TMI Blog2023 (2) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of appeal :- 1 On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made in order U/S 153A by denying exemption U/S 11 to the extent of Rs. 1,72,07,968/- (Excluding depreciation) without going into merit and merely relying upon ITAT order dated 19.03.2018 on earlier asstt. Order U/S 143(3), against which the revenue is in process of filing appeal after obtaining a certified copy of the ITAT order. 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/- (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. As against the order of the Ld.CIT(A), the Department is in appeal on the grounds mentioned above. Though the Ld. DR has relied on the order of the A.O., but did not dispute the fact that the Co-ordinate Bench of the Tribunal in assessee s own case in ITA No. 6957, 6960 3606/Del/2017 (Assessment Years 2008-09, 2009-10 2010-11) has granted the benefit of Section 11 of the Act to the assessee trust. 6. Per contra, the Ld. AR relied on the order of the Ld.CIT(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the above institutes. It was also not the case of revenue that assessee is primarily engaged in the business of providing hostel facilities to the students. The above issue is no more res Integra in view of: the decision of the Hon'ble Karnataka High Court in CIT versus Karnataka lingayat education: society in ITA No. 5004/2012 dated 15/10/2014 wherein it has been held that providing hostel to the students/staff working for the society's incidental to achieve the object 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 facilitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. Further, the activity of the hostel and transport is also incidental to the attainment of the main object of the trust of the education. Therefore, the provisions of section 11 (4A) of the Act does not apply to the assessee. 28. Now coming to the various decisions relied upon by the revenue, the first decision was with respect to the Dayananda Puspadevi Charitable Trust Vs. Addl CIT dated 21.09.2016. In that particular case the assessee trust was running a dental college 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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