TaxTMI 
TaxTMI 
2014 (1) TMI 880
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....the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing exemption u/s 11/12 of the Act in ignoring the fact that assessee was not recognized in India and courses are purely in commercial manner." 2. The assessee is a trust formed for educational purposes. It is registered u/s 12A of the IT Act. It had claimed exemptions u/s 11/12 of the Act. It is running an institution in the name of Institute for International Management and Technology, i.e., IMT, Gurgaon. The Assessing Officer asked the assessee as to whether there was any notification/recognition of the Oxford Books University (OBU) by Government of India, since all the courses at IMT, Gurgaon were recognized by OBU. The assessee submitted in reply that IMT, Gurgaon had collaboration with OBU, UK, according to which, IMT would be responsible for the following:- i) Selection and admission of the students; ii) Delivery of the programmes offered by OBU, namely, BA (Hons.) Business Administration (3 year full time), BA (Hons.) Business Administration (4 year full time sandwich), BA (Hons.) Business Administration in Retail Management (3 year full time), B.Sc. (Hons.) Hotel & Restaurant Management (4....
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....le activities and the proviso to Section 2 (15) was clearly attracted. The Assessing Officer thus refused exemption under Sections 11/12 of the Act to the assessee Society computing its income as a normal AOP. 5. By virtue of the impugned order, the Ld. CIT (A) upheld the disallowance on account of business promotion and entertainment expenses. However, the assessee was held to be entitled to the benefits of Sections 11 and 12 of the Act. The disallowance on account of advertisement expenditure was deleted. 6. Before us, the Ld. DR has contended that the Ld. CIT (A) has erred in holding the assessee entitled to the benefits of Sections 11 and 12 of the Act, even though the disallowances on account of business promotion and entertainment expenses have been upheld by the Ld. CIT (A) himself. It has also been contended that the Ld. CIT (A) has erred in allowing the expenses on account of advertisement, failing to take into consideration the fact that the advertisement expenditure was incurred for commercial activities and such expenditure was not as per the objects of the trust. It has been contended that the Ld. CIT (A) has failed to take into consideration the categorical obse....
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....OBU, which provides the curriculum and periodic teacher training. OBU monitors and reviews the delivery of the curriculum by the institution. It is the OBU, which awards the degree which is recognized in the UK as well as in other parts of the world. OBU is not recognized by the Government of India/UGC/any other Government authority in India and the programmes run by the institution are conducted on the basis of the agreement executed between the institution and OBU. The Assessing Officer held the assessee disentitled to the benefits of Sections 11 and 12 of the Act on the sole basis that OBU does not have recognition, as above. The Assessing Officer made disallowance of an amount of Rs 10,29,404/- representing business promotion and entertainment expenditure incurred. The Assessing Officer held, while doing so, that this expenditure showed that the institution was fully involved in commercial/non-charitable activities and was being run as a business entity. The Ld. CIT (A) held such disallowance to be reasonable, observing that such expenses could not be incurred by an educational institution, since no such expenditure is required to be incurred by an educational institution. Such....
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....MT brand name. Though in the assessment order, the Assessing Officer observed that this expenditure indicated the commercial and non- charitable motive of the assessee, this observation formed the sole basis for the disallowance, without anything having been brought by the Assessing Officer on record as to how such expenditure was not in line with the aforesaid object of the assessee trust. Therefore, as rightly held by the Ld. CIT (A), there was no occasion for making any ad hoc disallowance and, accordingly, the Ld. CIT (A) correctly deleted the disallowance made by the Assessing Officer. As such, finding no merit therein, ground No.2 is also rejected. 12. Apropos ground No.3, the department's case is that while wrongly allowing exemption u/s 11 and 12 of the Act to the assessee, the Ld. CIT (A) has erred in ignoring the fact that the assessee was not recognized in India and the courses are commercial in nature. 13. Here, it is seen that the Ld. CIT (A) has correctly placed reliance on the decision of the Hon'ble Delhi High Court in 'Delhi Music Society vs. DGIT', 204 Taxman 231 (Del). Therein, reliance was placed on 'Loka Shikshana Trust vs. CIT', 101 ITR 234 (SC), where i....