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Facts
The assessee declared an amount of Rs. 51,92,000/- as corpus donations in its balance sheet, claiming it was received for laboratory equipment costs. The revenue contended that these development fees were collected as part of consolidated fees and were not properly directed towards a corpus fund, hence liable to be treated as revenue.
Held
The Tribunal held that the assessee failed to provide evidence showing the donors intended the development fees to be part of a corpus fund. The collection of these fees was in line with government-permitted fees for private colleges, and the break-up indicated a fixed amount collected from students, not a voluntary donation for a corpus.
Key Issues
Whether the development fees collected by the educational institution are to be treated as corpus donations or revenue.
Sections Cited
Section 2(24) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MADHUSUDAN SAWDIA
Assessee represented by Shri S.K. Sabat, A.R. Department represented by Shri Sanjib Banerjee, Sr.DR Date of hearing 23/02/2026 Date of pronouncement 23/02/2026 O R D E R PER: BENCH 1. This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC, Delhi in Appeal No. CIT(A), Bhubaneswar-3/10117/2018-19 dated 12/12/2025 for the A.Y. 2016-17.
Shri S.K. Sabat, ld. A.R. appeared on behalf of the assessee and Shri Sanjib Banerjee, Sr.DR represented on behalf of the revenue.
It was submitted by the ld. AR that in the course of assessment, the Assessing Officer had brought to tax an amount of Rs. 51,92,000/- shown by the assessee in its balance sheet as corpus donations. It was the submission that the said amount was received towards the laboratory equipment cost which has been directly taken to the balance sheet. The break up of the same was shown at page No. 29 of the paper book which reads as follows:
It was the submission that the development charges were collected inline with the direction of the Government of Orissa wherein the Government has permitted the private colleges to collect development fees which is shown at page No. 41, para. 9.2 of the paper book which reads as follows:
New Hope Society Vs ITO (E) The ld. AR further drew our attention to the depreciation schedule on the fixed assets as on 31/03/2016 (page No. 28 of the paper book) which shows the total value of laboratory equipment as on 31/03/2016 at Rs. 18,81,621/-. It was the submission that the development fees were used for the laboratory equipment.
In reply, the ld. Sr.DR submitted that the assessee has not been able to produce any receipts to show that the development fees has been directed to be paid towards the corpus. It was the submission that the same is liable to be treated as revenue.
We have considered the rival submissions. A perusal of the depreciation schedule on the fixed assets as on 31/03/2016 (page No. 28 of the paper book) shows that the opening balance of the laboratory equipment is Rs. 17,85,571.52. The additions during the year is Rs. 76,450/- for a period of more than six months and Rs. 19,500/- for a period of less than six months. The same is not found in agreement with the submission of the ld. AR. Further the assessee, admittedly, has not been able to produce any evidence before us to show that the persons who have given the development fees have desired that the development fees is to be taken to the corpus fund. In fact, a perusal of the break up of the development fees collected, shows that the fixed amount has been collected from the students as has been admitted by the ld. AR of the assessee, this is a part of the consolidated fees which has been broken down by the assessee in its accounts in line with the maximum fees permissible to be collected by the government. Admittedly, New Hope Society Vs ITO (E) this is not a corpus donation. This being so, we find no error in the orders of the Assessing Officer and the ld. CIT(A) which calls for any interference.
In the result, this appeal of the assessee is dismissed. Order dictated and pronounced in the open court on 23/02/2026.