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TMI Blog2018 (11) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... S. SIDHU Judicial Member And Shri L.P. SAHU, Accountant Member For the Assessee : S/Sh. Rakesh Gupta Somil Agarwal , Advocates For the Revenue : Smt. Ranu Mukharjee, Sr. DR ORDER PER L.P. SAHU, A.M.: This is an appeal filed by the assessee against the order of ld. CIT(A), Muzaffarnagar dated 26.02.2015 for the assessment year 2010-11 on the following grounds : 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in taking the assessed income at NIL from charitable activity as against the claimed of the appellant at (-) ₹ 2,30,77,383/-. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in taking income from charitable activity at NIL as against Ld. AO s own action in treating the application at ₹ 16,67,85,363/- and thus Ld. AO ought to have computed the income from charitable activity at (-) ₹ 3,06,53,738/- (Rs. 16,67,85,363 - ₹ 13,61,31,625). 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to the object of the trust. Therefore, according to him the provisions of sub-section (4A) of section 11 would come into play to deal with these activities. He further held that educational activity and hostel activities are separable, for which separate books of accounts need to be maintained. The total hostel receipts during the year were of ₹ 1,44,66,375/- and some expenses were attributable to the hostel expenses which was ranging from 25.72% to 40.30%. After, relying on various decisions and examining the income and expenditure account of hostel receipts and expenses, the AO determined the net surplus of the hostel activities at ₹ 68,83,597/- and charged it to tax as business income of the assessee. 3. It was further observed by the Assessing Officer that the assessee trust has claimed a depreciation of ₹ 2,33,30,470/ , which was disallowed by him on the premise that hundred percent application of capital expenditure has already been allowed to the assessee in the year of investment and now the claim of the depreciation on the same assets again amounts to double deduction. He, therefore, following the decision of the Hon ble Supreme Court in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15.10.2014)(Kar) (xiii) ACIT(E) vs. Dawat-e-Hadiyah (ITA No. 3421/Mum/2015 dated 30.07.2015) (xiv). DIT(E) vs. M/s. Indraprastha Cancer Society (ITA No. 240/2014 dated 18.11.2014)(Del) (xv). Unity Hospital (P) Ltd. vs. State of Kerala (WA No.1648/2009 dated 21.12.2010 (Ker). (xvi). DDIT(E) vs. Willingdon Charitable Trust (2007) 107 ITD 493 (ITAT Chennai) (xvii) Anjuman-E-Khyrkhah-E-AAM vs. DIT (E) (2012) 49 SOT 242 (ITAT Chennai) (xviii).Society for Advance Health Education vs. CIT (2013) 145 ITD 257 ITAT, Agra) (xix). CIT Anr. Vs. Children s Education society (2013) 358 ITR 373 (Kar. HC) (xx). Delhi Public School Ghaziabad vs. ACIT (ITA No. 3593/Del/2015 dated 08.05.2018. 6. The ld. DR, on the other hand, opposing the contention of assessee, relied on the orders of the authorities below. 7. Having considered the rival submissions and gone through the entire material on record, we find that the issues and additions involved in this appeal are squarely covered in favour of the assessee by the decision of Co-ordinate Bench in the case of Kanha Charitable Trust (supra)for A.Y. 2010-11 and 2011- 12, where in the Tribunal has decided the ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the statutory obligation of maintenance of the hostel, which involved supply, and sale of food was an integral part of the objects of the Institute nor could the running of the hostel be treated as the principal activity of the Institute. The Institute could not be held to be doing business. Further meals being supplied in a hostel to the scholars, visitors, guest faculty etc. can not be exigible to sales tax where main activity is academics as held in Scholars home Senior Secondary School 42 VST 530. Further, the reliance placed by the lower authorities on the decision of the Hon ‟ ble Madras High Court in case of DCIT versus Wellington charitable trust is also misplaced because in that case, the only activity of that particular trust was renting out of the property and not education. We are also not averse to considering the latest legal developments too where in the recently introduced new legislation of Goods and service tax it is provided that no GST would be chargeable on the hostel fees etc recovered from the Students , faculties and other staff for lodging and boarding as they are engaged in education activities . Therefore we reverse the finding of the lower auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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