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TMI Blog2016 (7) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that these are not receipts of the assessee educational institution. When these amounts are reduced from the total receipts of the assessee, the total receipts from educational institution would be less than ₹ 1 Crore. Therefore, assessee would be entitled for deduction/exemption under section 10(23C)(iiiad) of the Income Tax Act. - Decided in favour of assessee. - ITA No. 1065/CHD/2011 - - - Dated:- 20-7-2016 - Shri Bhavnesh Saini, Judicial Member For the Appellant : Shri Sushil Kumar For the Respondent : Shri Sudhir Sehgal ORDER This appeal by revenue has been directed against the order of ld. CIT(Appeals) Chandigarh dated 23.08.2011 for assessment year 2003-04 on the following grounds : 1. The Ld. CIT(A) has erred in holding that the grant-in-aid, vocational grant and donation from Hansali Wale Santji were not to be treated as receipts for computing the cap of ₹ 1 Crore and that the provisions of Section 10(23C)(iiiad) of the Income Tax Act were applicable in the case of the assessee. 2. The Ld. CIT(A) has erred in holding that the income of the assessee was exempt and that the provisions of Section 10(23C)(iiiab) of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Equipment Grant ₹ 25,.250/- Total ₹ 55,28,634/- The school when established was sanctioned 95% grant in aid for meeting the expenditure on salary etc. Scholarships were given by the university for disbursement to the student. Similarly donations have been given by Hansali Wale Sant for education purposes. So all these amounts do not form part of the total receipts. A letter of the govt. regarding financial grant of 95% granted to the institution is enclosed and a letter dated 20.03.2002 of the University Grant Commission regarding Vocational Course grant of ₹ 9,00,000/- is also enclosed and a letter dated 29.01.2003 regarding scholarship to schedule caste student is enclosed. Details of donation receipts from Hansali Wale Sant Baba Ji on different dates amounting to ₹ 4,87,085/- is also enclosed. These details were called for in the last hearing as per order sheet entry. It is also covered u/s 10(23C)(iiiab), any university or other educational institution existing solely for educational purposes and not for pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards payment of salary and cannot be said to be part of receipts of the appellant, since it is for a particular purpose. Similar is the case with vocational course grant receipt from UGC which is also for running the vocational course and cannot be said to be part of receipts. Donation was for building purposes and so the amount of donation can also not be treated as receipts of the appellant. These three items itself, if totaled, amount to ₹ 53,88,501/- and if this amount is reduced from gross receipts, the effective receipts would be only ₹ 94,43,094/-. Apart from . these, there are some other receipts, which are for particular purposes and cannot be included for the purposes of calculation of receipt u/s 10(23C)(iiiad) of the Act. Thus, receipts of the appellant, which should be taken for the purposes of section 10(23C)(iiiad) would be less than Rs, 1 crore and so the case of the appellant was duly covered by section 10(23C)(iiiad) of the Act. Alternate submission of the appellant is that the appellant society is substantially financed by the government, which is also correct because Punjab Govt. has been financing almost entire salary of the teachers employed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse. Donation from Hansaliwale Santji was meant for building purposes and other donations have been received for specific purposes, therefore, there is no infirmity in the order of ld. CIT(Appeals) in allowing relief to the assessee. 6. I have considered rival submissions. The total receipts of the assessee have been considered by the Assessing Officer after considering the grants received by assessee, the Assessing Officer found that the grant received by the assessee is only 25.6% of the total receipts. Therefore, Assessing Officer did not allow benefit to the assessee under section 10(23C)(iiiab) of the Act. The ld. DR referred to the provisions of Rule 2BBB of the IT Rules in which 50% of the total receipts have been prescribed for considering whether assessee is substantially financed by the Government for any previous year. The ld. DR admitted that the said rule is applicable and inserted into Act w.e.f. 12.12.2014, therefore, this rule would not apply to the assessment year under appeal i.e. 2003-04. Even in the ground of appeal, the revenue has contended that the total finance received from the Government was only 25.6% of the total receipts as is mentioned by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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