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TMI Blog2023 (3) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... ntive grounds of appeal :- "1. Because, the order of Id. lower authority is bad in law and against the facts and circumstances of the case and hence is unsustainable. 2. Because, the Id. commissioner of income tax (appeals) grossly erred in upholding addition of Rs.67,31,240/ as amount recd. from students over academic fee, being towards transportation /Mess etc. facilities as a separate business activity in terms of section 11(4A), by wrongly placing reliance on irrelevant material and defeating the pronouncements of hon'ble courts/tribunals hence findings on the issue are perverse. 3. Because, Id. lower authority further erred in the addition against the principle of consistency in as much as in earlier and even in subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that the excess fees collected over the fee fixed by the authorities in the form of book bank/medical fee etc of Rs. 98,90,800/- is to be taxed as business income u/s 164 (2) of the Act. Accordingly, Ld. A.O. taxed un-utilization of Rs. 7,02,78,875/-. The assessee filed application u/s 154 wherein a sum of Rs. 31,59,560/- was further deducted, being the fee receivable written off. Therefore the addition remained to Rs. 67,31,240/-. 4. Aggrieved by the assessment order, the assessee has preferred an appeal before the CIT(A). The CIT(A) has partly allowed the appeal filed by the assessee on 28/03/2018 by sustaining the addition of Rs. 67,31,240/-. 5. Aggrieved by the order of the Ld.CIT(A) dated 28/03/2018, the assessee is in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Daya Nanda Pushpa Devi Charitable Trust Vs. ACIT, Ghaziabad in ITA No. 103/2017 reported in (2021) 128 Taxman.com 118 (Allahabad) held that activity of running hostel is an integral part of education so as to out of clutches of Section 11(4A) of the Act, though the assessee had maintain sufficient separate account in as much as separate ledger account for the same maintained. The relevant portion of the same are as hereunder:- "21. While considering the scope of sub-section (4A) of Section 11 which came into effect by the Finance (No.2) Act 1991 w.e.f. 01.04.1992, in Assistant Commissioner of Income Tax Vs. Thanthi Trust9, the Apex Court had noted that the substituted sub-section (4A) gave trust and institution a wider latitude than the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursued is integral or subservient to the dominant object or is independent/ancillary/incidental to the main object or forms a separate activity in itself. The issue whether the institution is hit by sub-section (4A) of Section 11 of the Act will essentially depend upon the individual facts of the case of the institutions where considering the nature of the individual activity, it will have to be tested whether the same forms incidental, ancillary, connected activity (ies) and whether the same was carried out pre-dominantly with the profit motive in the nature of trade, commerce etc. ................................. 34. The element of trade and commerce in the hostel activity cannot be found so as to bring the same within the meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) by granting exemption under Section 11 of the Act. ....................... 41. In view of the above noted legal position, any interpretation or meaning given to the word "business" in the literal parlance cannot be read into the Income Tax Act as the word "business" has been defined in the Act itself. The Court has to read the statute namely the Income Tax Act to find out as to whether the activity of the assessee in maintaining the hostel would be exempted under Section 11(1) of the Act and whether the provisions of Section 11(4A) would be attracted in the facts and circumstances of the case. 42. Having held that the activity of running the hostel is not a separate business activity and surplus income from the hostel fee cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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