9911796707
TMI Blog2014 (1) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the purpose for which it is collected - When the collection is meant for being spent on activities in the capital filed, the same cannot be treated by the Assessing Officer as revenue receipt. Depreciation on assets treated as application of income - Held that:- Following CIT vs. Tiny Tots Education Society [2010 (7) TMI 377 - Punjab and Haryana High Court] - The income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purposes of the trust - No double benefit is given in allowing claim for deprecation for computing income for purposes of Section 11 - Decided against Revenue. - ITA No. 4476/Del/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer observed that assessee has received Rs. 66,25,049/- which has been directly taken to the balance sheet as liability under the head 'Development Fund'. AO was of the opinion that this was not appropriate and he was of the opinion that this should be added to the total income, since development fund is collected from students and form part of fees. Assessee responded as under:- "As far as your query regarding non-consideration of Development Fund in receipt vide query No. 8 is concerned, it is submitted that as per the direction issued by the Directorate of Education the school is entitled to collect development fee for the purpose of supplementing the resources for purchase, upgradation and replacement of furniture, fixture and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with regard to the fact that the fund so collected should be specifically incurred for the purpose for which it is collected but does not says that the same will not be included in the receipts as per Income Tax Act. Therefore, he added the same to the total receipts of the assessee. 4. Against the above order the Assessee appealed before the Ld. CIT(A). Ld. CIT(A) upon perusal of the detailed submissions filed by the assessee held as under:- "I have gone through the finding of the AO in the assessment order and written submission of the Ld. AR. In this regard, I have also verified the copy of balance sheet filed along with the submission available at page no. 41 of the paper book, wherein, amount of development fund amounting to Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For all these activities the school collected the development fund which was treated as capital fund being earmarked for development of the aforesaid activities. The expenditure incurred in this regard was also debited to the fund and the amount was kept separately for development activities of the school. The above has not been disputed by the Ld. DR also. In this view of the matter, we agree with the contention of the assessee that the fund is capital field receipt being amount collected for various development activities. 6.1 Furthermore, we also note that this system of accounting has been followed by the assessee in earlier period also and the same was not disturbed by the Revenue. 6.2 No cogent reason for deviating from the past h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of depreciation by the assessee amounts to claim of double deduction. However, upon careful consideration, we find that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Tiny Tots Education Society. In this case, the Hon'ble High Court has observed as under:- "In the present case the assessee is not claiming deduction on account of depreciation as has been suggested by learned counsel for the Revenue. The income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purposes of the trust. There is no double deduction cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
