Student Development Funds Deemed Capital Receipts for Asset Creation, Not Revenue; ITAT Supports Expense Reasonableness.

The development fund received from students, apart from tuition fees, is treated as a capital receipt or corpus donation, not a revenue receipt. The fund is utilized for creating capital assets like school buildings and infrastructure, fulfilling the society's objectives. The litmus test for a charitable institution is the application of funds, not the source of contributions. If the development fees are used for infrastructure creation, they are considered capital receipts. The advances given to staff, suppliers, and sister concerns were not treated as misappropriation of funds or investments violating Section 11(5) and 13(1)(d). The institutions receiving non-interest-bearing loans are also registered u/s 12AA and controlled by the same m..... .....

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