Indraprastha Institute of Information Technology vs. Assessment Unit, Income Tax Department

Parties Involved

Facts Summary

The assessee, Indraprastha Institute of Information Technology, is a State University created by an Act of Govt. of NCT of Delhi and functions under the aegis of the Department of Training and Technical Education, Govt. of NCT of Delhi. The Institute is operating from its permanent campus at Okhla Phase-III, New Delhi, and imparts education in engineering to Undergraduate, Postgraduate, and Ph.D. Scholars. The Institute is registered under section 12AA of the Income-tax Act, 1961, and enjoys exemption under section 11 of the Act. During the assessment year 2021-22, the assessee made a provision for leave encashment on an actuarial basis amounting to Rs. 1,41,11,525/- and claimed it as an application of income. The Assessing Officer disallowed this provision on the ground that it was not actually expended. The assessee argued that under the accrual system of accounting, it is eligible to claim an expenditure as an application of income irrespective of its actual payment.…

Legal Issues

• 1. Whether the provision made for leave encashment on the basis of actuarial valuation could be considered as an application of income.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• ACIT Circle-74(1), New Delhi vs. Indian Institute of Technology, Delhi

  Delhi Bench benchAY 2012-13Dismissed

• M/s. Consortium for Technical Education Vs. The Commissioner of Income Tax (Exemption), Chennai

• Sudesh Chander Talwar vs. DCIT, Circle-29, Kolkata

  Kolkata Bench benchAY 2018-19Allowed

• International Union Against Tuberculosis and Lung Disease vs. Shri Prakash Dubey, CIT(Exemption), Delhi

  Delhi Bench ‘E’ benchAY 2024-25Allowed

• M/s. Bharath Institute of Schooling Education Vs. The Commissioner of Income Tax (Exemptions), Bangalore

  Bangalore benchAY N.A.Allowed

• Puja Foundation vs. CIT(E)

  Ahmedabad bench