9911796707
Advanced Search 
TMI Blog2014 (6) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... institution exceed Rs. 1 crore. 5. On the facts and in circumstances of the case and when the assessee has got income from Development fees, special fees and other fees etc., mentioned in para 7.1 of the assessment order and when it has been held by the Hon'ble Income Tax Appellate Tribunal, Hyderabad in their order in the case of Vasavi Academy of Education, Hyderabad in ITA No. 1120/Hyd/2009, that the assessee would not be entitled for exemption either u/s 11 or u/s 10(23C) in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc., over and above the prescribed fees for admission of students, under that circumstance, the CIT(A) is not justified in directing the AO to allow exemption u/s 11 of the IT Act, 1961, to the assessee in this case. 6. On the facts and in circumstances of the case and when as per the statement of computation of total income dt. 24-9- 2010, signed by its General Secretary, filed by the assessee during the assessment proceedings, it has claimed depreciation, the CIT(A) is not justified in deleting the disallowance of depreciation made by the AO in the assessment. 2. Briefly the facts of the case are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issed. 6. Ground No. 5 is pertaining to the denial of exemption u/s 11 on the ground that the assessee had extended benefit to specified persons as defined u/s 13(3) of the Act. 7. Briefly, the facts are that the assessee had waived the fees of six children of persons specified u/s 13(3) with total fee concession valued at Rs. 4,08,500/-. The assessee had also provided fee concession or benefits, valued at Rs. 36,95,500/- to children of staff and concession or benefits, valued at Rs.36,95,500 to children of staff and teachers and to students from economically backward class, though the assessee could not provide any details of such students from economically backward classes. The assessee had claimed that fees concession had been provided to the children of staff and teachers to boost their moral and also to ensure that they gave their best to the organization and continued with the organization in the long run. With regard to the fees concessions to children of persons specified u/s 13(3), the assessee submitted that it was not an unreasonable benefit since they were not drawing any remuneration from the assessee. The assessee relied on the decision in the case of DIT v Pariwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e specified persons would not disentitle the assessee to the exemption u/s 11 but merely that the value of such facilities shall be deemed to be the income of the assessee. The value of such facilities have been computed by the Assessing Officer at Rs. 4,08,500/-. The CIT(A), therefore, directed the Assessing Officer to bring to tax this sum as the income of the trust. 9. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 10. We have heard both the parties, perused the record and gone through the orders of the revenue authorities. The allegation of the AO is that the assessee has waived the fees of Rs. 4,08,500/- of six children of persons specified u/s 13(3) of the Act, who are children of teachers and staff those who have completed continuous service. There is no dispute on this issue. Being so, the AO denied the exemption u/s 11 to the assessee. Whereas the CIT(A) observed that the assessee cannot be denied exemption u/s 11 on this reason as the total fees concession granted to the persons specified u/s 13(3) has to be considered as income of the assessee. He, therefore, directed the AO to bring to tax the sum of Rs. 4,08,000/- as the income of the trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the assessee in getting exemption u/s 11 of the Act. Accordingly, we set aside the order of the CIT(A) on this issue and direct the AO not to grant exemption u/s 11 of the Act to the assessee. To come to this conclusion, we take support from the judgement of Jurisdictional High Court in the case of i) T. Bapanaiah Vidyadharma Trust Vs. CIT, [1987] 167 ITR 482 (AP) and ii) in the case of CIT Vs. Gurukul Ghatkeswar Trust, [2011] 332 ITR 611 (AP). Accordingly, this ground of appeal of the revenue is allowed. 11. The sixth ground of appeal relates to the disallowance of depreciation of Rs. 2,01,71,596/-. 12. The AR submitted before the Assessing Officer that the assessee had debited depreciation to its Income & Expenditure account but had not claimed any depreciation in its computation of income. The Assessing Officer relied on the decision in the cases of Escorts Ltd v Union of India 199 ITR 43 (SC) and of the jurisdictional ITAT in the case of Exhibition Society (ITA No.1195/Hyd/09, dt.22.3.2012 and held that since the assessee had claimed the total value of the assets as applied for charitable purposes in the year of acquisition, the claim of depreciation could not be allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually allowed as expenditure. If not so allowed in the year of acquisition, assessee will be entitled to depreciation. Further, it was held by the Cochin Bench of the Tribunal in the case of Dy. CIT V/s. Adi Sankara Trust (46 SOT 230) that where an assessee trust is claiming depreciation on assets where cost of the relevant assets stood claimed as an application of income for a preceding and/or the current year under S.11(1), its claim under S.32(1)is eligible only in respect of business assets and where entire cost of the asset stands allowed by way of application of income under S.11(1), the depreciation claimed by the assessee under S.32(1) is not allowable as the trust is not undertaking any business activity. In view of the above, the Assessing Officer is directed to verify in respect of each asset on which depreciation claimed, whether the value of such asset was in fact allowed under S.11, and if it was so allowed, the depreciation would not be allowed in respect of such asset. Only if the value of the asset was not allowed as expenditure under S.11, the Assessing Officer is required to allow depreciation thereon, as per the rate applicable to those assets, as held in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
