Tuesday, May 17, 2016

Proviso to sec. 2(15) won't apply if management institute is running business to impart practical training to students

a) The assessee-society was an educational institution running courses of B. Tech, M. Tech and MBA, etc.

b) It was also running a textile division which was engaged in manufacturing of cloth and yarn and was attached to very institution for imparting practical training to students. 

c) Textile division of assessee incurred a huge loss which was adjusted against profits generated from educational institution.

d) The DIT(E) held that the assessee was doing business as well as was engaged in educational activity and, therefore, it was hit by proviso to section 2(15), inserted by the Finance Act, 2008. In view of activities of the assessee, the registration granted to it under section 12AA was withdrawn.