 & 28/03/2018 objecting for the proposed revision. The assessee stated before the ld.CIT(E) that it is an educational institution and the income of the assessee is exempt u/sec. 10(23C)(vi) of the Act. With regard to capital gains, the assessee has submitted before the ld.CIT(E) that the assessee has sold the property which was correctly declared in the income tax returns. Subsequent to rejection of assessee's application for grant of registration u/sec. 10(23C) by the ld.CCIT, the assessee had filed the revised return of income before the Assessing Officer and the entire capital receipts were excluded from the gross receipts, since, the capital receipts does not include the gross receipts for the purpose of section 10(23C)(iiiad) of the Act. The Assessing Officer after having examined the explanation, has completed the assessment after being satisfied with regard to exemption claimed by the assessee and hence submitted that there was no error in the assessment order which calls for action u/sec. 263. Secondly, with regard to hostel expenses and bonus to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of CIT Vs. Madrasa E.Bhakhiyath-Us-Salihath Arabic College in T.C.(A).No. 450/2014, dated 11.08.2014. The Assessing Officer after considering the judicial precedent and the revised return, did not consider to include the capital receipt in the gross receipt. Apart from the above, it is found from the assessment order page No. 3 that the Assessing Officer has verified the balance sheet and taxed the movable assets valuing at Rs. 30,51,396/- consisting of furniture, fittings, vehicles and computers etc., since the assessee did not admit the said receipts of transfer of furniture and other movables in the income and expenditure account. 10.1 The ld.CIT(E) taken the market value of the property as estimated by the Department Valuation Cell for the purpose of capital gains. The sale consideration admitted by the assessee was stated to be more than the value determined by the Stamps & Registration Authorities as per the information available on record. This fact was not controverted by the revenue. Once, the assessee admits the sale consideration more than that of Sec. 50C value, there is no case to make reference of valuation of the property to the Departmental Valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not exceed the prescribed limit as mentioned in section 10(23C) of the act, hence, granting of exemption u/sec. 10(23C) is not required in assessee's case. There is no discussion with regard to the disallowance of expenses in the assessment order. In the instant case, the assessee contended that increased income due to disallowance of expenses also gets exemption and net the result would be zero taxable income. As per the act, the assessee is entitled for exemption of income u/sec. 10(23)(iiiad) of the Act. Thus, the assessee is also eligible for exemption of the increased income since, it is carrying on educational activity. During the appeal hearing, ld.AR has submitted that the assessee had explained before the Assessing Officer that the disallowance relating to hostel expenses, bonus to the staff though increases the income, the same was exempt u/sec. 10(23C)(iiiad) of the Act which the Assessing Officer had accepted. Therefore, there is no error in the order passed by the Assessing Officer and we are of the view that the ld.CIT(E) has erroneously assumed the jurisdiction u/sec. 263 of the Act. 15. The next issue in the order of the ld. CIT(E) is that the assessee is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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