Assessee's Appeals Allowed: Donations to Unregistered Trust Capital in Nature

The appeals by the assessee against the common order passed by NFAC for assessment years 2010-11 and 2012-13 were allowed. The tribunal held that specific voluntary donations towards the corpus of a trust, even for unregistered trusts, are not taxable as they are considered capital in nature. The denial of exemption for not having registration u/s. 12AA of the Act was overturned, and the additions made by the AO on account of corpus contributions treated as revenue receipts were deemed unjustified.

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Issues:
Appeal against common order passed by NFAC for assessment years 2010-11 and 2012-13. Whether addition made by AO on account of corpus contribution as revenue receipts justified.

Analysis:
1. The appeals by the assessee were against the common order passed by NFAC for assessment years 2010-11 and 2012-13. As the issues raised in both appeals were similar based on identical facts, the tribunal decided to hear and pass a consolidated order for convenience.

2. In the appeal for A.Y. 2010-11, the main issue was whether the CIT(A) was correct in confirming the addition made by the AO on account of corpus contribution treated as revenue receipts. The assessee, a society registered under the Bombay Public Trust Act, operated a blood bank and received voluntary donations for specific purposes, treating them as capital receipts in the balance sheet. Both authorities disallowed corpus donations as revenue receipts due to the absence of registration u/s. 12AA of the Act.

3. The tribunal referred to a previous case involving Serum Institute of India Research Foundation, where it was held that voluntary contributions specifically received towards the corpus of the trust cannot be taxed, even without registration u/s. 12AA. The tribunal found similarities between the previous case and the current one, where the assessee received donations towards its trust corpus, which were capital in nature and not taxable. Therefore, the order of the CIT(A) disallowing the exemption due to lack of registration u/s. 12AA was deemed unjustified, and the grounds raised by the assessee were allowed.

4. In the appeal for A.Y. 2012-13, the issues and facts were identical to the appeal for A.Y. 2010-11. The tribunal decided that the findings given in the earlier appeal would apply mutatis mutandis to this appeal as well. Consequently, the appeal of the assessee for A.Y. 2012-13 was also allowed.

5. In conclusion, both appeals by the assessee were allowed, and the denial of exemption for not having registration u/s. 12AA of the Act was overturned. The tribunal held that specific voluntary donations towards the corpus of a trust, even for unregistered trusts, are not taxable, as they are considered capital in nature.

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