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TMI Blog2019 (7) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the findings of the authorities below that the running of hostel facility amounts to business activity or that the surplus generated has to be considered as business income, cannot be sustained. We therefore allow the claim of the assessee and direct the assessing officer to delete the addition made on this score. Disallowance of expenses incurred on a travel by the top official and office bearer of the society - CIT(A) confirmed the findings of AO to the effect that the travel by chartered flight is definitely unreasonable expenditure particularly by an assessee who enjoys tax benefit for charitable activities - HELD THAT:- Neither the impugned order nor the assessment order show that the assessee had justified the claim with any evidence to show the purpose of travel or the circumstances forcing the official of the assessee to travel by chartered flight. For want of evidence we find it difficult to take a different view from the view taken by the authorities below. We therefore confirm the same and dismiss the relevant ground of assessee s appeal. As contended on behalf of the assessee that the 85% of the total receipt of ₹ 49,37,48,941/- for applicability of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling expense of ₹ 3,79,156/- claimed by the assessee, Ld. CIT(A) confirmed the findings of the learned Assessing Officer to the effect that the travel by chartered flight is definitely unreasonable expenditure particularly by an assessee who enjoys tax benefit for charitable activities. 4. Revenue therefore filed ITA 1928 /Del/ 2016 challenging the deletion of ₹ 1,98,64,393/- on account of the depreciation and granting relief to the tune of ₹ 67,87,006/- on account of hostel activities. At the same time, aggrieved by the finding of the Ld. CIT(A) that the surplus from hostel running activity shall be treated as business income and confirmation of the addition on account of the travel expense, assessee preferred ITA No. 1826 /Del/ 2016. 5. Insofar as the first addition of ₹ 1,98,64,393/- on account of disallowance of depreciation is concerned, learned Assessing Officer had disallowed the depreciation as application of income by following the decisions in the case of Escorts Ltd (supra) and also the decision of the Hon ble Kerala High Court in the case of Lissie medical institutions vs. CIT 348 ITR 344 (Kerala). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nataka Lingayat education society in ITA No. 5004/2012 dated 15/10/2014 followed by the coordinate benches of this Tribunal in a number of matters. He brought to our notice the view taken by the coordinate benches of this Tribunal in the case of Delhi public school vs. ACIT in ITA No. 3593/del/2015 for the assessment year 2010-11 and also in M/s Friends Charitable Society vs. ACIT ITA No. 3298/del/2015 for the assessment year 2010-11. 11. In ITA No. 3593 /Del/ 2015, the coordinate Bench of this Tribunal held as follows:- ..In the case of Krishna Charitable Society Vs. Addl CIT in ITA No. 4639/Del/2015 for AY 2011-12 dated 15.09.2017, a similar question had arisen. Vide para No.11, a coordinate bench of this Tribunal held that transport and hostel facility surplus cannot be considered as business income of the society as these activities are incidental to the main object of the assessee society of education. Relevant observations on this aspect are as under:- 11. We have carefully considered the rival contentions and perused the orders of the lower authorities and other judicial pronouncement placed before us. In the grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced 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 authorities and held that transport and hostel facilities surplus cannot be considered as business income of the assessee society which is mainly engaged in business activities and these activities are subservient to the main object of education of the trust. 11. In Kanha Charitable Trust Vs. ACIT ITA Nos.3297 5987/Del/2015, while placing reliance on its earlier decision in the case of Krishna Charitable Society Vs. ACIT it was held that in the absence of any clinching evidence to show that the hostel facilities and transport facilities were provided to anybody other than students and staff of the trust. The transport and Hostel facilities provided by the educat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of Institute for better academic and administrative matters, and since this meeting was convened at a short notice, the official was forced to go by a chartered flight. Ld. AR further submitted that the 85% of the total receipt of ₹ 49,37,48,941/- for applicability of section 11 comes only ₹ 41,96,86,599/- whereas the total sum utilised by the assessee was ₹ 48,01,53,736/-much more than the statutory requirement and therefore the disallowance of this travel expense does not impact the assessee at all. 15. It could be seen from the assessment order, learned Assessing Officer recorded that during the course of assessment proceedings, the authorised representative of the assessee had not shown how the said non-scheduled flights were made exclusive for business purpose. Neither the impugned order nor the assessment order show that the assessee had justified the claim with any evidence to show the purpose of travel or the circumstances forcing the official of the assessee to travel by chartered flight. For want of evidence we find it difficult to take a different view from the view taken by the authorities below. We therefore conf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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