Case Law Details
ACIT Vs Padmshree Dr. D.Y. Patil University (ITAT Mumbai)
Before us, the main plea of the Ld. CIT-DR was that the development fee collected by the assessee trust on the basis of a single fee receipt from the students, shows that the students didn’t had any option but to mandatorily give/remit the fees (including the development fees which is part of regular tuition fees). According to the Ld. CIT-DR, the assessee shows such development fees as corpus funds, but since such corpus funds had been collected compulsorily from the students, the same cannot be given benefit u/s 1 1(1)(d) of the Act. However, we note that the AO based on copy of fee receipt from which it was evident that development fees was also collected, has formed an opinion that the assessee is collecting the corpus fund involuntarily from the students. This action of the AO cannot be per-se treated as incriminating material, because the fee receipt in question is in public domain; and not discovered during search for the first time. And it is not the case of AO that assessee has been collecting the development fee without any receipt being given to the students and done the same secretly without accounting for it in its books; or neither, there was any complaint from the students/parents against giving this development fees nor the AO has made any inquiry after he discovered about assessee collecting development fee from students and has come to factual conclusion after inquiry that assessee was in fact compulsorily extracting the development fee/corpus in-voluntarily from students. In the absence of any complaint or inquiry as aforestated merely because copy of fee receipt was found during search which [ fee receipt] include the item of development fees, cannot be a ground to form an opinion that the same was compulsory extracted from the students and so, it is hit by the section 1 1(1)(d) of the Act. In such a scenario the same cannot be termed as incriminating material qua the asses see for these years (AY.2011-12 & AY.2012-13).
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These are appeals preferred by the revenue against the order of the Ld. CIT(A)-49, Mumbai dated 13.03.2021 for A.Y.2011-12 & 2012-13. Since both the sides agree that issues are similar for both assessment years, the decision rendered in the lead case will determine the outcome of the other assessment year also. Therefore, we take up the grounds of appeals in respect of A.Y.201 1-12 as the lead case.
2. Ground No. 1 to 3 are preferred by Revenue against the action of the Ld. CIT(A) allowing exemption of Rs.4,86,28,2891- by not treating the developer fees collected from students by assessee as revenue in nature. The Ld. CIT(A) also did not accept the contention of the AO that the benefit of Section 1 1(1)(d) of the Income Tax Act, 1961 (hereinafter “the Act”) was not available to the assessee since the development fee was not voluntarily given by the student to the assessee and was part of single receipt. The Ld. CIT(A) also did not accept the contention of the AO that the developer fees collected from the students was mandatorily collected from them and so, there was no choice for the students but to give it.
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