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TMI Blog2019 (6) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... which is object of the society. This issue has also been considered by the Tribunal in assessee s own case [ 2019 (1) TMI 794 - ITAT DELHI] . Respectfully following the same we decide in this issue in favour of the assessee and hold that these activities are incidental to the attainment of the main object of the trust of the education and consequently assessee is entitled for benefit u/s 11. Disallowance of depreciation - HELD THAT:- This issuer stands covered in favour of the assessee by the judgment of Hon ble High Court [2017 (3) TMI 896 - ALLAHABAD HIGH COURT] . - ITA No. 250 And 251/Del/2017, ITA No. 1790/Del/2018 - - - Dated:- 21-5-2019 - Shri Amit Shukla, Judicial Member And Shri L.P. Sahu, Accountant Member For the Assessee : Shri R.S. Singhvi And Shri Satyajit Goel, CA For the Department : Shri S.S. Rana, CIT(DR) ORDER PER AMIT SHUKLA, J.M:- The aforesaid appeals have been filed by the assessee against separate impugned orders dated 14.3.2018 and 22.11.2016, for the quantum of assessment for the assessment years 2014-15, 2012-13, 2011-12. 2. We will fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintain separate books of accounts as laid down in section 11(4A). He thus strongly relied upon the order of the AO and Ld. CIT (A). 7. After considering the aforesaid submissions and on perusal of the relevant finding in the impugned orders, we find that it is not in dispute that assessee was granted registration u/s 12AA for carrying out educational activities and is entitled for benefit u/s 11. Ld. AO has held that fees received for hostel facilities and transportation charges is a separate and distinct activities from education and therefore, in view of the section 11 (4A) the same has to be taxed separately, because assessee is not maintaining separate books of accounts. Such a reasoning of the AO cannot be sustained, because these activities are incidental to the main objects of the trust, i.e., carrying out educational activities and it cannot be reckoned as a separate business activities for which separate books of accounts is required to be maintained. The hostel facility and transportation of students is inextricably linked with the running of school and is part of overall educational activity. Hon ble Karnataka High Court in the case of Karnataka Lingaya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e institutes. It was also not the case of revenue that assessee is primarily engaged in the business of providing hostel facilities to the students. The above issue is no more res Integra in view of the decision of the Hon'ble Karnataka High Court in CIT versus Karnataka Lingayat education society in ITA No. 5004/2012 dated 15/10/2014 wherein it has been held that -providing hostel to the students/staff working for the society's incidental to achieve the object of providing education, namely the object of the society. In view of this we are of the opinion that providing of hostel facilities and transport facilities to the student and staff member of the educational Institute cannot be considered as business activity but is subservient to the object of educational activities performed by the society. We are also supported by our view by the decision of the Hon'ble Allahabad High Court in IIT versus state of UP,(1976) 38 STC 428 (All) wherein question arose in Indian Institute of Technology v. State of U.P. (1976) 38 STC 428 (All) with respect to the visitors' hostel maintained by the Indian Institute of Technology where lodging and boarding facilities were provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mallikarjun School Society vs.CCIT (2018) 90 taxmann.com 160 (Uttarakhand), the Hon'ble High Court held that an educational institution will not cease to be one existing solely for educational purposes since the object is not to make profit and the decisive or as a test as observed by the Hon'ble Apex court is whether on an overall view of the matter the object is to make profit and one should bear in mind the distinction between the corpus, the objects and the powers of the concerned entity. 13. In the present case also, it is not the case of the revenue that the transport facility is also provided to the outsider. Hon'ble Karnataka High Court in the case of Karnataka Lingayat Education Society in ITA No. 5004/2012 dated 15.10.2014 has held that providing the hostel to the students and the staff working for the society is incidental to achieve the object of providing education and i.e. the object of the society. Therefore, in view of the above decision of the Hon'ble Karnataka High Court as well as the decision of a coordinate bench of this Tribunal in ITA No. 4639/Del/2015, we are of the view that the transport activities of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to exclude deduction, specific declaration was made by insertion of aforesaid sub-section in Section 11. The aforesaid amendment is effective from 1-4-2015 and, therefore, will not help revenue in the circumstances of case in hand. Even this aspect has been considered by Karnataka High Court in DIT (Exemptions) v. Al-Ameen Charitable Fund Trust [2016] 383 ITR 517/67 taxmann.com 160/238 Taxman 148 and following CIT vs. Vatika Township (P.) Ltd. [2014] 367 ITR 466/49 taxmann.com 249/227 Taxman 121 (SC) Court has held that the aforesaid amendment is prospective and operative from 1-4-2015. [Para 14] There are divergent views expressed by Kerala High Court in Lissie Medical Institutions v. CIT [2012] 348 ITR 344/24 taxmann.com 9/209 Taxman 19 (Mag.) wherein it has placed reliance on Supreme Court's judgment in Escorts Ltd. v. Union of India [1993] 1 SCC 249. The judgment in Escorts Ltd. (supra) was in respect of different provision while scheme of Section 11 is/was different till 1-4-2015. The view taken by Kerala High Court could not be accepted. 10. Accordingly, respectfully following the binding precedent of the Hon ble Jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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