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TMI Blog2019 (6) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 (5) TMI 1482 - ITAT DELHI] the hostel facility provided by the assessee society is not in the nature of business and is incidental to the attainment of the main object of the providing education to students. Therefore, provisions of Section 11(4A) will not be applicable to the assessee - decided in favour of assessee Depreciation claim of assessee trust - The assessee has provided the depreciation in the income and expenditure in conformity with the Income Tax Rules applicable to the allowance of depreciation of fixed assets. Various decision of the Hon ble Apex Court and Hon ble High Courts relied upon by the Ld. AR highlights the proposition that depreciation should be allowed, even if, the purchase of assets have been claimed by the trust towards application of income - Decided in favour of assessee - ITA No. 3550/Del/2015 - - - Dated:- 12-6-2019 - Shri G.D. Agrawal, Vice President And Smt. Suchitra Kamble, Judicial Member For the Assessee : Shri Ajay Wadhwa, Adv. For the Revenue : Shri Amit Katoch, Sr. DR ORDER PER SUCHITRA KAMBLE, JUDICIAL MEMBER This appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate businesses and are not covered in the definition of charitable purpose u/s 2(15) of the Act. The Assessing Officer further held that since no separate books of accounts are maintained for this business, the assessee is not entitled for exemption u/s 11(4A) of the Act and income generated from surplus of the above activities are taxable. The Assessing Officer also disallowed depreciation of ₹ 252,75,253/- by observing that allowance will amount to double deduction since 100% application of value of capital expenditure had already been availed by the assessee in the year of investment and on the same value the assessee has claimed depreciation. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that as regards Ground nos. 2, 2.1 2.2 relating to hostel and transportation fees, there was no profit motive in carrying out these activities. The Ld. AR submitted that the facilities in the College/Institute are not carried with the profit motive. There were meant for promoting the main object of the Institute. In fact the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was running hostel for business purpose. Since the task of providing education essentially involves institution and administration of facilities for housing the students in hostel, provision of timely food from the mess, provision of sports facilities for mental relaxation and recreation of the students and bus service facilities for picking up and dropping of the students to the institute for the purpose of securing education, it has to be construed as essentially related to the realization of the primary charitable objective of education itself. The Ld. AR further submitted that although no surplus is generated out of the facilities provided to the students in the form of hostel/transport, however, even if there is any surplus, it is used by the assessee for providing education to students. It is not the case that the surplus is drawn out by the trustees for their personal benefit. The Ld. AR submitted that the facility provided by the college is restricted only to the college students and cannot be availed by the public at large at their will and at any given hour of time. The provisions of section 11(4) of the Act are not applicable because the college is not running an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f there are large number of students, the per head expense would be on the lower side while if there are less number of students, the per head expense would be on a higher side. No detail of the breakup of the food items provided, number of meals given, nature of foods such as vegetarian and non-vegetarian, nature of morning breakfast, evening tea, etc. The Ld. AR further submitted that the Assessing Officer ignored the fact that the risk and responsibility attached in providing hostel and transport facility to the students. The assessee society has provided tough security and staff. It is, thus, stated by the Ld. AR that apart from making payments to the contractor for hiring buses and for rent expenses, assessee society incurred other connected expenditure such as providing attendants for safety. All such expenses are merged with the expenses debited under different heads and they have not been considered by the Assessing Officer. The Assessing Officer has proceeded to complete the assessment by estimating the mess expenses without giving specific notice u/s 142(1) of the Act. The Assessing Officer acted in a most arbitrary manner to device its own formula so as to work out the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Tools and Manufacturers Associations vs. DIT (2018) 91 taxmann.com 465 (Bom.) 2) Dayanand Pushpadevi vs. Addl. CIT (2016)-TIOL-1810-ITAT-DELHI 3) Young Women Christian Association of Madras vs. JDIT (2014) 41 taxmann.com 142. But the Ld. DR could not distinguish the ratio laid down by the Hon ble Apex Court as well as various High Courts and Tribunal s decisions relied upon by the Ld. AR during the hearing. 9. We have heard both the parties and perused all the relevant material available on record. Ground No. 1 is general in nature hence dismissed. As regards to Ground No. 2, 2.1 and 2.2, the issues contested herein have been decided by the Tribunal in case of Delhi Public School, Ghaziabad vs. ACIT (ITA No. 3593/Del/2015, AY 2010-11 order dated 08.05.2018). The Tribunal held as under: 8. We have gone through the record in the light of the submissions on either side. At page No. 4 of the assessment order, the Ld. AO recorded that the assessee society has charged ₹ 3,00,42,296/- towards transport fee which is included in the income and expenditure account and corresponding expenses was de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. It was not the case of the revenue that assessee has rented out these hostels to the students who are not parted education in the above 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 vs. 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 IT vs. State of UP (1976) 38 STC 428 (All) wherein question arose in Indian Institute of Technology vs. State of UP (1976) 38 STC 428 (All) with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of providing education as per object of the trust. 12. Further, in 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 power 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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