TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1482
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....ty for its student for which separate fees charged. During the scrutiny of the return of income of the assessee for the assessment year 2010-11, Ld. AO disallowed a sum of rupees 1,73,20,960/-in relation to the activity of the assessee running the school buses, on the premises that the said activity amounts to a business in view of the proviso to Section 2 (15) of the Act, as such the assessee is not entitled for exemption under section 11 (4A) of the Act. To reach this conclusion, Ld. AO noted that surpluses generated from running of transport business, the surplus generated is not distributed to the students nor was reduced from the fee of the next year, the institution can run without the transport facility, the education fee structure i....
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.... assessee and not a charitable one as claimed by them; and that the assessee is not entitled for exemption under section 11(4A) of the act. 5. Aggrieved by the impugned order, assessee preferred this appeal before us stating that the income from transport activities is an integral part of educational activity of school which cannot be separated from the educational activity and the schooling in this particular case, as such, the activity of running school buses clearly falls within the meaning of the word 'education' within the meaning of Section 2(15) of the Act. 6. Submissions on behalf of the assessee are fourfold, namely, that the activity of running school buses is intrinsic part of the activity of running a school; the dominant obje....
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....the salary of 7 drivers. The contention of the assessee that 37 buses cannot be run by 7 drivers goes uncontradicted. Further AO did not bring on record as to the use of the vehicles for any other purpose than the conveyance of the children and further its repair and periodical maintenance. It is not the case of the revenue also that the assessee has been deriving any income from the use of these vehicles other than collecting the fees from the students for their transport facility. It is, therefore, clear that the material on record suggests that all the buses are being used only for providing facility to the students and staff that also only for transport to and from the school to the respective houses of the children in the given routes.....
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....these hostels to the students who are not parted education in 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 Institu....
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....lopments too where in the recently introduced new legislation of Goods and service tax it is provided that no GST would be chargeable on the hostel fees etc recovered from the Students , faculties and other staff for lodging and boarding as they are engaged in education activities . Therefore we reverse the finding of the lower authorities and held that transport and hostel facilities surplus cannot be considered as business income of the assessee society which is mainly engaged in business activities and these activities are subservient to the main object of education of the trust. 11. In Kanha Charitable Trust Vs. ACIT ITA Nos.3297 & 5987/Del/2015, while placing reliance on its earlier decision in the case of Krishna Charitable Society ....