Judgment : R. Sudhakar, J. 1. This appeal is filed by the Revenue challenging the order of the Income Tax Appellate Tribunal 'B' Bench, Chennai, dated 28.10.2013 made in ITA No.1800/Mds/2012 for the assessment year 2004-2005, raising the following substantial question of law: “Whether on the facts and in the circumstances of the case and the grounds raised herein, the Tribunal was right in holding that the receipt from the sale of bonds and property had to be excluded from the aggregate receipts received during the year by treating the said receipts as capital receipt and non-recurring receipt in nature and thereby arriving at the aggregate receipts of less than 1 Crore and consequently holding that assessee is entitled to exemption under Section 10(23C)(iiiad)?” 2.1. The facts in a nutshell are as under: The assessee, namely, Madarasa-E-Bhakhiyath-Us-Salihath, was established in the year 1886 under the Tamil Nadu Societies Registration Act, 1860 for the purpose of running a college for Arabic language, literature and culture and the same is affiliated to the Madras University. 2.2. During the financial year 2003-2004, the assessee was in receipt of Rs.51,86,887/- by way of annual income, but the assessee expended about Rs.70,07,959/- (before considering the depreciation of Rs.22,034/-). During the financial year 2003-2004, the assessee sold its land for a value of Rs.2 Crores and bonds for a value of Rs.69,13,717/-. Out of the sale proceeds, the assessee invested Rs.2.50 Crores for the purpose of purchasing property from a developer. The assessee claimed before the Assessing Officer that the annual receipt of the assessee during the financial year is Rs.51,86,887/-, being the annual and recurring income of the assessee. The sale proceeds of the land and bonds are capital receipts and not recurring income, as such income is received once in a life time out of sale of asset. It was contended before the Assessing Officer that the sale proceeds of land and bonds is not an annual receipt and the same should be excluded while considering the annual receipts of the assessee/trust for the purpose of considering the monetary limit prescribed under Section 10(23C)(iiiad) of the Act. The assessee also claimed exemption stating that it is an educational institution and the income of the assessee is an exempt income. 2.3. The Assessing Officer held that the assessee/Trust was not registered under Section 12A of the Income Tax Act (for brevity, “the Act”). The assessee also claimed exemption stating that it is an educational institution and the income of the assessee is an exempt income. 2.3. The Assessing Officer held that the assessee/Trust was not registered under Section 12A of the Income Tax Act (for brevity, “the Act”). The Assessing Officer primarily comes to the conclusion that the assessee trust is not pursuing activities which are solely for educational purpose. The finding of the Assessing Officer about educational activities of the trust was reversed by the Commissioner of Income Tax (Appeals) and the Revenue is not aggrieved thereby. Insofar as the receipt of amount on sale of land and bonds, referred supra, the Assessing Officer came to the conclusion that the receipt, as above, exceeds the limit prescribed under Section 10(23C) of the Act and, therefore, the assessee is not eligible for exemption under Section 10(23C)(iiiad) of the Act. 2.4. The Commissioner of Income Tax (Appeals), while accepting the plea of the assessee that the sale proceeds of land and bonds is capital in nature and not recurring income, held that 85% of the sale proceeds have been expended by the assessee in furtherance of the object of the Trust and allowed the appeal. 2.5. Assailing the said order passed by the Commissioner of Income Tax (Appeals), the department preferred an appeal before the Tribunal and the Tribunal, while accepting the finding rendered by the Commissioner of Income Tax (Appeals), held as under: “11. So far as monetary limitation provided under section 10(23C)(iiiad) is concerned, the assessee has received annual receipt by way of rent of Rs.51,86,887/-, which is below Rs.1.00 Crore. In so far as other receipts i.e. sale proceeds from land and bonds received by the assessee of Rs.2.00 Crores is concerned, those items were purchased by the assessee long back and sold in the year under consideration and purchased property and the receipts out of that property were used for the purpose of maintaining the assessee's educational institution. The Assessing Officer has included both items as annual receipts of Rs.51,86,887/- and sale proceeds from sale of land and bonds to the tune of Rs.2.00 Crores and denied exemption. The ld. CIT (Appeals) came to a conclusion that the sale proceeds out of sale of land and bonds will not amount to annual receipt and granted relief to the assessee. We find that the ld. The ld. CIT (Appeals) came to a conclusion that the sale proceeds out of sale of land and bonds will not amount to annual receipt and granted relief to the assessee. We find that the ld. CIT (Appeals) has rightly classified the annual receipts during the financial year 2003-04 at Rs.51,86,887/- being the annual and recurring income of the assessee. The sale proceeds of land and bonds which are capital receipts in nature, are not recurring and are once in a lifetime. In our opinion, the ld. CIT (Appeals) has rightly classified the annual receipts and granted exemption to the assessee under section 10 (23C)(iiiad) of the Act.” 2.6. Aggrieved by the said order passed by the Tribunal, the Revenue has filed this appeal raising the substantial question of law, referred supra. 3. We have heard Mr. Narayanasamy, learned Senior Standing Counsel appearing for the assessee and perused the order passed by the Tribunal and the authorities below. 4. Before adverting to the merits of the case, it is apposite to refer to Section 10(23C)(iiiad) of the Act, which reads as under: “Section 10. Incomes not included in total income.- In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included - ..... (23C) any income received by any person on behalf of-- (i) to (iiiac) ...... (iiiad) any university or other educational institution existing solely for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not exceed the amount of annual receipts as may be prescribed” 5. We find that in the above said provision the key emphasis is on the words “annual receipts”. The sale proceeds of land and bonds cannot be equated to annual receipts as stated under Section 10(23C) of the Act. The sale in the case on hand is in the nature of conversion of a capital asset from one form to another. Therefore, the denial of the benefit of Section 10(23C) of the Act to the assessee by the Assessing Officer was rightly interfered with by the Commissioner of Income Tax (Appeals) and confirmed by the Tribunal. In such view of the matter, we hold that the appeal is devoid of merits and no substantial question of law arises for our consideration. Accordingly, this appeal is dismissed.