ISHWAR DAYAL PARSANDI DEVI VIDHYA PRASARNI SABHA,BULABDSHAHR vs. ADDL.CIT, CIRCLE EXEMPTION, GHAZIABAD

Briefly stated the facts of the case are that the appellant is running educational institution and is registered with Registrar of Society, Uttar Pradesh under Society Registration Act. The appellant also avails the benefit of section 80G of the Act.

During the course of the scrutiny assessment proceedings the Assessing Officer noticed that under the head capital expenditure the assessee has claimed repayment of loan of Rs.82,66,627/- as application of income. The Assessing Officer was of the firm belief that repayment of loan is not an allowable expense and if the repayment of loan is allowed the same tantamount to claim double deduction. Accordingly the claim was disallowed.

The assesssee carried the matter before the CIT(A) but without any success.

Before me the counsel for the assessee drew the attention to the circular No.100 dated 24.01.1973 issued by the CBDT and stated that the board has accepted the repayment of debt as application of income. The counsel further stated that in the immediately preceding year 2014-15 after scrutinizing the return of income the Assessing Officer had allowed the repayment of debt as application of income.

I have carefully considered the orders of the authorities below. I find force in the contention of the Ld. Counsel the CBDT circular No.100 dated 24.01.1973 read as under :-

Further I find that while framing the assessment for A. Y. 2014-15 framed u/s. 143 (3) of the Act the Assessing Officer at clause 6 of that order has allowed the repayment of loan of Rs.8098470/- as application of income.

In the result, the appeal is filed by the assessee is allowed. Order pronounced in the open court on 25.04.2019.