AI Drafter 
TaxTMI 
TaxTMI 
2020 (5) TMI 371
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....1,53,830/- to Marleshwar Construction Pvt. Ltd. are eligible for investment u/s.11(5) of the I.T. Act and there is no violation of section 13 of the Act. 3.Whether on the facts and in the circumstances of the case and in law the Ld.CIT(A) erred in holding that development fee of Rs. 38,34,640/- as corpus in nature. 4. Whether on the facts and in the circumstances of the case and in law the Ld.CIT(A) erred in holding that depreciation of Rs. 78,27,777/- in respect of assets which are already claimed as application of income." 2. The brief facts in this case are that the assessee is a public charitable trust engaged in imparting education to students enrolled in its institutions as per govt. policies. The original ROI was filed declaring total loss at Rs. 1,23,69,555. This ROI was beyond the due dates mentioned in sec. 139(1) & 139(4) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The ROI was processed u/s.143(1) of the Act on 24/03/2008. The Assessing Officer reopened the assessment u/s.147 of the Act vide notice dated 23/10/2009. However, there was no compliance from the assessee in the form of a return to be filed in response to the same. ....
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.... also certain restrictions on the utilisation of development fees on the management. The Assessing Officer was of the view that the development fee goes towards the earmarked funds and not corpus donation. The Assessing Officer was of the view that the corpus funds are towards the overall objects of the trust and on the other hand, the development fees being for specific purposes cannot be said to be corpus donations. The Assessing Officer therefore assessed the development fees received as income of the assessee trust. 5. The Assessing Officer noted that the assessee has set apart 15% of the amount to be carried forward to subsequent years, however, no notice in Form 10 u/r 17 was given to the Assessing Officer and there is also no record of the same in the minutes of the trust. The Assessing Officer held this to be in contravention to see 11(2)(a) and therefore denied the benefit of 15% set aside. This has resulted in an addition of Rs. 38,75,710/-. The Assessing Officer further held that the assessee has claimed application of income on account of addition to capital assets at Rs. 91,10,210/- and at the same time claimed depreciation on the same at Rs. 78,27,773/-. Applying t....
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....td., the Ld. CIT(Appeals) relying on the decision of the Pune Bench of the Tribunal in assessee's own case in ITA No.892/PN/2012 vide Para 5.2.5 has held and observed as follows: "5.2.5 It could be further observed that the transactions with Marleshwar Construction Pvt. Ltd, the advances given for purchase of land, advances given for purchase of car has also been held in favour of the appellant by the ITAT. The total addition made by the AO on these issues of Rs. 21,53,830 has no legs to stand on facts and therefore the addition is deleted. Ground 6 is allowed." 8. With regard to ground No.3 i.e. development fee of Rs. 38,34,640/- as corpus in nature, at Para 5.2.7, the Ld. CIT(Appeals) has held as follows: "5.2.7 Let me now consider the matter of development fees collected. The appellant stated to be towards corpus donations while the AO held them to be revenue receipts. The reason the AO held so was based on the guidelines of the HRD Ministry which allows the appellant to collect tuition fees as well as development fees which go towards recoupment of the capital cost. This itself would indicate that the donations are towards the capital of the trust and not v....
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....3 of the Act in the case of the assessee as has been held by the Pune Bench of the Tribunal in assessee's own case in ITA No.892/PN/2012 (supra.) in the 12A matter. Therefore, addition made was deleted by the Ld. CIT(Appeals). 9. With regard to ground No.4 i.e. depreciation of Rs. 78,27,777/- in respect of assets which are already claimed as application of income, at Para 5.2.6, the Ld. CIT(Appeals) has held and observed as follows: "5.2.6 It now remains to discuss the issue of development fee and the issue of depreciation disallowed by the AO. The issue of claim of depreciation on the capital assets purchased by the appellant and claimed as application of income is now settled squarely in favour of the appellant by the decision of the Hon'ble Bombay High Court in the case of Shri Vile Parle Kelavani Mandal (2015) 58 taxmann.258 (Bom.). Quoting from the same: Section 32, read with section 11, of the Income Tax Act, 1961- Depreciation- Allowability of (Trust)- Assessee trust acquired assets from income of trust- Assessee claimed deduction on account of application of income- It claimed depreciation on use of said assets- Whether such depreciation claim did not m....