TaxTMI 
TaxTMI 
2021 (8) TMI 871
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....he case are that assessee is a society and is registered under the provision of Society Registration Act. The assessee is also having registration under section 12AA. The assessee is running an educational institution. For assessment year 2014-15, the assessee filed its return of income declaring NIL income. The case was selected for scrutiny. During the assessment the assessing officer (AO) noted that assessee has charged excess fees in addition to the fees prescribed by State Government. The AO treated the said excess fees as capitation fee as income of the assessee and treated it as business receipt. The AO also noted that assessee has availed unsecured loan from two creditor and included share premium. The AO treated the said loan amount as unexplained cash credit by treating that loan as accommodation entry and added the same under section 68. Further, the AO did not allow depreciation on the usage of fixed assets by taking a view it is a double deduction. 3. On appeal before Ld. CIT(A), all the additions / disallowances were deleted. 4. Aggrieved by the order of ld CIT(A), the revenue has filed present appeal before this Tribunal. 5. We have heard the submission of L....
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....t which the assessee has made application on revenue account including depreciation of Rs. 1.79 crore. The assessee further applied Rs. 90.08 lacs for creation of fixed assets, thereby made a total application at Rs. 6,65,05,627.53 (i.e. 90,08,265,00 + 5,74,97,362.53). We find that the AO has not doubted the charitable activities of the assessee. Further the ld CIT(A) has clearly held that the assessee has applied more than 85% of total receipt for its object. Thus, the predominant object of the assessee has been fulfilled. Hon'ble Supreme Court while discussing the scope of section 10(23C)(iiiad) and (iv) as under :- "(1)Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit. (2) The predominant object test must be applied - the purpose of education should not be submerged by a profit making motive. (3) A distinction must be drawn between the making of a surplus and an institution being carried on "for profit". No inference arise....
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....e on depreciation was made in assessment year 2013-14, on appeal before the Ld. CIT(A), the assessee was allowed depreciation. Further aggrieved the revenue filed appeal before Tribunal vide ITA No. 2284/Del/2017. However due to inadvertent omissions, the grounds of appeal remain unadjudicated. We find that no further miscellaneous application (MA) is filed by any of the parties for bringing the mistake apparent on record to the notice of Tribunal. However we find that on similar question of law the Hon'ble Bombay High Court in CIT Vs Institute of Banking Personnel Selection (IBPS) (2003) 131 Taxman 386 (Bom) passed the following order. "3. As stated above, the first question which requires consideration by this Court is; whether depreciation was allowable on the assets, the cost of which has been fully allowed as application of income under section 11 in the past years? In the case of CIT v. Munisuvrat Jain 1994 Tax Law Reporter, 1084 the facts were as follows. The assessee was a Charitable Trust. It was registered as a Public Charitable Trust. It was also registered with the Commissioner of Income Tax, Pune. The assessee derived income from the temple property which was ....
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....al principles after providing for allowance for normal depreciation and deduction thereof from gross income of the Trust. In view of the aforesatated judgment of the Bombay High Curt, we answer question No. 1 in the affirmative i.e., in favour of the assessee and against the Department. 4. Question No. 2 herein is identical to the question which was raised before the Bombay High Court in the case of Director of Income-tax (Exemption) v. Framjee Cawasjee Institute [1993) 109 CTR 463. In that case, the facts were as follows:The assessee was the Trust. It derived its income from depreciable assets. The assessee took into account depreciation on those assets in computing the income of the Trust.The ITO held that depreciation could not be taken into account because, full capital expenditure had been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The Appeal was rejected. The Tribunal, however, took the view that when the ITO stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets had been treated as &....