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TMI Blog2017 (12) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... e to have made expenditure after obtaining unsecured loans of more than ₹ 10 crore. This itself goes to show that the expenditure in establishing and running the school was laid out by the assessee Society. The ld. CIT has not made any observation that any expenditure was made by G.D. Goenka. Nothing has been brought on record to show that the assessee Society is working/is to work under G.D. Goenka, or that there is any interference of G.D. Goenka in the affairs of the school run by the assessee Society. There is nothing on record to show that any part of the fund has been utilized by the assessee Society for any profit/gain. Nothing has also been brought on record to show that funds were diverted to either the trustees, or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranchise has been acquired by paying substantial amount of royalty annually. The exact modus operand as to how the school is being run is not clear from the papers and documents and the payment of royalty itself is questionable vis a vis charitable purpose in terms of provisions of section 2(15). At this moment who is running the school is not clear. The applicant trust is also making capital expenditure after obtaining unsecured loans of more than ₹ 10 crores. the amounts involved and the modus operandi bring out a semblance of an adventure in the nature of' trade rather than a charitable entity engaged in imparting education. Considering these aspects, it has not been found possible to grant registration u/s 12AA of the IT Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se; that the C.I.T. has erred in not appreciating that u/s 12AA of the Act, he is only to examine the genuineness of the objects of the trust and not the application of income. 4. The ld. DR has placed strong reliance on the impugned order. 5. We have heard both the parties and have perused the material on record. It is an undisputed fact that the assessee is a Society which has been established for educational purposes, as is available from APB 4-6, the Objects of the assessee s Society. 6. The assessee is running a school named G.D. Goenka Public School, Ussaini, Hazratpur, Firozabad. This school has been granted affiliation with the CBSE, which is clear from affiliation letter (APB 12-14) dated 05.04.2013. The school is being ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any observation that any expenditure was made by G.D. Goenka. 8. Nothing has been brought on record to show that the assessee Society is working/is to work under G.D. Goenka, or that there is any interference of G.D. Goenka in the affairs of the school run by the assessee Society. 9. Then, there is nothing on record to show that any part of the fund has been utilized by the assessee Society for any profit/gain. Nothing has also been brought on record to show that funds were diverted to either the trustees, or their relatives. There is no violation of section 13 of the I.T. Act, as such. 10. In S.R.M. M. CT. M. Tiruppani Trust vs. CIT , 230 ITR 636 (SC), it has been held that money having been spent on acquisition of assets for e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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