TaxTMI 
TaxTMI 
2017 (4) TMI 765
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....are decided against the assessee. 2.1. Ground No.4 that the CIT(A) did not appreciate that all surplus / corpus donation of the assessee was exempted u/s.11 therefore, the provisions of Section 164 (2) of the Act is not applicable. This ground was also not pressed by the learned Counsel for the assessee, therefore, this ground is dismissed as not pressed. 3. The only ground remained for adjudication or argued by the learned Counsel for the assessee is that the amount of Rs. 10,56,555/- is a capital receipt, hence, not taxable. The learned Counsel advance arguments which is identical to the ground raised by contending that this issue is covered by the decision of the Tribunal dated 10/08/2016 in the case of Chandraprabhu Jain Swetamber Mandir vs ACIT (ITA No.230/M/2016). The learned DR Shri Purushottam Kumar defended the addition and contended that the aforesaid order of the tribunal has not been accepted by the department and appeal is likely to be filed before the Hon'ble High Court. The learned Counsel for the assessee also relied upon the decision of the Delhi Bench of the Tribunal in the Case of Patanjali Yogpeth (Nyas) vs. ADIT (Exemption)(2017) 78 Taxmann.com 128 (D....
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....orting evidence, therefore, the trust was assessed as AOP and also taxed at marginal maximum rate u/s 167B(1) of the Act. On perusal of the Balance Sheet of the assessee, the A.O. noted that the assessee has received a corpus donations, the details of which are as under:- 1. Building fund - Rs. 50,000/- 2. Dev Dravya fund - Rs. 2,92,066/- 3. Gyan Fund - Rs. 41,541/- 4. Veya Vacha fund - Rs. 1,809/- 5. Akhand Deepak fund - Rs. 12,951/- 6. Dadawadi fund - Rs. 25,020/- 7. Jiv Daya fund - Rs. 18,063/- 8. Ayambil fund - Rs. 13,996/- Total - Rs. 4,55,446/- The A.O. asked the assessee to explain why corpus fund donations received of Rs. 4,55,446/- should not be added to the income of the assessee and taxed as deduction u/s 11 is not available to the trust. The assessee submitted that any receipt cannot be taxed unless it is an income within the meaning of section 2(24)(iia) r.w.s. 12 of the Act. It is submitted by the assessee that contribution made with a specific direction that they shall form part of the corpus of the trust would not be considered as inc....
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.... thus being capital receipts cannot be taxed. Thus, it was submitted that by virtue of provisions of Section 11(1)(d) and Section 12(1) of the Act , donations received towards corpus of the trust/various funds shall not be deemed to be income derived from property held under trust wholly for charitable or religious purposes. It was submitted that receipt cannot be taxed as income unless it is an income within meaning of Section 2(24)(iia) of the Act read with Section 12 of the Act. Section 12 of the Act makes it clear that contributions made with a specific directions that they shall form part of the corpus of the trust or institution shall not be considered as income of the trust. The assessee also submitted that being AOP, by virtue of provisions of Section 56(2)(vii) of the Act, such receipts are not taxable in the hands of the assesse as income from other sources. It was also submitted that the AO also erred in taxing the assessee's income at maximum marginal rate in the status of AOP. It was submitted that no part of the assesse income is liable to be charged at maximum marginal rates since no part of the income of the assessee enures or is used or applied directly or indi....
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..... 7. The ld. Counsel for the assessee submitted that the assessee is religious charitable trust duly registered under the Bombay Public Trust Act,1950. It is submitted that the assessee has received corpus donations of Rs. 4,55,446/- during the previous year relevant to the assessment year. The learned counsel submitted that the assessee is not registered u/s 12AA of the Act. The assessee has received corpus donations of Rs. 4,55,466/- which cannot be charged to tax under the Act. The learned counsel submitted that the assessee could not trace the application made to the CIT for applying for copy of certificate of registration u/s 12A/ 12AA of the Act , which was not rejected by the CIT and the same shall be deemed to be granted. It was submitted that the A.O. denied the exemption to the assessee and brought to tax corpus donation at maximum marginal rate of tax. It is submitted that there is corpus donations of Rs. 4,55,446/- which is not taxable even if the Trust is not registered under 12A/12AA of the Act. It is submitted that the donors have donated the corpus donations with specific directions about its application towards specific purpose for which the respective funds wer....
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....951/- 6. Dadawadi fund - Rs. 25,020/- 7. Jiv Daya fund - Rs. 18,063/- 8. Ayambil fund - Rs. 13,996/- Total - Rs. 4,55,446/- These above stated specific donations given by the donors to be utilized for specific purposes cannot be diverted for any other purposes by the assessee and are credited to the respective funds in the Balance Sheet , and utilization thereof is also reflected from these specific funds. We have gone through the case laws relied upon by the assesse as set out above and have observed that the Courts/Tribunals have taken a consistent view that these corpus donations are held to be capital receipts being capital in nature and are not taxable despite the fact that trust is not registered u/s 12A/12AA of the Act. In ITO(E) v. Basanti Devi & Shri Chakhan Lal Garg Education Trust in ITA no. 5082(Del.) 2010 for assessment year 2002-03 vide orders dated 19-01- 2011, ITAT, Delhi relying on ITAT, Delhi decision in the taxpayers own case for assessment year 2003-04 whereby the Tribunal held that the amount received by the tax-payer trust from its settler, towards infrastructure fund, was not taxable in th....
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.... fund and corpus donation as it is being generally used with respect to a trust. A corpus fund denotes a permanent fund kept for the basic expenditures needed for the administration and survival of the organisation. The corpus fund is generally not allowed to be utilised for the attainment of the purposes, but the interest/dividend accused on such fund can be utilised as well as accumulated. Such fund can also be used for creation of capital asset or property of the trust from which income can be generated. Corpus fund are generally created out of corpus donation. A donation will be treated as corpus donation only if it is accompanied by a specific written direction of the donor. In the absence of any written direction of the donor, a contribution of grant cannot be transferred to corpus fund. In the present case, the donor, the Bhaktivedanta Book Trust has very categorically in his letter, while providing money to the appellant trust, has mentioned the amount of Rs. 68,50,000 as corpus donation and such amount has been used by the trust for purchasing the land and giving money on interest as loan. Therefore, the amount of Rs. 68,50,000 shown by the appellant trust has been found t....
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....hey shall form part of the corpus of the religious endowment can never be considered as income. In the case of R. B. Shreeram Religious & Charitable Trust v. CIT [1988] 172 ITR 373 (SC) it was held by the Bombay High Court that even ignoring the amendment to section 12, which means that even before the words appearing to parenthesis in the present section 12, it cannot be held that voluntary contributors specifically received towards the corpus of the trust may be brought to tax. The aforesaid decision was followed by the Bombay High Court in the case of CIT v. Trustees of Kasturbai Scindia Commission Trust[1991] 189 ITR 5 (Bom). The position after the amendment is a fortiori. In the present cases the Assessing Officer on evidence has accepted the facts that all the donations have been received towards the corpus of the endowments. In view of this clear finding, it is not possible to hold that they are to be assessed as income of the assessees. We, therefore, hold that the assessment of the corpus donations cannot be supported. 12. For the above reasons, we hold as under : 1. The religious endowments are not invalid on the ground that neither the temple nor the image had been....
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.... v. ITO [1975] 98 ITR 557 (All) and Dy. CIT v. Nasik Gymkhana [2001] 77 ITD 500 (Pune). 6. We have heard the learned representatives of the parties and records perused. The grievance of the Revenue is that the Commissioner of Incometax (Appeals) has wrongly followed the judgment of the hon'ble Delhi High Court in I. T. A. No. 5082/Del./2010, whereas that order has been challenged before the hon'ble Supreme Court. The Revenue did not dispute the facts. We noticed that the Commissioner of Income-tax (Appeals) after considering the decision of three Tribunals, i.e., Income-tax Appellate Tribunal, Delhi in the case of ITO (Exemption) v. Smt. Basanti Devi & Shri Chakhan Lal Garg Education Trust [IT Appeal No. 5082 (Delhi) of 2010, dated 30-1-2009] the Revenue filed appeal before the hon'ble Delhi High Court. The hon'ble Delhi High Court confirmed the order of the Income-tax Appellate Tribunal, the Revenue filed appeal before the hon'ble Supreme Court, which has been dismissed for non-prosecution vide judgment Civil Appeal Nos. 7036 of 2011, judgment dated January 28, 2013, Income-tax Appellate Tribunal Chennai Bench in the case of Pentafour Software Employees Welf....