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March 2015

Educational institution- Exemption u/s. 11- A.Y. 2007-08- Capital expenditure incurred for attainment of object of institution is application of income- Assessee is entitled to exemption u/s. 11-

By K. B. Bhujle Advocate
Reading Time 1 mins
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CIT vs. Silicon Institute of Technology; 370 ITR 567 (Orissa)

The main object of the assessee trust was to impart education. Year after year the assessee generated profits and created fixed assets. The assessee claimed capital expenditure as application of income u/s. 11. The Assessing Officer held that the assessee was not entitled to exemption u/s. 11 inter alia on the ground that the capital expenses were not application of income. CIT(A) and the Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Orissa High Court upheld the decision of the Tribunal and held as under:

“If capital expenditure is incurred by an educational institution for attainment of the objects of the society, it would be entitled to exemption u/s. 11. Thererfore, the assessee was eligible for exemption u/s. 11.”

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