Case Law Details
ACIT (E) Vs Scholars Education Trust of India (ITAT Jaipur)
The dispute before us is on the limited point whether the receipt on account of development fund/development fee from the students of the assessee is in the category of capital receipts/corpus fund to be used by the assessee for specific purpose or not. So far as a voluntary donation or contribution for specific purpose is received by the trust or institution the same would be classified as capital receipt for being part of the corpus fund for specific purpose for which such donation is given by the donor.
However the question arises in the case of the assessee is whether the receipt on account of development fee collected from the students is a voluntary contribution/donation or it is a compulsory payment by the students for continuing the studying in the educational institutions of the assessee.
We find that the said payment is received by the assessee along with the tuition fee, term fee and other charges in a single receipt of fees which the students are making periodical payments. It is imperative to ascertain whether such payment received from the students along with the tuition fee, term fee and other charges is a voluntary payment/contribution/donation for specific purpose of development or it is a compulsory payment by the students.
The term voluntary refers to an act of once’s own free will and discretion and not a compulsion or an obligatory. In the case of the assessee the development fee is part of the total fee charged by the assessee from the students and it is apparent that the quantum of amount and specific purpose on account of which this fee is received from the students is determined and decided by the assesee and not by the students or their parents.
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