9911796707
TMI Blog2023 (2) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 On facts and circumstances of the case and in law, the Ld. CIT(A) erred in merely following ITAT order rendered earlier without appreciating that even if the assessee was required to maintain hostel/transport facilities towards fulfillment of its objective of providing education as incidental activity, the maintenance of separate books of accounts for such activity was still required to claim exemption U/S U/S 11 r/w 11 (4A). 3 Without prejudice, on facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that in addition to denying exemption U/S 11 to the extent of Rs.1,72,07,968/- the AO had also disallowed the expenses to the tune of Rs.1,76,31,774/-out the total expenses of Rs.3,47,63,455/- (excluding depreciation on grounds that the expenses to this extent were non verifiable in absence of separate books and vouchers being maintained, against which no specific grounds were raised by assessee either before CIT(A) during appeal against order u/s 153A or during appeal filed earlier to the ITAT against order 143(3) nor any finding was given by ITAT on allowability of the said expenses and therefore the finding of the AO that the expenses to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) and also brought to our notice to the order of the Tribunal in ITA No. 6957, 6960 & 3606/Del/2017. 7. We have heard the parties perused the material available on record and gave our thoughtful consideration. 8. During the assessment proceedings, the A.O. completed the assumption at Rs. 2,72,79,769/- by rejecting the claim of exemption u/s 11 of the Act. the issue of allowability u/s 11 of the Act to the assessee trust has been decided by the Coordinate bench in ITA No. 6957, 6960 & 3606/Del/2017 dated 19/03/2018 in favour of the assessee which reads as under:- "26.We have carefully considered the rival contentions and also perused the orders of the lower authorities. The assessee is a society running an engineering college in the name and style of M/s. Academy of Business and Engineering Sciences, assessee is affiliated with all India Council for Technical Education (A1CTE). It is also undisputed that assessee is carrying on the educational activities and running certain colleges etc. During the year it is also undisputed that assessee has earned gross receipt of Rs. 16.71 crores on account of educational activities whereas assessee is also running a hostel for the student ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of providing education, namely the object of the society. In view of this we are of the opinion that providing of hostel facilities and transport facilities to the student and staff member of the educational Institute cannot be considered as business activity but is subservient to the object of educational activities performed by the society. We are also supported by our view by the decision, of the Hon'ble Allahabad High Court in 1IT versus state of UP, (1976) 38 STC 428 (All) wherein question arose in Indian Institute of Technology v. State of U.P. (1976) 38 STC 428 STC (All) with respect to the visitors' hostel maintained by the Indian Institute of Technology where lodging and boarding facilities were provided to persons who would come to the Institute In connection with education and the academic activities of the Institute. It was observed that the statutory obligation of maintenance of the hostel, which involved supply, and sale of food was an integral part of the objects of the Institute nor could the running of the hostel be treated as the principal activity of the Institute. The Institute could not be held to be doing business. Further meals being supplied in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also provided hostel facilities on fee basis. The Id Assessing Officer treated the hostel fees at higher side in comparing the market price and therefore, applying the provisions of section 11 (4A), as he did not maintain separate books of accounts, the exemption was denied. The above decision is rendered by the strength of single member whereas the decision relied upon by the Id AR is of division bench and therefore, has more binding strength. Furthermore, in para No. 8 of that it is accepted that hostel activity is incidental to the attainment of the object of the trust; Therefore, the decision even after referring the decision of the Hon'ble Karnataka High Court it was so held. As decision of division bench, held otherwise, this decision cannot be relied upon. 29. The next decision relied upon in case of Young Women's Christian Association of Madras Vs. JDIT 41 Taxmann.com 142 the assessee was carrying on advancement any other object of general utility running orphanage, old age homes etc. The dominant part of the income-was from running a working women hostel. Such hostel activities were not found to be incidental to the main object of the trust. Therefore, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
