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TMI Blog2018 (6) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... re duly audited and assessee is running educational institution and had spent money under the head of maintenance of buildings - there is no enquiry to establish that these expenses were incurred for any other purpose - considering this CIT(A) deleted the addition made by AO - we find that no specific error in the order of the CIT(A) - thus appeal of the revenue is dismissed. Advance payment - Whether advances paid to Shri Durlabh Mahto application of income for educational purposes - Held that:- For the purpose of legal matter payment was made to Mr. Durlabh Mahto during the year - income and expenditure shown in the income and expenditure account related to the educational institution and the assessee neither received any income from any other source nor any amount was spent on any other objects - conditions u/s 10(22) is fulfilled - addition is deleted - appeal filed by the revenue is dismissed. - ITA No. 100 / Ran/ 2014 - - - Dated:- 30-5-2018 - Shri N.S Saini, Accountant Member And Pavan Kumar Gadale, Judicial Member Assessee by : Shri B.K.Banka, CA Revenue by : Shri D.K. Sutariaya, CIT ( DR ) ORDER Per N. S. Saini, AM This is an appeal filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed as application of income. The Assessing Officer has failed to consider that the assessee is entitled to exemption u/s.11 of the Act as it is registered u/s.12AA of the Act. The assessee has applied 85% of its income in their object even in the earlier years and the same is accepted by the income tax Department for the assessment year 2008-09 and earlier assessment years. Since the assessee has applied more than 85% of its income, the balance income is not subject to any further restriction as specified in the provisions of section 10(23C)(vi) and section 11(2) of the Act. 5. After considering the submissions of the assessee, the CIT(A) deleted the addition. 6. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the assessee claimed its entire income as exempt u/s.11 12 of the I.T.Act, 1961. The Assessing Officer assessed the total income of the assessee at ₹ 3,36,05,892/- and levied tax thereon @ 30%. 7. On appeal, the CIT(A) deleted the addition by observing as under: 4.2 It is noted that the AO had made this addition on the basis that the assessee had applied loan and adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 was granted to the assessee on 8.9.2009 vide Memo No.CCIT/Ran/Tech/10(23C)/13/2008-09/4351-4410. It has also been accepted by both the AO during the A.Ys. 2008-09 and 2010-11 that the assessee is running a university and offers programme at bachelor s and master s level in management, science technology and other allied areas and is receiving its income mainly from properties held by it, campus activity fund and interest income from fixed deposits. It is also to be noted that the appellant has applied more than 85% of its income, the balance income is not subject to the restrictions outlined in Section 11(2) of the Act and thus in the present case the provisions of section 11(3) of the Act cannot be invoked. In the instant case, it is seen that the assessee is running minority education institution and the advances given by it to staff and others are in the normal course of activities of the society and there is no enquiry made by the AO to establish that these advances have been given for purpose other than purpose of the society i.e. education. In view of these discussions and after nothing that assessee is entitled to exemption u/s.10(23C)(vi) the addition made under this h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in accordance with the normal rules of accountancy where depreciation is always taken into account for finding out the real income. It has also been contended that the amount of depreciation debited to the accounts of the charitable institution has to be deducted to arrive at the income available for application to charitable and religious purposes. 14. The ld CIT(A) called for a remand report from the Assessing Officer. Ld CIT(A) noted that Hon ble Gujarat High Court in the case of CIT Vs. Sheth Manilal R.amchordas Vish.ram Bhawan Trust 198 ITR 598 has held that the amount of depreciation debited to the accounts of a charitable trust has to be deducted to arrive at the income available for application to charitable and religious purposes. The CIT(A) observed that the books of accounts of assessee were duly audited and assessee is running educational institution and had spent money under the head of maintenance of buildings and other assets to the tune of ₹ 1,02,98,103/-. This expenditure includes expenditure for maintenance of assets such as vehicle and buildings etc and depreciation of R.s.63,47,874/-. All these expenses have been incurred for the assessee's activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in ITA No.366(Pat) of 1979 for the A.Y.1977-78 had observed that the income and expenditure shown in the income and expenditure account related to the educational institution and the assessee neither received any income from any other source nor any amount was spent on any other objects of the assessee and under the above circumstances, the assessee fulfilled the condition of Section 10(22) of the Act and the same was also supported by the decision in 118 ITR 235. In view of the above, the CIT(A) deleted the addition made by the Assessing Officer. 22. Before us, ld D.R. relied on the order of the Assessing Officer. 23. On the other hand, ld A.R. supported the order of the CIT(A). 24. After hearing the rival submissions and perusing the orders of lower authorities, we find that no specific error in the order of the CIT(A) could be pointed out by ld D.R. We find that the CIT(A) has noted that the assessee has given ₹ 4,66,000/- to Shri Durlabh Mahto, who was rendering legal assistance to the assessee. This fact is not controverted by ld D.R. by showing any positive material before us. Hence, we find no good reason to interfere with the order of the CIT(A) and d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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