AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 194
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....- to M/s. Mars Catering Services Pvt. Ltd, and there being no contradiction of same, ld CIT(A) erred in facts and in law in allowing deduction for entire sum of Rs. 62,26,326/-." 3. Assessee is a registered Society assessed as resident; association of person filed its return of income on 13/10/2010 declaring nil income as it is registered under section 12 AA of The Income Tax Act [The Act]. It has gross receipt of INR 218557877/- and it disclosed deficit of Rs. 29017712/-. During course of assessment proceedings, only issue in dispute in appeal is disallowance of Rs. 6226326/- by learned assessing officer with respect to payment made to Mars catering services. 4. Brief fact shows that assessee incurred expenditure on students boarding ex....
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....y. Assessee explained rationale behind payment of above sum. However, learned assessing officer was of view that main purpose of all such debits is to allow undue monetary benefit to above company as an advance in garb of alleged agreement as such whole of amount is being disallowed. Consequently assessment order under section 143 (3) of income tax act was passed on 29/01/2013 determining total income of assessee at INR 8 068967/-. 5. Assessee aggrieved with order of learned AO preferred an appeal before learned CIT - A, Dehradun. Ld CIT (A) passed order dated 11/4/2014 deleting above disallowance holding that learned assessing officer has not doubted that society continues to impart education, it has been doing that for past many years. H....
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....n which share holding pattern shows shares of Anjali Tendulkar, wife of Shri Sachin Tendulkar holds 2, 50,000 shares, Shri Ajit Tendulkar holds 5000 shares and Sri Sanjay Narang holds 245000 shares. She further submitted that student of assessee was also residing in above hotel, which is owned by Mars catering services group. She therefore stated that apparently it is an agreement to operate hotel. She submitted that operating a hotel is not an educational activity. This cannot be a charitable object as per section 2 (15) of the act. Therefore, she stated learned assessing officer has correctly made that above disallowance. She submitted that learned CIT - A has not looked into above facts and merely stated that assessee is running a school....
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..... He further stated that except the students of school nobody else utilizes the above facilities. He submitted that facilities of hostel are art of the educational activity and supported it with many judicial precedents. He therefore stated that learned CIT - A has correctly allowed claim of assessee. 8. We have carefully considered rival contention and perused orders of lower authorities. Assessee is running a boarding school and teachers training College. It is a society registered under societies registration act as well as granted registration u/s 12 A of The act. Its main objects are promotion of Christian education according to ideals and essential beliefs held in common by different societies represented on general body of society a....
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.... services rendered as well as towards reimbursement of expenses incurred, total credit stood at INR 7 198470 including opening balance to credit of above company. Out of that 6819789/- was paid and still there is a credit balance of INR 3 78681/- outstanding as payable by society to Mars catering services. The ld Ao disallowed the above sum holding that such advances is for the benefit of Mar catering services and it is not for the object of trust assesse. Looking at the activity of the school, it is a boarding school and teachers training college. No doubt, it has hired a hostel for accommodation of student, which is a hotel. However, it is not doubted that such hotel is not used by assessee is a hostel. Catering services were part of the ....
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....ing facilities are incidental to education. No violation of section 13 has been pointed out by learned AO. In view of this, it cannot be said that expenditure incurred by assessee is not for purpose of education. For all these considerations as stated above learned CIT - A has deleted addition. Merely because some celebrities are holding shareholding in one of entities to which assessee society has engaged for provision of services does not make any difference in allowance or disallowance of a particular expenditure for object of society. Further, merely because a hotel is rented by assessee society for using, as a hostel for student, does not make any difference, as far as student of the society exclusively uses the same. These facts do no....