Hundi coupon donations for construction deemed corpus contributions, therefore not includible in trust income under trust taxation rules.

Whether donations received through hundi coupons without complete donor identity qualify as corpus contributions was examined by reference to the distinction between voluntary contributions and contributions given with a specific direction to form part of the corpus. The tribunal accepted that the hundi coupons expressly directed amounts for building construction and that the amounts were applied accordingly; anonymous donation provisions were inapplicable to the years under consideration. Consequently, such purpose directed hundi donations were held to be corpus contributions and not includible in the trust's income under the applicable trust income provisions; revenue appeals were dismissed.

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Issues: Whether donations received through hundi coupons/anonymous instruments, without complete donor identity, but indicating that amounts were for construction (specific purpose), qualify as voluntary contributions made with a specific direction to form part of the corpus of the trust and hence are not includible in income under section 11 read with section 12 of the Income-tax Act, 1961.

Analysis: The Tribunal considered the statutory provisions, namely section 12(1) and section 11(1)(d) of the Income-tax Act, 1961, which distinguish voluntary contributions from contributions made with a specific direction that they shall form part of the corpus. The Assessing Officer treated hundi-originated donations as income on the basis that the assessee did not furnish complete donor identities. The assessee produced hundi coupons which specifically stated that donations were for building construction; the First Appellate Authority accepted that these donations were collected for a specific purpose and were corpus contributions. The Tribunal noted that the anonymous-donation provision (section 115BBC) was introduced w.e.f. assessment year 2007-08 and is not applicable to the assessment years under consideration. On the facts, the donations carried specific direction for corpus use and were applied accordingly, and the lack of complete donor identity did not, in the circumstances, negate the specific direction evidenced by the hundi coupons and related records.

Conclusion: The donations received through hundi coupons with a specific direction for construction (forming part of the corpus) are not includible in the assessee's income under section 11 read with section 12 of the Income-tax Act, 1961; the revenue's appeals are dismissed and the assessee's cross-objections are rejected (not pressed).

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