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TMI Blog2015 (10) TMI 1891X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court. No decision to the contrary has been brought to our notice. It thus cannot, on facts, be said that during the year, the assessee institution did not exist solely for educational purposes. All the other distinctions sought to be made out by the learned CIT(A) do not act detrimental to the claim of the assessee, particularly when the expenses incurred were expenses incurred only on account of bank charges and interest, books and periodicals and purchase of dresses and lease rent and nothing else. Apropos the donations too, the affidavits of the donors were simply rejected summarily, without controverting the contents thereof and without showing the donations to be sham. It is pertinent to note that the capital contribution of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the assessee states at the bar the ground nos. 3 5 are not pressed. Rejected as withdrawn. 3. The brief facts of the case are that during the assessment proceedings, it was noticed by the AO that the main aims and objective of the assessee society was to impart education. The assessee alleged to have received donations from 112 persons in cash, for a total amount of ₹ 10,99,500/-. Against such receipts, the assessee society claimed expenses on account of bank charges and interest, books and periodicals, purchase of dress and lease rent. The excess of income over expenditure of ₹ 9,18,956/- alongwith unsecured loan of ₹ 2,00,000/- and secured loan of ₹ 19,13,547/- from OBC, Sardulgarh were show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strued as exempt u/s 10(23) of the I.T. Act. It was held by the AO that in such circumstanes, as there was no beneficiary and the educational institution was not functional during the year, the claim of exemption u/s 10(23C)(iiiad) was wholly misplaced and that thus, it could not be allowed. 4. During the appellate proceedings before the CIT(A), the assessee contended that the exemption u/s 10(23C)(iiiad) of the Act was claimed, as its total receipts did not exceed Rs. one crore and it existed solely for the purpose of education, and not for the purpose of profit; that the society incurred expenses on books and periodicals, dress purchase, bank interest and charges and lease rent, in as much as secured and unsecured loans were used for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled to the exemption u/s 10(22A) for the years 1977-78 and 1979-80; that it has further been mentioned in the said judgment that the Tribunal found as a fact that the trust joined the firms as partner only to raise income for the purpose of running the hospital; that however, in the present case, the funds have not been utilized in a manner so as to earn any income therefrom; that in the case of American Hotel Lodging Association Educational Institute vs. CBDT Others , 301 ITR 86 (SC), the question involved was whether the institution existed solely for educational purposes and not for profit; that in the case under consideration, the AO found that the loan had been sanctioned by the bank for construction of the school building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. As per this section, for exemption to be granted thereunder, the institution should be existing solely for educational purposes and its aggregate receipt should not exceed the amount prescribed. It is nobody s case that the aggregate receipt of the assessee institution exceeds the amount prescribed. Now, the only other thing required to be considered is, as to whether during the year, the institution existed solely for educational purposes and not for purposes of profit. The case of the assessee is that during the year, it had received donations amounting to ₹ 10,99,500/-. Thereagainst, it had claimed expenses on account of bank charges and interest, books and periodicals, purchase of dress and lease rent. The excess of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... steps, including the construction of the building of the school. The CIT(A) allowed a similar claim u/s 10(23C)(iiiad) of the Act. This was confirmed by the Tribunal. The order of the Tribunal was confirmed by the Hon ble High Court. No decision to the contrary has been brought to our notice. It thus cannot, on facts, be said that during the year, the assessee institution did not exist solely for educational purposes. All the other distinctions sought to be made out by the learned CIT(A) do not act detrimental to the claim of the assessee, particularly when the expenses incurred were expenses incurred only on account of bank charges and interest, books and periodicals and purchase of dresses and lease rent and nothing else. 9. Apropos t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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