ITAT Ahmedabad: Assessee wins on restoration issue, "Corpus Fund" confirmed.

The Third Member of ITAT Ahmedabad Benches ruled in favor of the assessee in a case involving the restoration of the matter to CIT(A) or Tribunal's decision. The Third Member found that the issue did not require restoration to CIT(A) as the Revenue did not raise specific grounds of appeal. Additionally, the Third Member agreed with the JM's decision on the nature of the "Corpus Fund" and concluded that the amount indeed constituted the "Corpus Fund" based on evidence provided by the assessee. The matter was directed to the Division Bench for further proceedings in line with the majority view.

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Issues:
1. Restoration of the matter to CIT(A) or Tribunal's decision
2. Requirement of inquiry to decide the nature of "Corpus Fund"
3. Determination of whether the amount constituted the "Corpus Fund"

Analysis:
1. The matter was referred to the Third Member due to a difference in opinion between the Judicial Member (JM) and Accountant Member (AM) of ITAT Ahmedabad Benches. The questions referred by the Hon'ble President included whether the matter should be sent back to CIT(A) for a fresh decision or decided by the Tribunal based on the proposed orders. The Third Member, after considering submissions, found that the issue did not require restoration to CIT(A) as the Revenue did not raise any grounds of appeal regarding the violation of Rule 46A or the admission of additional evidence. Thus, the Third Member sided with the JM's order, concluding in favor of the assessee.

2. The question of whether an inquiry was necessary to determine the nature of the "Corpus Fund" was considered. The Third Member noted that the AO had the discretion to decide the extent of inquiry required. In this case, the assessee had provided detailed account books and receipts where the "Corpus Fund" was clearly identified and signed by trust employees. The AO's failure to conduct further inquiry based on the nature of receipts was deemed inappropriate. The Third Member agreed with the JM's decision, ruling in favor of the assessee and against the Revenue.

3. Regarding the determination of whether the amount constituted the "Corpus Fund," the Third Member relied on the answers to the previous questions. Considering that the CIT(A) had accepted declarations from all 60 donors certifying their donations towards the corpus fund and the Revenue did not challenge this admission, the Third Member concluded that the amount indeed constituted the "Corpus Fund." Therefore, all three questions referred to the Third Member were answered in favor of the assessee, aligning with the JM's orders. The matter was directed to the Division Bench for further proceedings based on the majority view.

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