Case: Ideal Education Society Ghaziabad vs Addl. CIT Ghaziabad, ITAT Delhi

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The assessee was registered as a society and charitable trust. It provided the following facilities to its students:

  • Education for various professional courses
  • Hostel and transportation facilities at an additional cost

Revenue’s Arguments:

  • Hostel and transport facilities are separate businesses and cannot be covered as the charitable purpose (u/s 2(15) of the Act).
  • A separate books of accounts needs to be maintained for both business activity and income derived from business shall not be exempted u/s 11(4A).

Tribunal Holding:

  • Hostel and transport facilities were incidental activities related to primary activity, i.e., offering education.
  • Activities related to the primary activity cannot be considered as the main business activity and exemption cannot be denied on this ground.

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