TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 425
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....ppeals. 2. Brief facts of the case are that the assessee is a society, engaged in educational activities and are running the educational institutions. For the assessment year 2011-12, they have filed their return of income on 21/7/2011 declaring nil income. By order dated 28/2/2014, learned Assessing Officer assessed the income of the assessee at Rs. 1,61,26,450/- by making certain additions which includes, for the purpose of this appeal is of Rs. 1,98,64,393/-by disallowing the depreciation claimed by the assessee in respect of the assets acquired by the assessee in application of the funds, Rs. 1,57,47,296/- on account of surplus of hostel receipts by treating it as business income, and also a sum of Rs. 3, 79, 156/- on account of disal....
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....nt of disallowance of depreciation is concerned, learned Assessing Officer had disallowed the depreciation as application of income by following the decisions in the case of Escorts Ltd (supra) and also the decision of the Hon'ble Kerala High Court in the case of Lissie medical institutions vs. CIT 348 ITR 344 (Kerala). 6. Ld. CIT(A), on a consideration of the facts and circumstances of the case, observed that the decisions of the Hon'ble Apex Court in the case of Escorts Ltd (supra), the decision of the Kerala High Court in the case of LissieMedical Institutes (supra) and also the decision of Hon'ble Delhi High Court in the case of ChiranjivCharitable Trust in ITA No. 322- 323/2013, dated 18/3/2014 were discussed by the Hon'ble jurisdicti....
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....ot be termed as education and the contentions of the assessee on this aspect are not tenable in the facts and circumstances of the case and also in view of the legal position. Ld. CIT(A) however reduced the disallowance as stated above. 10. It is the submission of Ld. AR that this issue also is no longer res Integra in view of the decision of the Hon'ble Karnataka High Court in the case of CIT vs. Karnataka Lingayat education society in ITA No. 5004/2012 dated 15/10/2014 followed by the coordinate benches of this Tribunal in a number of matters. He brought to our notice the view taken by the coordinate benches of this Tribunal in the case of Delhi public school vs. ACIT in ITA No. 3593/del/2015 for the assessment year 2010-11 and also in M....
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..../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 Institute cannot be considered as business activity but is subservient to the object of educational activities performed by the society. We are also supported by our view by the decision of the Hon'ble Allahabad High Court in IIT versus state of UP, (1976) 38 STC 428 (All) wherein question arose in Indian Institute of Technology v. State of U.P. (1976) 38 STC 428 (All) with respect to the....
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....ities 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 Vs. ACIT it was held that in the absence of any clinching evidence to show that the hostel facilities and transport facilities were provided to anybody other than students and staff of the trust. The transport and Hostel facilities provided by the educational institution shall be construed to be the intrinsic part of the 'educational activities' of the assessee and they cannot be....
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....chaptered flight). Both the authorities below held that the travel by chartered flight is an unreasonable expenditure particularly by an assessee who enjoys tax benefit for charitable activities and such an expense by the office bearer cannot relate to charitable activities/objectives of the society. 14. Ld. AR submitted that unless and until the authorities below return a finding that the expenditure is bogus or that it has no nexus with the business of the assessee, it cannot be said that such an expense is not allowable. He submitted that the purpose of travel was to join a meeting with Institute of Management, Hyderabad and other institutes to meet with the requirement of smooth/affective running of Institute for better academic and ad....