TMI Blog2020 (5) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... eleted by the Ld. CIT(Appeals). - Decided against revenue. - CO.No.18/PUN/2019, ITA No.779/PUN/2017 (Assessment Year : 2005-06) - - - Dated:- 2-1-2020 - SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM Assessee by: Shri M.K. Kulkarni Revenue by: Shri S.P. Walimbe ORDER PER PARTHA SARATHI CHAUDHURY, JM : This appeal preferred by the Revenue and the supportive cross objection preferred by the assessee emanates from the order of the Ld. CIT(Appeals)-2, Kolhapur dated 10.01.2017 for the assessment year 2005-06 as per the following grounds of appeal on record: 1. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that deposits of ₹ 65,00,000/- with Madhyamik Adhyapak Sahakari Patsanstha and ₹ 50,000/- with Ravindra Nagari Patsantha are eligible for investment u/s.11(5) of the I.T. Act. 2. Whether on the facts and in the circumstances of the case and in law the Ld.CIT(A) erred in holding that payment of ₹ 21,53,830/- to Marleshwar Construction Pvt. Ltd. are eligible for investment u/s.11(5) of the I.T. Act and there is no violation of section 13 of the Act. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit report which opined that the trust has deposited ₹ 65,00,000/- with the Madhyamik Adhyapak Sah Pathpedhi ₹ 50,000/- in Ravindra Nagari Pat Sanstha which the auditors opined is contrary to the provisions of Mumbai Public Trusts Act. The Assessing Officer therefore concluded that the provisions of see 13(c) would apply to the 1st 5 instances listed out totaling to ₹ 21,53,830/- and the provisions of sec 13(d) would apply to the two investments listed out. The Assessing Officer held that ₹ 21,53,830/- ₹ 65,50,000/- would not qualify for exemption u/s.11 of the Act. 4. The Assessing Officer further noted that the assessee has received ₹ 38,37,640/- as development fee and the same has been carried directly to the balance sheet as corpus donations. The Assessing Officer examined the nature of the development fee and held that the fee structure of the Min of HRD is in two categories viz. tuition fees and development fees. The development fees are allowed to be collected for the recovery of the capital cost to the management. There are also certain restrictions on the utilisation of development fees on the management. The Assessing Officer was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to ₹ 65,50,000 being the deposits made by the appellant in Madhyamik Adhyapak Sahakari Pat Pedhi Ravindra Nagari Pat Sanstha have been dealt with by the ITAT in para 8.3 of its order. Similarly the issue of advance made to one of the trustees and advances for purchase of car has also been dealt with by the ITAT in its impugned order. Finally it could be observed that the Hon'ble ITAT has held in the concluding para that there is no infringement of any of the provisions of sec 11(5) or 13. This finding of fact has become final on the issues before the ITAT and I am therefore bound by these factual findings. It is evident therefore that the additions made by the AO for infringement of see 13(c) (d) of ₹ 65,50,000 cannot now stand in light of the clear findings of the Hon'ble ITAT. Respectfully following the decision of the Hon'ble ITAT in the appellants own case, I delete the addition of ₹ 65,50,000 made by the AO on this count. Ground 7 is therefore allowed. 7. With regard to ground No.2 i.e. payment of ₹ 21,53,830/- to Marleshwar Construction Pvt. Ltd., the Ld. CIT(Appeals) relying on the decision of the Pune Bench of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore out of the purview of income of the appellant Thereafter, the Ld. CIT(Appeals) further relied on the decision of the Pune Bench of the Tribunal in the case of Bharatiya Vidyapeeth Medical Foundation (2013) 37 taxmann.com 242 ( Pune.) and have discussed the entire facts and case laws which is on record. However, facts therein were much more critical since donations were anonymous and merely had the word corpus stamped on the receipts and therefore, the Tribunal held that the donors are not aware as to for what purpose the donations are being made. However, in the case of the assessee, the facts are exactly opposite in the sense that the students who get admission pay the development fee and without the same, there would be no admission for them. There is an element of quid pro quo for them and therefore, the students are exactly aware for what purpose their fee is going to be used for. For a moment, even if it is held that development fee is revenue receipts, the same are still eligible for deduction u/s.11 of the Act in the light of the fact that there is no violation of either 11(5) or 13 of the Act in the case of the assessee as has been held by the Pune Bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance of depreciation of ₹ 78,27,777. Ground 9 is accordingly allowed. 10. We have perused the case records and given considerable thought to the findings of the Ld. CIT(Appeals) on the issues raised by the Revenue. We find the Ld. CIT(Appeals) has based his findings relying on the decision of the Pune Bench of the Tribunal in assessee s own case (supra.) and also other decisions of the Hon ble High Courts. Therefore, we do not find any infirmity with the findings of the Ld. CIT(Appeals) on the issues and relief provided to the assessee by the Ld. CIT(Appeals) in respect of these issues are hereby sustained. 11. In the result, appeal of the Revenue in ITA No.779/PUN/2017 is dismissed. 12. At the very outset, the Ld. Counsel for the assessee submitted that if the appeal of Revenue is dismissed then the cross objection being supportive of the order of Ld. CIT(Appeals) becomes infructuous. Since we have sustained the relief granted to the assessee by the Ld. CIT(Appeals), cross objection being supportive becomes infructuous and hence, dismissed. Thus, CO No. 18/PUN/2019 filed by the assessee is dismissed. 13. In the combined result, appeal of the Revenue and cros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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