2017 (11) TMI 1650

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nt material on records. 2. That the Learned Commissioner of Income-tax ( Appeals) has grossly erred in confirming the additions made by A.O. holding that hostel/ mess facility for students is separate business activity in terms of section 11(4A) merely on irrelevant consideration like surplus should have been reimbursed to students or used to reduce fee or giving contents of some website about fall in demand for rooms at Meerut etc, even after accepting that maintenance of such hostel is mandatory as per the concerned controlling Authority and it was an integral and inalienable part of educational activity. Thus finding is perverse. 3. That the learned assessing officer has failed to appreciate the fact that maintaining hostel/mess facility to students is an essential & integral part of "education" u/s 2(15) of the Act and not a separate business activity covered under section 11(4A) as also accepted in the past assessments and there is no change in law about the first three limbs of section 2(15) even after 01.04.2009, , hence overall surplus of the society as worked out in Income & Expenditure account of the society and consequently used and invested in the fulfillment of the m....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ut fall in demand for rooms at Meerut etc, even after accepting that maintenance of such hostel is mandatory as per the concerned controlling Authority and it was an integral and inalienable part of educational activity. Thus finding is perverse. 3. That the learned assessing officer has failed to appreciate the fact that maintaining hostel/mess facility to students is an essential & integral part of "education" u/s 2(15) of the Act and not a separate business activity covered under section 11(4A) as also accepted in the past assessments and there is no change in law about the first three limbs of section 2(15) even after 01.04.2009, , hence overall surplus of the society as worked out in Income & Expenditure account of the society and consequently used and invested in the fulfillment of the main objectives of the society resulting into application of income and as such exempt under the provisions of section 11 to 13 of the Act and learned Commissioner of Income- tax (Appeals) has also confirmed the view taken by Assessing officer. 4. That the Learned Commissioner of Income-tax (Appeals) has also erred on facts and in law to confirm the disallowance made by Assessing officer Rs. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....her disallowed the depreciation of Rs. 2019769/- relying on the decision of the Hon'ble Supreme Court in case of Escorts Ltd and Hon'ble Kerala High Court in case of Lissie Medical Institution. 6. Assessee aggrieved with the order of the ld Assessing Officer preferred appeal before the ld CIT(A), who vide order dated 02.03.2015 dismissed the appeal of the assessee. 7. Aggrieved the assessee preferred appeal before us. 8. The limited issues in the present appeal is whether the hostel facilities provided to college students is part of the „educational activity‟ of the assessee or is carried out as business by the appellant society. If it is a business then whether the assessee should have maintained a separate books of account or not. The second issue involved in the appeal is that assessee is entitled to deprecation of Rs. 18991092/- as debited in the income and expenditure account. 9. On the first issue the ld Authorised Representative submitted that now the above issue is covered in favour of the assessee in view of the decision of Hon'ble Karnataka High Court in CIT Vs. Karnataka Lingayat Education Society ITA No. 5004/2012 dated 15.10.2014 wherein, it....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....gy v. State of U.P. (1976) 38 STC 428 (All) with respect to the visitors' hostel maintained by the Indian Institute of Technology where lodging and boarding facilities were provided to persons who would come to the Institute in connection with education and the academic activities of the Institute. It was observed that the statutory obligation of maintenance of the hostel, which involved supply, and sale of food was an integral part of the objects of the Institute nor could the running of the hostel be treated as the principal activity of the Institute. The Institute could not be held to be doing business. Further meals being supplied in a hostel to the scholars, visitors, guest faculty etc. can not be exigible to sales tax where main activity is academics as held in Scholars home Senior Secondary School 42 VST 530. Further, the reliance placed by the lower authorities on the decision of the Hon'ble Madras High Court in case of DCIT versus Wellington charitable trust is also misplaced because in that case, the only activity of that particular trust was renting out of the property and not education. We are also not averse to considering the latest legal developments too where in....