The Delhi bench of Income Tax Appellate Tribunal (ITAT) recently allowed income tax exemptions to educational institutions for income of fine, lab free, founder day charges, photograph charges.
Assesssee Pushp Niketan School Samiti is an educational institution. The assessee filed its return of income declaring total income at NIL. The case of the assessee was taken up for scrutiny assessment. After the scrutiny assessment assessing officer made addition amount in respect of disallowance of expenses being non-vouched. Further, he made addition in respect of Corpus fund and addition in respect of interest income amounting to Rs.2,45,757/-. Against the order assessee filed appeal before ITAT.
On the written submission made by the assessee states that income of fine, Lab fee, Founder day charges, photograph charges are integral part of running of school and the interest is incidental to such activity and also the receipt of running the educational institute is eligible for exemption under section 10(23C)(iii ad) of the Income Tax Act,1961
Om Parkash counsel for the revenue as per P&L Account, the assessee has shown other income of Rs.2,45,757/- that is accrued income which is not exempted.
The other income shown by the assessee only included other receipts, interest on FDR and interest on HDFC Bank,which didi not include Lab fee, Founder day charges, photograph charges.
After considering the contention of the both sides the single bench of the ITAT Kul Bharat, Judicial Member allowed the appeal filed by the assessee and observed that the amount also included the Lab fee, Founder day charges, photograph charges etc which was certainly related to the income of the educational institute.
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