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TMI Blog2017 (7) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... owards the object. It was further recorded by the Tribunal, after examining the matter that the amounts spent by the assessee were clearly the application of its income in nature which had been spent to achieve the objects of the assessee. The assessee had been granted approval under section 10(23C)(iv) of the Act and thus, there was no question of disallowing of any amount of this nature. As decided in the case of [Commissioner of Income-tax Versus Red Rose School 2007 (2) TMI 575 - ALLAHABAD HIGH COURT ] CIT has to satisfy himself about the genuineness of the activities of the trust or institution and also about the objects of the trust or the institution - on being satisfied he will either grant the certificate or would reject - thus Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Appellate Tribunal was justified in granting relief on capi tal expenditure even when the exemption under section 10(23C)(iv) was denied by the Assessing Officer ?" 2. A few facts necessary for adjudication of the controversy involved as narrated in the appeal may be noticed. The assessee-respondent filed return of income claiming exemption under section 10(23C)(iv) of the Act. The Assessing Officer (AO) framed assessment by denying the exemption under section 10(23C)(iv) of the Act as it was not approved by the prescribed authority. Credit for capital expenditure which was allowable to an exempted entity was also denied. The Assessing Officer made the additions of excess of income over expenditure of ₹ 15,15,89,376 apart fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant-Revenue. 3. We have heard the learned senior standing counsel for the appellant- Revenue. 4. Admittedly, the assessee filed return of income declaring nil income. During the year under consideration, the assessee was having income of ₹ 15,15,89,376, but after claiming exemption under section 10(23C)(iv) of the Act, the assessee showed nil income in the return of income. The Commissioner of Income-tax (Appeals) noticed that the Commissioner of Income-tax (Exemptions) vide order dated March 1, 2016 had granted exemption under section 10(23C)(iv) of the Act to the assessee with effect, from the assessment years 2006-07 to 2011-12. It was further observed that after considering the explanation of the assessee in the light of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the Revenue in appeal, it was recorded by the Tribunal that in the present case, capital expenditure had not been charged to profit and loss account. The third proviso to section 10(23C) of the Act provides for ". . . applies its income or accumulates it for application, wholly or exclusively to the objects for which it is established . . .". Thus, the amount was spent by the assessee towards the object. It was further recorded by the Tribunal, after examining the matter that the amounts spent by the assessee were clearly the application of its income in nature which had been spent to achieve the objects of the assessee. The assessee had been granted approval under section 10(23C)(iv) of the Act and thus, there was no qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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