TaxTMI 
TaxTMI 
2010 (3) TMI 1201
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....ss Receipts of the Appellant Educational Society for the assessment years in question including the additions made by the Assessing Officer were all below on crore as tabulated below and therefore the learned CIT(A)-IV, Hyderabad ought to have clearly held that the Appellant's society's income was exempt u/s. 10(23C)(iiiad) of the IT. Act, 1961- Gross Receipts as Disclosed by Appellant Rs. Additions to Receipts made by A.D.I.T. (Exemptions)-I, Hyderabad Rs. Total Receipts Rs. 24,47,168 20,51,751 44,98,919 29,12,879 23,63,652 52,76,531 33,09,475 28,83,658 59,93,133 35,19,424 21,01,254 56,20,678 3. The learned CIT(A) IV, Hyderabad in holding that the Appellant society's- (i) is running an educational Institution as a commercial venture; (ii) Real purpose was to create Assets in the name of Interested persons. (iii) Charitable purpose is only in name's sake, whereas the ultimate beneficiaries are the family members who own the Assets; (iv) Educational institution does not exist solely for Education purpose; is totally contrary to the facts and evidence on record and is wholly unsustainable. 4. The order of the learned CIT(A)-IV, Hyderabad in ho....
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....sing Officer rejected the claim of the assessee for exemption under S.10(23C)(iiiad) of the Act, mainly on two grounds. The first ground on which the Assessing Officer refused exemption to the assessee society is that the land on which the school building was constructed was not owned, but taken under an oral lease from the sons of the principal of the school of the assessee society, and accordingly, the land does not belong to the assessee society. The second ground on which the exemption was denied to the assessee was that the principal was paid a salary of ₹ 10,000 per month, and therefore, he was given pecuniary benefit, which is in contravention of the statutory provisions of S.13 of the Act The learned counsel for the assessee submitted that merely because the land on which the school building was constructed was obtained by the assessee society under an oral lease form the sons of the principal, the revenue authorities are not justified in denying exemption to the assessee society. He submitted that a written agreement of lease was also executed between the assessee and the owners of the land on 11.7.2005, which could not, however, be registered. He submitted that on 8....
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.... nature of building fund collected by the assessee, does not arise for consideration by this Tribunal, as the Revenue has not preferred any appeal against the finding of the of the CIT(A) on that aspect that the amount collected in the name of building fund by the assessee is nothing but admission fees only, and consequently, the finding of the CIT(A) in that behalf has become final. 7. We have considered the rival submissions carefully We find that there is no dispute in this case regarding the objects of the assessee society being charitable in nature. The assessee society was registered under the Societies Registration Act on 15.6.1986 and was running a school since then. Survey action under S.133A was conducted on the premises of the assessee on 7.11.2002, and thereafter a notice under S.148 was issued to the society, in response to which assessee has filed its return of income declaring an income of ₹ 28,189. The only dispute before us is regarding the denial of the assessee' s claim for exemption under S.10(23C)(iiiad) of the Act. The case of the assessee is that surplus of income was less than ₹ 1 crore and therefore, there was no necessity for the assessee ....
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....e is not genuine. Accordingly this objection of the Assessing Officer regarding non-ownership of the land by the assessee and the land belonging to the relatives of the principal/secretary of the society is not sustainable. As for the other objection of the Department based on the fact that the principal/secretary was paid monthly salary of ₹ 10,000 for his services, we find that the Department has not doubted the fact that the person concerned has rendered his services as principal of the educational institution. The amount of salary paid at ₹ 10,000 per month could not be said to be excessive considering the activities of the school run by the assessee society. In these facts of the case, we hold that the reasoning given by the Department for rejecting the assessee's claim for exemption under S.10(23C)(iiiad) is not sustainable. Accordingly, we hold that the assessee society is entitled to exemption under the provisions of S.10(23C)(iiiad) of the Act, as the other conditions, admittedly, are fulfilled by the assessee society. 8. As for the argument of the Learned Departmental Representative that the assessee has collected building fund and therefore the assessee ....
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.... is the quantum of amount charged. In the facts of the present case, we hold that on merits also, assessee deserves to succeed, as charging of a small amount ranging from ₹ 1,000 to ₹ 2,500 could not be termed as capitation fee. In the facts and circumstances of this case, the ratio of the decision of the Hyderabad Bench of the tribunal in the case of Vasavi Academy of Education, Hyderabad (supra), relied upon by the Learned Departmental Representative, is not applicable to the facts of the present case. 10. In the light of the above discussion, we hold that the assessee is entitled for exemption under S.10(23C)(iiiad) of the Act, and accordingly allow the grounds of the assessee on this aspect. In view of our finding on the issue of assessee's entitlement for exemption under S.10(23C)(iiiad) of the Act, we are not inclined to go into the contentions of the assessee with regard to allowability of assessee's claim for depreciation on school building. 11. Ground of appeal No.5 of the assessee s as under- "5. The order of the learned CIT(A)-IV, Hyderabad in holding the fees collected by the Appellant society in the name of Building Fund at ₹ 3,25,000....