Case Law Details
Maharishi Markandeshwar Trust Vs ACIT (ITAT Delhi)
Held that the development fees received from students for acquisition of Fixed Assets and utilized for acquisition of Capital Assets, taken directly to corpus fund, is allowed as capital receipt
Facts-
The assessee has been running various Educational Institutes in various fields such as medical, engineering, law, management etc. Annual fees, charges and Development funds are collected by the Institutions under the Trust. AO observed that the appellant has received a development fee in addition to tuition fees from all the students on a compulsory basis. AO held that the Development fee was a part of the fee structure which was to be paid by the students to the institutes.
The appellant has shown the tuition fee as a part of the income and expenditure statement as income whereas the development fee has been taken directly to the balance sheet as a corpus fund. AO was of the opinion that such development fee was not on account of voluntary corpus fund and therefore the same should have been included in the revenue expenditure in the income and expenditure statement.
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