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TMI Blog2024 (7) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... rial on record, such view cannot be taken in the circumstances, the Tribunal has committed an error by treating the admission fee charged from the students as not forming part of the corpus of the Trust. Therefore, this appeal is also allowed. Decided in favour of the assessee and against the revenue. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE NIRAL R. MEHTA Appearance: For the Appellant(s) No. 1 : Mr M.R. Bhatt, Ld. Sr. Adv with Ms Shailee S Joshi (11582). For The Respondent : Ms Maithili Mehta, Ld. Sr. Standing Counsel. For the Opponent(s) No. 1: Notice Served ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned Senior Advocate Mr. M.R. Bhatt with learned advocate Ms. Shailee S. Joshi for the appellant and learned Senior Standing Counsel Ms. Maithili Mehta for the respondent. 2. This Tax Appeal is filed under Section 260A of the Income Tax Act, 1961 (for short the Act ) raising following substantial questions of law arising out of the judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad C Bench (for short the Tribunal ) dated 14th July 2023 in the ITA No. 685 of 2019 for the A.Y. 2013-14 : A. Whether on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 5,00,60,184/- as income of the assessee and added back to the total income of the assessee. 3.4. The Assessing Officer also disallowed the claim of depreciation of Rs. 63,77,413/- on the ground that the assessee had claimed the capital expenses as application towards object of the Trust and therefore the claim of depreciation would amount to double deduction since the benefit of 100% deduction of the expenses has already been allowed to the Assessee-Trust. 3.5. The Assessing Officer therefore reduced the amount of disallowance of Rs. 50060184/- towards development fund not offered as income and disallowance of depreciation of Rs. 6377413/- from the loss declared by the assessee-Trust of Rs. 56880691/- and determined the gross income of the Trust as Rs.(-)4,43,094/- and accordingly assessed the total income as Rs. Nil. 3.6. Being aggrieved by the Assessment Order passed under Section 143 (3) of the Act, the assessee preferred an appeal before the Commissioner of Income Tax (A) (for short the CIT(A) ). 3.7. The CIT(A) by order dated 12.02.2019 deleted the addition made by the assessing officer. The CIT(A) relied on decision of Tribunal in ITA Nos.279, 280 and 281 of 2013 for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reversing the findings of the first appellate authority, it will have to spell out the reasons for not agreeing with the findings of the said first appellate authority and in such a situation, the Tribunal is not excepted to act as the original authority. Learned Senior Advocate Mr. M.R. Bhatt further submitted that in the present case, the Tribunal has not given any finding as to why it is not agreeing with the finding recorded by the CIT (A). 4.4. Learned Senior Advocate Mr. M.R. Bhatt submitted that the Tribunal ought to have appreciated that for the assessment years 2004-05, 2005-06, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13, the issue with regard to the corpus donation has become final even up to the stage of this Hon ble Court and reference is made to order passed by this Court in Tax Appeal No. 356 of 2012 and Tax Appeal Nos. 860, 861 and 862 of 2013. 4.5. Learned Senior Advocate Mr. M.R. Bhatt therefore submitted that the Tribunal has failed to appreciate that no detailed inquiry was carried out by the Assessing Officer for determining the nature of the contribution and upon cursory satisfaction, the Tribunal has arrived at a conclusion that there is no element of vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as under : 22. The concurrent finding of fact, as recorded by the CIT(A) and the Appellate Tribunal, is that the amount paid by the parents of the students admitted to the assessee's educational institution was towards the corpus donation account and the same was not collected by way of capitation fee. If it is the case of the Revenue that the amounts paid by the parents of the students admitted to the assessee's educational institution was not towards the corpus donation account, but it was collected only by way of capitation fee and such amount of capitation fee is not exempted in the hands of the assessee institution, then the assessing authority ought to have taken pains to undertake a detailed inquiry in this regard by oral examination of parents, etc. who admitted their children in the school. There is no doubt and it goes without saying that if the donation is found to have been given for material gain in securing admission, the same cannot be characterised as donation towards charitable purpose and the assessee would not be entitled to have the benefit, but, unfortunately in the case on hand, in the absence of any material on record, we are unable to take such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. in the assessment order. Appellant submitted that this issue is decided in favour of the appellant by Hon'ble ITAT, Ahmedabad in ITA No. 279,280 281/Ahd/2013 for A.Y. 2004-05, 2005-06 2009-10 and ITA No. 1321/Ahd/2011(D) ITA No. 1420/Ahd/2011 dtd. 03-02-2012 for A.Y. 2008-09. CIT(A)-XXI allowed the appeal of the appellant in the earlier A.Y. 2010-11, following the order of Hon'ble ITAT in ITA Nos. 279,280 281/Ahd/2013, by holding as under:- 7.2 I have considered the assessment order and the submissions made by the appellant. The Hon'ble ITAT in appellant's own case for Asst. Years 2004-05, 2005-06 2009-10 in ITA no. 279,280 281/Ahd/2013 on identical facts, has held that contribution towards different corpus funds were in the nature of corpus fund and as such exempt u/s. 12 of the I.T. Act. The relevant observation is reproduced as under:- Taking into account all the facts as discussed in the foregoing paragraphs in holding that contribution towards different corpus funds aggregating to Rs. 1.9 crores as current income of the assessee liable to be taxed whereas the CIT(A) was justified in her finding that the said contributions were in the nature of corpus fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lization of the aforesaid amount, towards the objects of the trust, after carrying out the necessary verification. 10. In view of decision of this Court in case of the appellant, the amount paid by the parents of the students admitted to the education institution run by the appellant is required to be held as a payment towards corpus donation and same was not collected by way of capitation fee. 11. As observed by this Court while considering such issue in Tax Appeal No. 356 of 2012, the Assessing Authority has not taken any inquiry with regard to examination of parents who admitted the students in School as to whether the payment is made towards corpus fund or capitation fee. It is true that the donation is bound to have been given for material gain in securing admission, the same cannot be characterised as donation towards charitable purpose and the appellant would not be entitled to have the benefit but in the facts of the case, in absence of any material on record, such view cannot be taken in the circumstances, the Tribunal has committed an error by treating the admission fee charged from the students as not forming part of the corpus of the Trust. Therefore, in this case, foll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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