The Tax Publishers2020 TaxPub(DT) 0400 (Kol-Trib) : (2020) 182 ITD 0282

INCOME TAX ACT, 1961

Section 11

Assessee received contribution towards development fund from students, apart from the tuition fees, with the clear understanding that it would be solely used for creation of capital asset necessary for achieving educational objects of assessee society and, therefore, same formed part of the corpus and, therefore, not in the nature of revenue receipts. AO was accordingly directed to re-compute income of assessee society after excluding development fees from the purview of section 11.

Charitable trust - Exemption under section 11 - Development fund received from students with clear purpose for creation of capital assets treated as revenue receipts by AO -

Assessee, an educational society, received contribution towards development fund from students, apart from the tuition fees for development of the school building and associated infrastructure inter alia including purchase of capital equipment to support educational activities. Assessee contended that merely because contributions from students were collected under nomenclature of development fee, same could not ipso facto lead to conclusion that it could not be considered to be corpus contribution. Held: Assessee received contribution towards development fund from students, apart from the tuition fees, with the clear understanding that it would be solely used for creation of capital asset necessary for achieving educational objects of assessee society and, therefore, same formed part of the corpus and, therefore, not in the nature of revenue receipts. AO was accordingly directed to re-compute income of assessee society after excluding development fees from the purview of section 11.

REFERRED : DIT (E) v. National Association of Software & Services Co's. (2012) 345 ITR 362 (Del) : 2012 TaxPub(DT) 2049 (Del-HC), Sukhdeo Charity Estate v. ITO (1991) 192 ITR 615 (Raj) : 1991 TaxPub(DT) 1411 (Raj-HC) and DIT v. Sri Ramakrishna Seva Ashrama (2013) 357 ITR 731 (Karn) : 2012 TaxPub(DT) 1661 (Karn-HC).

FAVOUR : In assessee's favour.

A.Y. : 2010-11


INCOME TAX ACT, 1961

Section 11

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