Appeal allowed for tax exemption denial. Fresh examination ordered for capitation fees. Depreciation claim remitted for reevaluation.

The appeal by the Revenue challenging the denial of the assessee's claim for exemption of income from tax under section 11 for the assessment year 2009-10 was allowed for statistical purposes. The Tribunal directed a fresh examination by the Assessing Officer to determine if the assessee was collecting capitation fees. Additionally, the disallowance of the assessee's claim for depreciation was also remitted back to the Assessing Officer for reevaluation in compliance with the law and providing a reasonable opportunity for the assessee to be heard.

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Issues involved:
1. Denial of assessee's claim for exemption of income from tax.
2. Disallowance of assessee's claim for depreciation.

Detailed Analysis:

Issue 1: Denial of assessee's claim for exemption of income from tax
The appeal by the Revenue challenged the order of the Commissioner of Income-tax(Appeals) regarding the eligibility of the assessee for exemption under section 11 for the assessment year 2009-10. The grounds of appeal raised various contentions, including the absence of approval under sub-clause (vi) to Section 10(23C) and the distinction between approval under sub-clause (vi) and registration under Section 12A of the Act. The Revenue contended that obtaining approval of the prescribed authority is mandatory under Section 10(23C)(vi) for educational institutions with aggregate gross receipts over Rs.1.00 Crore. The Tribunal referred to previous decisions and Supreme Court judgments emphasizing that if donations are received compulsorily for student admissions beyond prescribed fees, the institution may not be entitled to exemption under Section 10(23C) or Section 11. The Tribunal remitted the matter back to the assessing officer to determine if the assessee was collecting capitation fees and directed a fresh examination in light of relevant judgments.

Issue 2: Disallowance of assessee's claim for depreciation
The second issue pertained to the disallowance of the assessee's claim for depreciation. The Tribunal noted consistent decisions in similar matters and directed a fresh examination by the Assessing Officer. It cited precedents regarding the allowance of depreciation on fixed assets necessary for arriving at income available for charitable purposes. The Tribunal highlighted that if the value of an asset was not allowed as expenditure under Section 11, the depreciation could be claimed. However, if the value was already allowed under Section 11, depreciation would not be permitted. The Tribunal set aside the CIT(A)'s order and instructed the Assessing Officer to reevaluate the issue of depreciation, ensuring compliance with the law and providing a reasonable opportunity for the assessee to be heard.

In conclusion, the appeal by the Revenue was allowed for statistical purposes, with both issues requiring further examination and determination by the Assessing Officer in accordance with relevant legal provisions and precedents.

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