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TMI Blog2012 (4) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... under S.32(1) - Held that:- 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 the case of Mahila Sidh Nirman Yojna, cited supra. This issue raised by the Revenue is set aside to the file of the Assessing Officer for fresh consideration, in the light of the above observations. - 1440-1442/Hyd/2011, 1418/Hyd/2011, 1595- 1598/Hyd/2011, 1586/Hyd/2011, 1587-1589/Hyd/2011, 1599-1602/Hyd/2011, 1583-1584/Hyd/2011, ITA No.1440/Hyd/2011 & Others, 1603-1608/Hyd/2011 , 1657/Hyd/2011, 1585/Hyd/2011, 1609/Hyd/2011 to 1615/Hyd/2011 - - - Dated:- 9-4-2012 - CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER For the Petitioner : Shri V.Raghavendra Rao S.Rama Rao For the Respondent : Shri V.Srinivas ORDER PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of acquisition is treated as application of income as has been held in ruling of H ble Supreme Court of India in the case of Escorts Ltd., and another V/s. Union of India (199 ITR 44). 4. We have heard both the parties and perused the material on record. We have gone through the written submissions filed by the Learned Departmental Representative, besides the decisions of the Tribunal in similar matters filed before us. The main issue involved in this appeal relates to assessee s claim for exemption of its income under S.11 of the Act. We find that this main issue involved in the above grounds is covered by the order of the Hyderabad Bench A of the Tribunal dated 15.4.2009 in the cases of Vasavi Academy of Education, Hyderabad in ITA No.1133/Hyd/2006 for the assessment year 2003-04 and order dated 17.4.2009 in ITA No.1206/Hyd/2007 for the assessment year 2004-05, wherein it was held that if donations are received compulsorily for the admission of students, by whatever name it may be called, i.e. donation, building fund, auditorium fund, etc. over and above the prescribed fee, from the students, the assessee would not be entitled for exemption either under S.10(23C) or und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved any money over and above the fees prescribed and thereafter decide the issue afresh in accordance with law after giving reasonable opportunity of hearing to the assessee. We make it clear that the assessee is not entitled for exemption u/s 11 in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc. etc., over and above the prescribed fee for admission of students. 5. Before parting we may note that the learned counsel for the assessee submitted before us that only for quantification of the exemption under S.11, the issue may be set aside and not otherwise. On this issue, we find it appropriate to mention herein that the Hon ble jurisdictional High Court in the case of S.A. Rahim and Others V/s. CIT(333 ITR 379), held placing reliance on the earlier judgment of jurisdictional High Court in the case of CIT V/s. Krishna Mining Co. (107 ITR 702), that the Tribunal can go into the only issue raised before it and not on other issues. It was observed by the Hon ble High Court that the expression such order as it thinks fit in S.254(1) was wide enough to include the power of remand to the authority, competent to make the requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation on fixed assets is an allowable deduction, which is necessary to arrive at the income available for application to charitable purpose. Further, in the case of Mahila Sidh Nirman Yojna V/s. IAC (50 ITD 472), it has been held by the Delhi Bench of the Tribunal that merely because entire value of asset is allowable as expenditure under S.11, it is not sufficient to deny claim for depreciation unless the value of asset has been 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the assessee is not entitled for exemption u/s 11 in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc. etc., over and above the prescribed fee for admission of students. 11. The next issue involved in this appeal relates to the addition made on account of depreciation claimed by the assessee. We have dealt with this issue hereinabove, while dealing with the corresponding grounds of the Revenue in the appeals ITA Nos.1440 to1442/Hyd/2011 concerning Sri Venkata Sai Educational Society. For the detailed reasons discussed in that context, in para 7 hereinabove, we set aside the impugned orders of the lower authorities on this issue and restore the matter to the file of the assessing officer for fresh consideration. 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducation Another Vs. State of Karnataka and Another (supra), and in the cased of T.M.A. Pai Foundation and Others Vs. State of Karnataka and Others (Supra), and find out whether the assessee has received any money over and above the fees prescribed and thereafter decide the issue afresh in accordance with law after giving reasonable opportunity of hearing to the assessee. We make it clear that the assessee is not entitled for exemption u/s 11 in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc. etc., over and above the prescribed fee for admission of students. 15. The next issue involved in the appeals for the assessment year 2006-07 and 2007-08, and the only issue involved in the appeals ITA Nos.1508 and 1598/Hyd/2011 for assessment years 2008-09 and 2009-10, relates to the additions made on account of depreciation claimed by the assessee. We have dealt with this issue hereinabove, while dealing with the corresponding grounds of the Revenue in the appeals ITA Nos.1440 to1442/Hyd/2011 concerning Sri Venkata Sai Educational Society. For the detailed reasons discussed in that context, in para 7 hereinabove, we set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When the assessee claimed a particular receipt as non-taxable, as observed by the CIT(A), onus is on the assessee to prove that the same is not taxable as per the provisions of the Act. Assessee in the instant case has not been able to prove that the contributions received by it are not in the nature of capitation fee collected from students/prospective students or their relatives in the guise of donations. In the absence of any evidence filed by the assessee in that behalf, the assessing officer treated the same as the income of the assessee, and the CIT(A) too confirmed the addition made by the assessing officer in that behalf. However, considering the totality of facts and circumstances of the case, we set aside the orders of the lower authorities on this issue, and restore the matter to the file of the assessing officer, with a direction to the assessing officer to give one more opportunity to the assessee to file necessary evidence before the assessing officer, to prove that the donations received by the assessee were with a direction to form corpus of the assessee trust or that they are not in the nature of capitation fee received from students/prospective students or their r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cased of T.M.A. Pai Foundation and Others Vs. State of Karnataka and Others (Supra), and find out whether the assessee has received any money over and above the fees prescribed and thereafter decide the issue afresh in accordance with law after giving reasonable opportunity of hearing to the assessee. We make it clear that the assessee is not entitled for exemption u/s 11 in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc. etc., over and above the prescribed fee for admission of students. 22. The next issue involved in the appeals for the assessment year 2007-08 to 2009-10, and the only issue involved in the appeal ITA Nos.1599/Hyd/2011 for assessment year 2006-07 and 2009-10, relates to the additions made on account of depreciation claimed by the assessee. We have dealt with this issue hereinabove, while dealing with the corresponding grounds of the Revenue in the appeals ITA Nos.1440 to1442/Hyd/2011 concerning Sri Venkata Sai Educational Society. For the detailed reasons discussed in that context, in para 7 hereinabove, we set aside the orders of the lower authorities on this issue impugned in these appeals also and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove. The circumstances leading to the additions made by the assessing officer, contested in these appeals, and also the observations of the CIT(A) in the impugned order are similar to those noted in para 18 hereinabove. In this view of the matter, for the detailed reasons discussed in para 18 hereinabove, we set aside the impugned orders of the lower authorities on this issue, and restore the mater to the file of the assessing officer with a direction to give one more opportunity to the assessee to file necessary evidence before him, to prove that the donations received were with a direction to form corpus of the assessee trust and that they are not in the nature of capitation fee received from students/prospective students or their relatives. The assessing officer shall thereafter decide this issue afresh in accordance with law and after giving reasonable opportunity of hearing to the assessee. 26. In the result, all the three appeals of the assessee are allowed for statistical purposes. APPEALS CONCERNING ST. MARTIN S EDUCATIONAL SOCIETY, HYDERABAD. Revenue s Appeals: ITA No.1603/Hyd/201 1 Assessment year 2003-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and above the fees prescribed and thereafter decide the issue afresh in accordance with law after giving reasonable opportunity of hearing to the assessee. We make it clear that the assessee is not entitled for exemption u/s 11 in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc. etc., over and above the prescribed fee for admission of students. 29. The only issue involved in ITA No.1657/Hyd/2011 for assessment year 2005-06 and the other issue involved in the remaining appeals of the Revenue, relates to the additions made on account of depreciation claimed by the assessee. We have dealt with this issue hereinabove, while dealing with the corresponding grounds of the Revenue in the appeals ITA Nos.1440 to1442/Hyd/2011 concerning Sri Venkata Sai Educational Society. For the detailed reasons discussed in that context, in para 7 hereinabove, we set aside the orders of the lower authorities on this issue impugned in these appeals also and restore the matter to the file of the assessing officer for fresh consideration. The Assessing Officer is directed to verify in respect of each asset on which depreciation claimed, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to those noted in para 18 hereinabove. In this view of the matter, for the detailed reasons discussed in para 18 hereinabove, we set aside the impugned orders of the lower authorities on this issue, and restore the mater to the file of the assessing officer with a direction to give one more opportunity to the assessee to file necessary evidence before him, to prove that the donations received were with a direction to form corpus of the assessee trust and that they are not in the nature of capitation fee received from students/prospective students or their relatives. The assessing officer shall thereafter decide this issue afresh in accordance with law and after giving reasonable opportunity of hearing to the assessee. 33. In the result, both the appeals of the assessee are allowed for statistical purposes. APPEALS CONCERNING CMR EDUCATIONAL SOCIETY, HYDERABAD. Revenue s Appeals: ITA No.1609/Hyd/201 1 Assessment year 2004-05 ITA No.1610/Hyd/2011 Assessment year 2005-06 ITA No.1611/Hyd/2011 Assessment year 2006-07 ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission of students. 36. The next issue involved in all these appeals of the Revenue relates to the additions made on account of depreciation claimed by the assessee. We have dealt with this issue hereinabove, while dealing with the corresponding grounds of the Revenue in the appeals ITA Nos.1440 to1442/Hyd/2011 concerning Sri Venkata Sai Educational Society. For the detailed reasons discussed in that context, in para 7 hereinabove, we set aside the orders of the lower authorities on this issue impugned in these appeals also and restore the matter to the file of the assessing officer for fresh consideration. 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 the case of Mahila Sidh Nirman Yojna, cited supra. This issue raised by the Revenue in all these appeals, is set aside to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X
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