Mumbai University
The ITAT order allows the university to claim tax exemption under Section 10(23C)(iiiab) of the Income-Tax (I-T) Act for the financial year 2017-18. The dispute arose as the I-T department denied the university tax exemption on the ground that govt grants accounted for less than 50% of its total receipts. The university had reported total receipts of around Rs 250 crore during the year, including student fees, govt grants and other income. The I-T department had calculated the university’s govt grants at around Rs 52.3 crore and concluded that the prescribed threshold was not met. Consequently, it held that the university’s taxable income (receipts minus expenditure) was Rs 40.1 crore. On the land issue, the ITAT noted that the university’s Fort campus was situated on land granted by govt in 1918 on a long-term lease of 945 years, while another plot at Kalina was also provided by the state govt.
Mumbai: The University of Mumbai secured a major tax relief after the Income Tax Appellate Tribunal (ITAT), Mumbai bench, ruled that grants received from the University Grants Commission (UGC) and notional interest on govt-provided land can be counted while determining whether an educational institution is substantially financed by govt. This recent order was pronounced by a bench comprising Saktijit Dey, vice-president, and Makarand Vasant Mahadeokar, accountant member. The university argued that the calculation was incomplete. It submitted that grants received from the UGC should be treated as govt grants since the commission distributes funds received from the Centre to universities. It also contended that the value of land provided by govt should be recognised as govt assistance, with notional interest on the land included in the funding calculation.