Corpus donations for a building fund are capital receipts and excluded from aggregate annual receipts, preserving exemption entitlement.

Corpus donations given with specific directions for a building fund are treated as capital receipts and excluded from the assessee's aggregate annual receipts for entitlement to exemption under section 10(23C)(iiiad) of the Income-tax Act. The classification principle applied distinguishes directed capital contributions from operational/revenue receipts; where operational receipts alone fall below the statutory threshold, the directed corpus does not defeat exemption eligibility. The practical effect is that directed building-fund donations do not increase aggregate annual receipts for the exemption test, supporting grant of the exemption to the assessee.

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Issues: Whether voluntarily received corpus donations given with specific directions for building fund form part of the aggregate annual receipts for the purpose of claiming exemption under section 10(23C)(iiiad) of the Income-tax Act, 1961.

Analysis: The issue concerns whether aggregate annual receipts for an educational institution should include capital contributions received with specific directions for infrastructure (building fund) or whether such receipts qualify as capital/corpus receipts excluded from annual receipts. The taxation provision sets a threshold based on aggregate annual receipts for entitlement to exemption; therefore classification of receipts as capital or revenue directly affects eligibility. Prior decisions of coordinate benches and higher fora were considered, which treat corpus donations given for specific capital purposes as capital receipts not forming part of annual receipts for the statutory exemption threshold. The factual record shows the assessee's receipts from operations were below the statutory threshold while separate voluntary donations were directed to a building fund.

Conclusion: Corpus donations received with specific directions for building fund are capital receipts and shall not be included in aggregate annual receipts for the purpose of claiming exemption under section 10(23C)(iiiad) of the Income-tax Act, 1961; accordingly the exemption is allowed in favour of the assessee.

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