2008 (4) TMI 11

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....ritable Trust registered under Section 12A(1) of the Act. It is running a hospital called Jaipur Golden Hospital at 2-Institutional Area, Rohini, New Delhi. It filed its income tax return for the assessment year 2000-01 declaring Nil income. In the course of assessment proceedings, it was noticed by the Assessing Officer that Assessee had received donations from 61 consulting doctors who had opted to give donations of Rs.10,000/- each under the terms and conditions. According to the terms and conditions, the Assessee was entitled to deduct 20% of the consulting charges and the balance amount to be paid to the consulting doctors. It further provided that if the consulting doctors paid donations of Rs. 10,000/- then they would be entitled to ....

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.... the said donations were not forced donations. 6.         Thus, the question arises as to whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the donation of Rs.6,10,000/- received by the Assessee from doctors towards corpus holding are voluntary in nature in view of the provisions laid down in Sections 11 and 12 of the Act. 7.         It is contended by the learned counsel for the Revenue that donations were not given by the doctors out of their own free will but were given under a contract. The mere fact that out of 141 doctors, 61 doctors had opted for such scheme, did not convert the forced contrib....

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....arat High court that:- On the plain reading of section 12, it is obvious that any voluntary contribution which is made with a specific direction that they shall form part of the corpus of the trust or institution would not be deemed to be income derived from the property held under trust wholly for charitable or religious purposes. Thus, the donation of Rs.1,85,064/- which was received by the Assessee-trust with a specific direction for construction of wadi formed part of the corpus of the trust and was not income of the trust. 11.       Further, Section 11 of the Act also is worded in the same way as expression within the parenthesis of Section 12. Section 11 of the Act deals with income derived from pro....