AI Drafter 
TaxTMI 
TaxTMI 
2015 (10) TMI 1891
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....Education [CBSE], Delhi vide their letter dated 11.6.10. (i) Alternative Ground: That the Ld. AO/CIT(A) has not appreciated the fact that in the year under appeal the amount spent at Rs. 9,18,960/- is a capital expenditure. (ii) That the Ld. AO/CIT(A) has not appreciated the fact that the appellant has not claimed depreciation before functioning of the school. (iii) That the capital expenditure at Rs. 9,18,960/- is not taxable in the year under appeal. (iv) That the Ld. AO/CIT(A) both have accepted the capital contribution at Rs. 10,99,500/-." 2. At the outset, the learned counsel for the assessee states at the bar the ground nos. 3 & 5 are not pressed. Rejected as withdrawn. 3. The brief facts of the case are that duri....
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....e collateral security was observed as also furnished by the members of the family who had floated the assessee society. The AO observed that from the nature of the activities of the assessee society, of having created a charge on the property by the same persons, who were the founders of the society, it was abundantly clear the assessee society was not an educational society, but a family enterprise set up for the purpose of profit. Not even a single penny was observed as spent on education during the year and thus, the receipts, according to the A.O., could not be construed as exempt u/s 10(23) of the I.T. Act. It was held by the AO that in such circumstanes, as there was no beneficiary and the educational institution was not functional du....
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....assessment year, while in the assessee's case, there was neither any teacher, nor any staff member and even a single penny had not been spent for education; that in such a situation, the receipts of the assessee could not be construed as exempt u/s 10(23C)(iiiad) of the Act; that in the case of 'CIT vs. Sree Narayana Chandrika Trust', 212 ITR 456 (Kerala), it has been held that the work relating to the hospital started in the year 1973, though it became functional as a hospital only on April 25, 1978 and that the Tribunal was justified in holding that the assessee was entitled to the exemption u/s 10(22A) for the years 1977-78 and 1979-80; that it has further been mentioned in the said judgment that the Tribunal found as a fact that the tru....
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....been filed. 6. On the other hand, the learned DR has placed strong reliance on the impugned order, contending that no educational purpose was carried out by the assessee during the year under consideration; that the assessee did not possess any corpus for carrying out any educational purpose; and that the assessee had taken loan only for profit, else why anyone would take a loan in order to do profit. 7. We have heared the parties and have perused the material on record. The learned CIT(A) has held that the assessee is not entitled to exemption u/s 10(23C)(iiiad) of the Act. As per this section, for exemption to be granted thereunder, the institution should be existing solely for educational purposes and its aggregate receipt should not ....
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....had floated the assessee society, clearly indicating that it was but a family enterprise of all the persons, who had founded it for purposes of profit. 8. In this regard, it is seen that the only activity carried on by the assessee during the year is that of construction of the school building. This fact remains undisputed by both the Taxing Authorities. Now, in 'Commissioner of Income Tax vs. Om Sarala Babu Educational Trust' rendered by the Hon'ble Allahabad High Court on 27.07.2014, in ITA No. 100/2014 (copy placed on record), the assessee had taken various steps, including the construction of the building of the school. The CIT(A) allowed a similar claim u/s 10(23C)(iiiad) of the Act. This was confirmed by the Tribunal. The order of ....