Corpus donations to an unregistered trust treated as capital receipts, with tax addition deleted.

Voluntary contributions received as corpus donations by an unregistered trust were treated as capital receipts, not taxable income, because the amounts were shown in the trust deed and accounts as common-pool corpus funds supported by donations from multiple contributors. The Tribunal followed its earlier view that corpus donations do not become taxable merely because the trust lacks registration under Section 12AA, and no distinguishing facts were established to depart from that principle. The addition was deleted, giving relief to the assessee.

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Issues: Whether voluntary contributions received towards the corpus fund of an unregistered trust were taxable as income.

Analysis: The contributions were shown to have been made by 64 persons to the common pool of the trust and were supported by the trust deed and accounts. The Tribunal treated the case as identical to the earlier decision holding that corpus donations constitute capital receipts and are not taxable merely because the trust does not hold registration under Section 12AA. On the facts, no distinguishing feature was shown to displace that principle.

Conclusion: The corpus contributions were held to be capital receipts and not taxable income, and the addition was deleted in favour of the assessee.

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