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TMI Blog2007 (9) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... n with a view to expand the institution and to earn more income. - Exemption under section 10(23C) (iiiad) not available - 103 and 104 of 2007 - - - Dated:- 24-9-2007 - P. C. VERMA and M. M. GHILDIYAL JJ. Arvind Vashistha for the Revenue. S. K. Srivastava for the respondents JUDGMENT 1. Both these appeals, preferred by Revenue under section 260A of the Income-tax Act, 1961, involve a common question of law based on common set of facts and, therefore, are being decided by one and common judgment Appeal No 103 of 2007 is directed against the consolidated judgment dated July 7, 2006, of the Income-tax Appellate Tribunal, Delhi Bench 'B', New Delhi (for short, "the ITAT") passed in I. T. A. Nos. 2191 and 2189 (Delhi) of 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,12,704.80 12,29,531.54 7,58,397.20 5,85,764.56 11,41,275.76 10,40,501.92 8,00,908.40 5,89,670.90 5,80,858.21 -10,43,962.20 -32,797.12 52,86,623.14 1,68,726.30 4,906.35 3. The Assessing Officer assessed both the assessees rejecting the exemption as claimed, against which appeals of the assessees were allowed by the Commissioner of Income-tax (Appeals). Then the Revenue filed appeals before the Income-tax Appellate Tribunal, which were dismissed. 4. The Income-tax Appellate Tribunal having rejected the contentions of Revenue in this regard, the Department has come up in appeal before us. 5. We have heard learned counsel for, the parties and perused the record. 6. The following quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn property, acquire computers, library books, sports equipments, etc., for the benefit of the students. And more importantly the members of the society have not utilized any part of the surplus for their own benefit. The Assessing Officer wrongly interpreted the resultant surplus as the main objective of the assessee-trust. As held above, profit is only incidental to the main object of spreading education. If there is no surplus out of the difference between the receipts and outgoings, the trust will not be able to achieve the objectives. Any educational institution cannot be run in rented premises for all times and without necessary equipment and without paying to the staff engaged in imparting education. The assessee is not getting any f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity lawfully carried on by the educational institution, it will not cease to be one, existing solely for educational purposes since the object is not one to make profit. The decisive or acid test is whether on an overall view of the matter, the object is to make profit. In evaluating or appraising the above, one should also bear in mind the distinction difference between the corpus, the objects and powers of the concerned entity." 9. If one looks at the objects clause, there are other noble and pious objects but the assessee-society has done nothing to achieve the other objects except pursuing the main object of providing education and earning profit. Further, with profit earned the society has strengthened or enhanced its capacity to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative test is applied to societies, even school which are run on commercial basis making profit would go out of the purview of taxation and would demand exemption." 12. In our considered opinion, the ratio of the aforesaid judgment fully applies in the present case, may be the said observation has come in a matter of levy of tax by the municipal corporation. We may further add that the investment in the fixed assets like furniture and buildings are the properties of the society and may be connected with the imparting of education but the same has been constructed and purchased out of income from imparting the education with a view to expand the institution and to earn more income. 13. For the reasons recorded above, the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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