N.H. Kapadia Education Trust, Ahmedabad V. The Asstt. Commissioner of Income Tax (Exemption), Circle-1, Ahmedabad

CO 208/AHD/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3660 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 30-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Depreciation; Charitable institution; Revenue expenditure; Capital expenditure
• Section: 12; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 2403/AHD/2016 & CO NO. 208/AHD/2016 / ASSESSMENT YEAR : 2012-13 ASSTT. COMMISSIONER OF INCOME-TAX (EXEMPTION), CIRCLE-1, AHMEDABAD VS NH KAPADIYA EDUCATION TRUST, THE HB KAPADIYA NEW HIGH SCHOOL, GURUKUL ROAD, MEMNAGAR, AHMEDABAD-52 PAN : AAATN 1417 G / (APPELLANT) / (RESPONDENT/ CROSS-OBJECTOR) REVENUE BY : SHRI RAJDEEP SINGH, SR DR ASSESSEE BY : SHRI SN DIVATIA, AR DATE OF HEARING : 03/04/2018 DATE OF PRONOUNCEMENT IN COURT : 09/04/2 018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-9, AHM EDABAD DATED 14.07.2016 PASSED FOR ASSESSMENT YEAR 2012-13. ON RECEIPT OF NOTICE IN THE REVENUES APPEAL, THE ASSESSEE HAS FILED CROSS-OBJE CTION BEARING NO. 208/AHD/2016. 2. REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APP EAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS.4,39,7 2,358/- TREATING THE SAME AS CAPITAL EXPENDITURE WHICH THE AO DISALLOWED TREATIN G REVENUE EXPENDITURE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS.56,78,3 73/-. BEING DEPRECIATION DISALLOWED BY THE AO. 3. AT THE TIME OF HEARING BEFORE US, THE LEARNED RE PRESENTATIVES FAIRLY AGREE THAT THE ISSUE RAISED IN GROUND NO.1 IS COVER ED, IN FAVOUR OF THE ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 2 ASSESSEE, BY THE ORDER DATED 05.04.2013 PASSED BY T HE CO-ORDINATE BENCH IN ITA NOS. 279 TO 281/AHD/2013, IN ASSESSEES OWN CAS E FOR ASSESSMENT YEARS 2004-05, 2005-06 & 2009-10, WHEREIN THE TRIBU NAL, FOLLOWING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASS ESSMENT YEAR 2008-09, HAS HELD AS UNDER:- 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT ALL THE ISSUES IN VOLVED IN THESE APPEALS ARE COVERED BY THE DECISION OF THIS TRIBUNAL IN ASSESSE E'S OWN CASE IN ITA NO. 1321/AHD/2011 FOR A.Y. 2008-09. RELEVANT PORTION OF THE TRIBUNAL IN RESPECT OF GROUND NO. 1 READS AS UNDER:- ' (VI) AGITATED WITH THE TREATMENT METED OUT AT THE FINDINGS OF THE CIT(A), THE REVENUE HAS COME UP WITH THE PRESENT AP PEAL. IT WAS THE CASE OF THE REVENUE THAT THE ASSESSEE HAD COLLECTED RS.1,90,01,319/- FROM STUDENTS AT THE TIME OF ADMISSION. THIS AMOUNT WAS NOT CREDITED TO THE INCOME AND EXPENDITURE BUT DIRECTLY CREDITED TO THE BALANCE SHEET. DURING THE COURSE OF SCRUTINY, T HE ASSESSEE HAD CLAIMED THIS AS A CORPUS DONATION. THE ASSESSEE COU LD NOT FURNISH ANY EVIDENCE IN SUPPORT OF THE CLAIM THAT THE FEES AND FUNDS COLLECTED FROM THE STUDENTS WAS A CORPUS DONATION. THE FEES CONTRI BUTED FROM STUDENTS AND THEIR PARENTS WERE FOR SERVICES TO BE RENDERED BY THE SCHOOL. THE CONTRIBUTION BY THE STUDENTS AND PARENT S ARE QUID PRO QUO (FOR SERVICE RENDERED MUTUALLY). IT WAS, FURTHER, C ONTENDED THAT THESE WERE NOT DONATIONS, BUT, PAYMENTS FOR ADMISSION AND SERVICES TO BE RENDERED BY THE SCHOOL; THAT IN THE STATEMENT OF IN COME FILED ALONG WITH THE RETURN OF INCOME; THE AMOUNT OF CORPUS DON ATION WAS SHOWN AS NIL. IT WAS, FURTHER, ARGUED THAT IT WAS BECAUSE THE ENTIRE DONATION OF RS.1.90 CRORES HAS NOT BEEN SHOWN IN THE INCOME & EXPENDITURE ACCOUNT, BUT, DIRECTLY CREDITED TO BALANCE SHEET AN D NO SEPARATE CLAIM OF DEDUCTION U/S 11(1)(D) OF RESPECT OF THE ACT IN RESPECT OF CORPUS DONATION HAS BEEN CLAIMED IN THE RETURN. (VII) WE HAVE DULY CONSIDERED THE SUBMISSIONS OF TH E EITHER PARTY, THOROUGHLY PERUSED THE RELEVANT CASE RECORDS AND AL SO THE VOLUMINOUS PAPER BOOK CONTAINING, INTER ALIA, COPIES OF (I) AU DITED ANNUAL ACCOUNT WITH TAX AUDIT REPORT; (II) TRUST DEED; (III) SAMPL E RECEIPTS TOWARDS CORPUS FUND AND TUITION FEES; (IV) BANAKATH WITH MR S SONASL J JACASANIA ETC. FURNISHED BY THE LD. AR DURING THE C OURSE OF HEARING. (A) THE CORE CONTENTION OF THE REVENUE, AS RIGHTLY HIGHLIGHTED BY THE CIT (A), WAS THAT THE CONTRIBUTIONS AGGREGATING TO RS.190 CRORES MADE BY THE PARENTS/STUDENTS AT THE TIME OF ADMISSI ON IN THE ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 3 INSTITUTION WERE IN CONSIDERATION OF THE SERVICES T O BE RENDERED BY THE SCHOOL TO THE STUDENTS. IN CONTRAST, THE DOCUMENTAR Y EVIDENCES, ADDUCED BY THE ASSESSEE GO TO PROVE THAT THE AMOUNT S WERE, IN FACT NEITHER FIXED NOR IDENTICAL IN ALL THE CASES AND TO ILLUSTRATE THE CLASSICAL EXAMPLE THAT ALMOST 331 STUDENTS HAVE BEEN ADMITTED TO THE INSTITUTION WITHOUT RECEIVING A PENNY FOR SUCH A CO NTRIBUTION. THE ASSESSEE HAD, IN FACT, FURNISHED A LIST RUNNING INT O STAGGERING 29 PAGES SHOWING THE NAMES OF THE STUDENTS IN STANDARD-WISE AND ALSO THE CONTRIBUTIONS TOWARDS 'CORPUS FUND' (PAGES 111 - 13 8 OF PB FURNISHED BY THE LD. AR. COPIES OF LEDGER ACCOUNTS OF DIFFERE NT CORPUS FUNDS PRODUCED BY THE ASSESSEE FOR VERIFICATION EXHIBIT T HAT THE AMOUNTS RECEIVED HAVE BEEN CREDITED TO EACH FUND ACCOUNT OF EACH RECEIPT FROM THE PARENTS/STUDENTS. APART FROM SUCH CONTRIBUTIONS TOWARDS 'CORPUS FUNDS', IT WAS NOTICED THAT THE STUDENTS HAVE ALSO PAID TOWARDS TUITION FEES EVERY YEAR. HAD THE CONTRIBUTION COLLECTED BEE N TOWARDS EDUCATION TO BE IMPARTED BY THE SCHOOL AS ALLEGED BY THE REVE NUE, THE INSTITUTION WOULD NOT HAVE RESORTED TO CHARGE SEPARATELY THE MO NTHLY/QUARTERLY TUITION, TERM AND COMPUTER FEES? ANOTHER SALIENT FE ATURE NOTICED FROM THE EVIDENCES PRODUCED WAS THAT THE CONTRIBUTION BY WAY OF 'CORPUS DONATION' RANGES RS.10000 - 15000 WITH NO CONSEQUEN CE OF THE MEDIUM OF INSTRUCTION AND THE STANDARD IN WHICH THE WARD (STUDENT) WAS TO BE ADMITTED. BUT NOT ADMITTING, IF THE CONTR IBUTIONS WERE TO BE QUID PRO QUO AS CANVASSED BY THE REVENUE, THE SAME SHOULD HAVE BEEN QUITE DIFFERENT DEPENDING UPON THE MEDIUM OF INSTRU CTION-WISE AND STANDARD-WISE. ANOTHER SIGNIFICANT FEATURE OBSERVED WAS THAT THE ONE TIME PAYMENT OF VOLUNTARY CONTRIBUTION WAS - NON-RE FUNDABLE - TOWARDS DIFFERENT PURPOSES, VIZ,, LIBRARY, BUILDING S, SPORTS CURRICULUM ACTIVITIES ETC. WHEREAS THE TUITION FEES SO COLLECT ED WILL BE SPENT FOR ACADEMIC FIELD SUCH AS EDUCATION TO BE IMPARTED TO THE STUDENTS BY WAY OF STATIONARY, WORKSHOP, COMPUTER EDUCATION ETC . AS RIGHTLY REFUGE BY THE CIT (A) IN THE RULING OF THE HON'BLE APEX COURT IN THE CASE OF KEDARNATH JUTE MFG. LTD V. CIT (82 ITR 363 SC) TO OUTWIT THE AO'S CONTENTION THAT THE SO CALLED CONTRIBUTION SHO ULD HAVE BEEN REFLECTED IN THE I & E ACCOUNT. THE AO HAD RATHER F AILED TO DISTINGUISH THE RECEIPT, OF CORPUS FUNDS FROM TUITION FEES, NAM ELY, TO CREDIT THE DIFFERENT CORPUS FUND IS DIRECTLY ON THE BASIS OF T HE AMOUNT RECEIVED FROM THE PARENTS/STUDENTS; WHEREAS UNDER 'EDUCATION AL INFRASTRUCTURE FUND ACCOUNT' THE CREDIT IS BY WAY OF APPROPRIATION AT EVERY MONTH FROM TUITION FEES. AT A GLIMPSE OF THE SAMPLE COPY OF RECEIPT PRODUCED BY THE ASSESSEE AS PART OF EVIDENCE ( P 81 A 82 OF PAPERBOOK), IT WAS NOTICED THAT: PAGE.81 'RECEIPT TOWARDS TRUST'S CORPUS FUND RECEIV ED WITH THANKS CONTRIBUTION TOWARDS TRUST'S CORPUS FUND OF RS..... .: ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 4 I AFFIRM THE DONATION TO CORPUS FUND : SIGN OF DONO R' PAGE 82: RECEIPT NO... .. FORM NO.......... STD.... ............ NAME:.............................................. ...... FEES RECEIVED AS UNDER: QUARTERLY/MONTHLY TUITION FEE (QUARTER/PER MONTH)...... TERM FEE (ONE TERM) STATIONARY & WORKSHOP FEE COMPUTER FEE TOTAL THE ABOVE ILLUSTRATION MAKES IMPLICITLY CLEAR THAT THERE IS DISTINCTION BETWEEN THE 'TUITION FEES' AND 'CORPUS FUNDS. (B) FURTHER, THE BOARD OF TRUSTEES WERE EMPOWERED ( SOURCE; SUB- CLAUSE 5 OF CLAUSE 17 - FREE ENGLISH TRANSLATION RE CORDED SUPRA) TO ACCEPT ANY MONEY FOR THE OBJECTS OF THE TRUST AND, THUS, THE VOLUNTARY CONTRIBUTIONS GIVEN BY THE PARENTS/STUDENTS WERE TH E EXCLUSIVE PROPERTY OF THE TRUST WHICH REQUIRED TO BE UTILIZED FOR THE OBJECTS OF THE TRUST ONLY. (C) TAKING INTO ACCOUNT ALL THE FACTS AS DISCUSSED IN THE FOREGOING PARAGRAPHS, WE ARE OF THE CONSIDERED VIEW THAT THE STAND OF THE AO WAS RATHER MISCONCEIVED IN HOLDING THAT THE CONTRIB UTION 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 FUNDS AND AS SUCH EXEMPT U/S 12 OF THE ACT. THEREFO RE THE ORDER OF THE LD. CIT(A) IS CONFIRMED WITH RESPECT TO THIS ISSUE. ' 6. IN RESPECT OF GROUND NO. 2 AND 3 THE FINDING OF THE TRIBUNAL IS AS UNDER: 'WE HAVE CONCLUSIVELY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AS WELL AS THE REVENUE AND ALSO PERUSED THE VARIOUS DO CUMENTARY EVIDENCES ADDUCED BY THE ASSESSEE DURING THE COURSE OF HEARING. AS POINTED OUT BY THE CIT (A) THE FUND PROVIDED BY THE ASSESSEE TRUST HAS BEEN PAID TO THE VENDOR THROUGH ITS TRUSTEES AN D THEIR RELATIVES, PRECISELY, TO OUTSMART THE RESTRICTIONS ON TRANSFER OF AGRICULTURAL LANDS TO A NON-AGRICULTURIST - THE ASSESSEE TRUST.. SINCE THE AGRICULTURAL LANDS COULD BE PURCHASED ONLY BY AN AGRICULTURIST A S SUCH RESTRICTION WAS PREVAILED AT THAT RELEVANT TIME, ONE OF THE TRU STEES - MRS. RUPALI N KAPADIA, BEING AN AGRICULTURIST - W AS MADE AS A CONDUIT TO GET OVER THE RESTRICTION. ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 5 THE AO'S ALLEGATION THAT THE PURCHASE OF THE SAID L AND WAS INTENDED BY THE TRUSTEES FOR THEIR OWN BENEFITS/GAIN ETC, DO ESN'T HOLD WATER AS NO DOCUMENTARY EVIDENCE WAS BROUGHT ON RECORD TO TH WART THE ASSESSEE'S CLAIM. WITH REGARD TO THE PAYMENT MADE BY THE TRUSTEES TO THE VENDOR, IT WAS EXPLAINED THAT THE FUNDS PROVIDED BY THE TRUST HAS BEEN PAID THROUGH ITS TRUSTEES FOR THE REASONS RECORDED SUPRA AND THA T THE BANKHAT CLEARLY INDICATES THAT THE TRANSACTION WAS MADE FOR BEHALF AND ON THE ASSESSEE TRUST ONLY AND NOT FOR THE PERSONAL BENEFIT OF ANY OF THE TRUSTEES. AS HIGHLIGHTED BY THE CIT (A) IN THE IMPUGNED ORDER, T HE PAYMENT MADE TOWARDS PURCHASE OF LAND AND WAS SHOWN BY THE ASSES SEE IN ITS BOOKS OF ACCOUNT UNDER THE HEAD 'ADVANCE TOWARDS LAND' (A NNEXURE L TO THE AUDITED ANNUAL A/C) AND THE MANAGING TRUSTEE HAD NO T CLAIMED ANYWHERE IN HIS BOOKS OF ACCOUNT THAT THE SAID PAYM ENTS TOWARDS PURCHASE OF LAND. TO TOWERING ALL NEITHER THE MANAG ING TRUSTEE NOR ANY OF HIS RELATIVES FOR THAT MATTER HAVE CLAIMED T HAT THE SAID PURCHASE WAS MADE ON BEHALF OF THEM OR FOR THEIR OWN BENEFIT S. WE HAVE ALSO PERUSED THE CONFIRMATION OF ACCOUNTS FURNISHED BY S ONALBEN J JAKASANIA PLACED AT P 89 OF PAPER BOOK. THERE WERE ALSO NO DOCUMENTARY EVIDENCES TO ATTRIBUTE THAT THE SAID TR ANSACTION TOOK PLACE ONLY TO BENEFIT THE MANAGING TRUSTEE OR HIS R ELATIVES EXCEPT THAT THE FUNDS OF THE TRUST WERE ROUTED THROUGH THE TRUS TEES TO THE VENDOR WHICH MERELY EXHIBITS THE EXPEDIENCY WHICH PREVAILE D AT THAT RELEVANT TIME. MOREOVER, THE UTILIZATION OF THE TRUST FUND W AS NOT FOR PURCHASE OF AGRICULTURAL LAND AS INVESTMENT, BUT WAS A STEPP ING STONE TO SET UP AN EDUCATIONAL INSTITUTION IN THAT LAND. WE, THEREF ORE, DO NOT FIND ANY INFIRMITY IN THE CONCLUSION OF THE CIT (A) ON THIS POINT. WITH REGARD TO THE OBSERVATION OF THE AO THAT THE F UNDS OF THE TRUST CANNOT BE SAID TO BE PROPERLY UTILIZED FOR OBJECTS OF THE TRUST AS NO SALE- DEED HAD BEEN EXECUTED OR ANY CONSTRUCTION WORK WAS CARRIED OUT, WE FIND THAT BOTH THE CONTRACTORS - WHOM THE MONEY WAS ADVANCED TOWARDS THE CONSTRUCTION WORK TO BE CARRIED ON AT T HE SITE - IN THEIR LETTERS DT. 20.11.2010 CONFIRMED BEFORE THE AO THAT THEY WERE IN RECEIPT OF ADVANCES FOR THE PROPOSED CONSTRUCTION W ORK. THIS GOES TO PROVE THE GENUINENESS AND DEDICATION OF THE ASSESSE E TRUST TO SET UP AN EDUCATIONAL INSTITUTION FOR WHICH, IT HAD EXECUTED A BANAKHAT FOR PURCHASE OF LAND; AND FOR ACCOMPLISHING THE CONSTRU CTION OF THE BUILDING BY ADVANCING MONIES TO THE CONTRACTORS CAN NOT BE CASTIGATED AS IMPROPER UTILIZATION OF TRUST FUNDS. IN THESE CI RCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF CIT (A) TH AT 'THE ADVANCE GIVEN BY THE APPELLANT TRUST TO BOTH THESE CONTRACT ORS CANNOT BE SAID TO BE IMPROPER UTILIZATION OF TRUST FUNDS.' ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 6 MOVING ON TO THE OTHER ALLEGATION OF THE REVENUE TH AT THE EXCESSIVE SALARIES PAID TO SHRI M.N. KAPADIA AND SMT. RUPALI KAPADIA, WE WOULD LIKE TO REITERATE THAT DUE TO UNSTINTED EFFOR TS AND FARSIGHTEDNESS, SHRI KAPADIA HAS BEEN MANAGING A CHUNK OF STUDENT C OMMUNITY, ALSO CARRYING ON OTHER ADMINISTRATIVE WORK, BESIDES CO- ORDINATE WITH VARIOUS GOVERNMENT AGENCIES. HIS EXPERIENCE, ADMINI STRATIVE SKILL AND MANAGING A FLAGSHIP OF INSTITUTION CANNOT BE TH AT OF THE PRINCIPAL OF A SCHOOL/COLLEGE AND OTHER STAFF OF THE INSTITUT ION WHOSE ACTIVITIES WERE CONFINED TO THEIR RANKS, EXPERIENCE AND LIMITE D ROLE TO THEIR ASSIGNMENTS. THEREFORE, THE SALARIES OF SHRI M,N. K APADIA AND MRS. RUPAII KAPADIA CANNOT BE EQATED WITH THAT OF OTHER PERSONS WORKING IN THE INSTITUTION AT THE BEHEST OF THE ASSESSEE TR UST. WITH REGARD TO THE USE OF MOTOR CARS PROVIDED TO TH E TRUSTEES CANNOT ALSO BE CONSIDERED TO BE EXCESSIVE AMENITIES PROVID ED TO THEM. AS THEY WERE EXPECTED TO COMMUTE ON DAY-TO-DAY BASIS TO VAR IOUS GOVERNMENT AGENCIES AND OTHER ALLIED PLACES WHICH WERE SCATTER ED ALL OVER THE VAST CITY OF AHMEDABAD, THE ASSESSEE TRUST WAS EXPECTED TO EXTEND SUCH MINIMUM FACILITIES TO ITS TRUSTEES. THIS CANNOT BE BRANDED AT ANY STRETCH OF IMAGINATION THAT THE TRUSTEES HAVE BEEN PROVIDED WITH EXCESSIVE AMENITIES. THE AO'S OTHER ALLEGATION THAT THE ULTIMATE BENEFICIARY FROM THE STUDENT FEES AND CONTRIBUTION BEING THE FAMILY OF MANAGING TRUSTEES WAS ALSO WITHOUT ANY BASIS OR SUP PORTED BY ANY VALID DOCUMENTARY EVIDENCE. ON THE HAND THE ASSESSE E TRUST HAS BEEN MAGNANIMOUS IN ITS ENDEAVOR IN CONTRIBUTING LIBERAL LY BY WAY OF DONATIONS TO VARIOUS EDUCATIONAL INSTITUTIONS, BESI DES DISCHARGING ITS SOCIAL OBLIGATIONS BY ADMITTING MANY NEEDY STUDENTS WITHOUT COLLECTING ANY CONTRIBUTIONS, PROVIDING FREE EDUCAT ION, SUPPLYING OF TEXT BOOKS, UNIFORMS ETC; THE SERVICES RENDERED BY THE ASSESSEE TRUST HAS BEEN ACKNOWLEDGED BY: (I) VISAMOKIDS (PAGES 98 -104 OF P.B) (II) GUJRAT RESEARCH ORGANIZATION UNITY (PAGE S 107 & 108 OF P.B) (PLANNING GROUP) (III) MANAV SADHNA GANDHI ASHRAM (PAGE 109 OF P.B) (IV) PROCH. ORG (PAGE 110 OF P.B.) IN VIEW OF THE FACTS AND CIRCUMSTANCES AS DELIBERAT ED UPON IN THE FOREGOING PARAGRAPHS AND ALSO THE REASONS RECORDED EXHAUSTIVELY AND ELABORATELY IN THE IMPUGNED BY THE CIT(A), WE ARE O F THE CONSIDERED VIEW THAT THE ASSESSEE TRUST WAS ENTITLED TO EXEMPT ION U/S 11 AND 12 OF THE ACT. THE DEPARTMENT APPEAL IS DISMISSED.' RESPECTFULLY FOLLOWING THE ABOVE, THE REVENUE'S APP EALS ARE DISMISSED. ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 7 4. RESPECTFULLY FOLLOWING THE VIEWS SO EXPRESSED BY CO-ORDINATE BENCH, WE UPHOLD THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. GROUND NO.1 OF REVENUES APPEAL IS THUS DISMISSED. 5. GROUND NO.2 RAISED BY THE REVENUE RELATES TO DEL ETION OF ADDITION OF RS.56,78,373/- BEING THE DEPRECIATION DISALLOWED BY THE ASSESSING OFFICER. WE FIND THAT THIS ISSUE IS ALSO COVERED, IN FAVOUR OF THE ASSESSEE, BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST, REPORTED IN 198 ITR 598 (GUJ), WHEREIN IT WAS HELD AS UNDER:- 4. WHETHER DEPRECIATION HAS TO BE ALLOWED AS NECES SARY DEDUCTION FOR COMPUTING THE INCOME OF A CHARITABLE INSTITUTION WA S THE QUESTION WHICH CAME UP BEFORE THE KARNATAKA HIGH COURT IN CIT V. S OCIETY OF THE SISTER OF ST. ANNE [1984] 146 ITR 28. NOTICING THE DIFFERENCE BETWEEN THE WORD 'INCOME' AND THE EXPRESSION 'TOTAL INCOME' AND THE NECESSITY FOR PROVIDING DEPRECIATION IN ORDER TO MAINTAIN CORRECT ACCOUNTS, THE HIGH COURT HELD THAT THE AMOUNT OF DEPRECIATION DEBITED TO THE ACCOUNTS OF THE CHARITABLE INSTITUTION HAS TO BE DEDUCTED TO ARRIVE AT THE INC OME AVAILABLE FOR APPLICATION TO CHARITABLE AND RELIGIOUS PURPOSES. SAME VIEW HAS BEEN TAKEN BY THE MADHYA PRADESH HIGH COURT IN CIT V. RAIPUR PALLOTTI NE SOCIETY [1989] 180 ITR 579. 5. IN CIT V. RAO BAHADUR CALAVALA CUNNAN CHETTY CHA RITIES [1982] 135 ITR 485, THE MADRAS HIGH COURT WAS REQUIRED TO CONSIDER WHETHER, FOR THE PURPOSE OF COMPUTING ACCUMULATION IN EXCESS OF 25 P ER CENT. AS LAID DOWN IN SECTION 11(1)(A) OF THE ACT, 'INCOME' HAS TO BE COMPUTED UNDER THE VARIOUS HEADS ENUMERATED IN THE INCOME-TAX ACT. IT HELD THAT THE INCOME FROM THE PROPERTIES HELD UNDER TRUST WOULD HAVE TO BE ARRIVED AT IN THE NORMAL COMMERCIAL MANNER WITHOUT CLASSIFICATION UND ER THE VARIOUS HEADS SET OUT IN SECTION 14. IT HELD THAT THE EXPRESSION 'INCOME' HAS TO BE UNDERSTOOD IN THE POPULAR GENERAL SENSE AND NOT IN THE SENSE IN WHICH THE INCOME IS ARRIVED AT FOR THE PURPOSE OF ASSESSMENT TO TAX BY APPLICATION OF SOME ARTIFICIAL PROVISIONS EITHER GIVING OR DENYING DEDUCTION. IT OBSERVED THAT THE COMPUTATION UNDER THE DIFFERENT CATEGORIES OR H EADS ARISES ONLY FOR THE PURPOSES OF ASCERTAINING THE TOTAL INCOME FOR THE P URPOSES OF CHARGE. THOSE PROVISIONS CANNOT BE INTRODUCED TO FIND OUT WHAT TH E INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST TO BE EXCLUDED FROM THE T OTAL INCOME IS, FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III. ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 8 6. WE ARE IN RESPECTFUL AGREEMENT WITH THE VIEW TAK EN BY THE KARNATAKA, MADHYA PRADESH AND MADRAS HIGH COURTS. WE, THEREFOR E, ANSWER BOTH THE QUESTION REFERRED TO US IN THE AFFIRMATIVE AND AGAI NST THE REVENUE. WE ALSO FIND THAT A CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE DCIT VS. SARDAR PATEL INSTITUTE OF PUBLIC ADMINISTR ATION FOR ASSESSMENT YEAR 2008-09 HAS ALSO DEALT WITH THE SAME ISSUE, WH EREIN THE TRIBUNAL HAS HELD AS UNDER:- 4. BEFORE US LD. CIT-DR HAS SUPPORTED THE ASSESSME NT ORDER AND MADE SUBMISSION THAT THE VIEW OF THE ASSESSING OFFICER W AS CORRECT. ON THE CONTRARY, THE LD. AR FOR THE ASSESSEE ARGUED THAT T HE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA) I S NOT APPLICABLE IN THE PRESENT CASE. THE AR FURTHER ARGUED THAT IN THE IDE NTICAL FACTS AND CIRCUMSTANCES OF HON'BLE PUNJAB AND HARYANA HIGH CO URT HAS DISTINGUISHED THE JUDGMENT OF THE HON'BLE SUPREME C OURT IN FAVOUR OF THE ASSESSEE. THE LD. AR HAS RELIED UPON THE FOLLOWING CASE LAWS:- I) CIT V. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST 198 ITR 590 (GUJ) II) CIT V. INSTITUTE OF BANKING PERSONNEL SELECTION 264 ITR 110 (BOM) III) CIT V. SOCIETY OF THE SISTERS OF ST. ANNE 146 ITR 28 (KER) IV) CIT V. RAIPUR PALLOTTINE SOCIETY 180 ITR 579 (M P) V) CIT V. MARKET COMMITTEE, PIPLI 330 ITR 16 (P&H) VI) CIT V. TINY TOTS EDUCATION SOCIETY 330 ITR 21 ( P&H) WE HAVE CONSIDERED FACTS AND CIRCUMSTANCES OF THE C ASE AND SUBMISSIONS MADE BY THE RESPECTIVE REPRESENTATIVES OF THE PARTI ES. THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM FOLLOWING THE JUDGMENT PAS SED BY THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA). WE FIND THE HON'BLE HIGH COURT PUNJAB AND HARYANA HAS DISTINGUISHED THE JUDG MENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. TINY TOTS EDUCA TION SOCIETY 330 ITR 21 (P&H). IN VIEW OF THE FACT THAT THE ISSUE HAS AL READY BEEN SETTLED BY THE HON'BLE HIGH COURT OF PUNJAB & HARYANA RESPECTFULLY FOLLOWING THE RATIO LAID THEREIN WE FIND NO INFIRMITY INTO THE IMPUGNED ORDER OF THE LD. CIT(A). IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE LIGHT OF THE VIEWS SO EXPRESSED BY HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF SHETH MANILAL RANCHHODDAS VISH RAM BHAVAN TRUST (SUPRA) AND ALSO CONSIDERING THE DECISION OF CO-ORD INATE BENCH OF THIS TRIBUNAL IN THE CASE OF SARDAR PATEL INSTITUTE OF P UBLIC ADMINISTRATION (SUPRA), THE GRIEVANCE RAISED BY THE REVENUE IN THI S GROUND IS DEVOID OF ANY ITA NOS. 2403 & CO 208 /AHD/2016 ASSESSEE - NH KAPADIYA EDUCATION TRUST AY : 2012-13 9 LEGALLY SUSTAINABLE MERITS. WE, ACCORDINGLY, REJECT THE SAME AND APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT(A). ACCO RDINGLY, GROUND NO.2 OF THE REVENUES APPEAL IS ALSO DISMISSED. 9. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 10. SO FAR AS THE CROSS-OBJECTION FILED BY THE ASSE SSEE IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE CROSS-OB JECTION; HENCE THE SAME IS REJECTED. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE CROSS-OBJECTION FILED BY THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9 TH APRIL, 2018 AT AHMEDABAD. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 09/04/2018 *BIJU T., SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- 06.04.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06.04.2018 OTHER MEMBER 09.04.2018. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 09.04.2018 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 09.04.2018 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09. 04.2018 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER