TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 1245
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....mount received by way of Corpus Fund though the same is not taxable as it is not "Income" and/or is capital receipt. 2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred confirming the addition of sum of Rs. 2,30,00,000/- being Corpus contribution received by the appellant being a Trust is not taxable as per the provisions of the Act. 3. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred confirming the addition of sum of Rs. 2,30,00,000/- being amount received from Bank of India only on the basis that the Trust is not registered u/s. 12A of the Act, though the said amount is Corpus of the fund and irrespective of the fact that whether trust is registered or not, the accounting principles as well as per Income tax Act, the said income is not income with the meaning and definition of Income. CIT(A) without considering the various judgments confirmed the additions and also without proper application of facts and law. 4. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in deletin....
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.... could not be held as its income. Though the A.O accepted the reply of the assessee that the amount of Rs. 3,47,82,601/- received from its members, being covered by the doctrine of mutuality could not be brought to tax, but he was not persuaded to subscribe to a similar claim raised by the assessee as regards the amount of Rs. 2,30,00,000/- received from the Bank of India. The A.O observed that 'Income' as defined under Sec. 2(24)(iia) took within its sweep voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes, or by an association or institution referred to in Clause (21) or Clause (23) or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) [or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via)] of clause (23C), of Sec. 10 or by an electoral trust. The A.O was of the view that every contribution received by a trust was to be taken as its income. Further, it was observed by him that as per....
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....lying on the judgment of the Hon'ble Supreme Court in the case of Bangalore Club Vs. CIT & Anr (2015) 350 ITR 509 (SC) concluded that the interest income earned by the assessee from the deposits held with the banks would not be covered by the doctrine of mutuality and would be liable to be brought to tax in the hands of the assessee. On the basis of his aforesaid observations, the A.O held the entire interest income of Rs. 2,31,23,086/- shown by the assessee in its Income & Expenditure account as the income of the assessee within the meaning of Sec. 2(15) of the Act. The A.O on the basis of his aforesaid deliberations assessed the income of the assessee trust at Rs. 4,61,23,090/-. 6. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions of the assessee, observed that as the objects of the assessee trust were limited to the benefit of its employees, thus the A.O had rightly concluded that it was not a charitable trust but only a mutual association. It was further observed by the CIT(A) that as the registration under Sec. 12A of the Act was rejected by the DIT (Exemptions), Mumbai, vide his order dated 22.02.2011, th....
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....i "B" Bench in the case of M/s Pentafour Software Employees Welfare Foundation Vs. ACIT, Company Circle V(2), Chennai (ITA No. 751/MDS/2007, dated 08.07.2008) had concluded that donations towards corpus of the trust were not to form part of its income, irrespective of the fact that the trust was not registered under Sec. 12A of the Act. The Ld. A.R further submitted that the lower authorities had erred in not allowing under Sec. 57(iii) the expenses which were incurred by the assessee for the objects and administration of the trust viz. (i) demat charges :Rs. 386/-; (ii) legal expenses :Rs. 11,236/- ; and (iii) medical relief expenses :Rs. 3,09,66,723/-. It was further submitted by the Ld. A.R that a direction be issued to the lower authorities that in case if the registration of the assessee trust was restored under Sec. 12A then a consequential effect be given to the same. Per contra, the Ld. Departmental Representative (for short 'D.R) relied on the orders of the lower authorities. It was submitted by the Ld. D.R that as the assessee trust was not registered under Sec. 12A of the Act, therefore, the corpus receipts had rightly been brought to tax by the lower authorities as the ....
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....sed under Sec. 12AA(3) of the Act, dated 22.02.2011, was thus not registered under Sec. 12A of the Act. We are persuaded to be in agreement with the observations of the lower authorities that as the assessee trust was not registered under Sec. 12A, hence it was disentitled from taking recourse to Sec. 11(1)(d) and seek exclusion from its total income the amount of Rs. 2,30,00,000/- received towards corpus fund from the bank. However, we find from a perusal of the orders of the lower authorities that the assessee had at no stage sought exclusion of the amounts received by it towards corpus fund from the scope of its total income by invoking the provisions contemplated under Sec. 11(1)(d) of the Act. Rather, the contention of the assessee before the lower authorities as well as before us was that the registration of a trust under Sec. 12A would not change the character of the receipt in its hands. We find that the assessee had throughout canvassed that the corpus receipts being in the nature of a capital receipt in the hands of the assessee trust, would thus not be liable for being taxed as the income of the trust. We have perused the orders of the lower authorities and the material ....
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....the case of Chandrabahu Jain Swetamber Mandir Vs. ACIT (2016) 50 ITR (Trib) 355 (Mum). In the aforementioned case, the corpus donations of Rs. 4,55,446/- received by the assessee trust which was not registered under Sec.12A/12AA of the Act, were brought to tax as the income of the assessee within the meaning of Sec.2(24)(iia) r.w. Sec. 11 of the Act. The A.O while subjecting the aforesaid corpus donations to tax as the income of the assessee, had observed that as the assessee trust was not registered under Sec.12A, therefore, the provisions of Sec.11(1)(d) excluding from the income of the trust the funds received towards corpus fund with specific directions for its utilization, would not be applicable. However, on appeal the Tribunal observing that as the aforesaid corpus donations of Rs. 4,55,446/- received by the assessee trust were capital receipts, therefore, the same could not be brought to tax, despite the fact that the assessee trust was not registered under Sec.12A/12AA of the Act. We further find that a similar view was also arrived at by the ITAT, Delhi in the case of ITO (Exemption) Vs. Smt. Basanti Devi and Shri Chakhan Lal Garg Education Trust (ITA No. 5082/Del/2010, d....
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....ssessee trust from Bank of India towards corpus fund is in the nature of a 'capital receipt', therefore, the same could not have been brought to tax as the income of the assessee under Sec. 2(24)(iia) of the Act. Before parting, we may herein observe that the revenue being aggrieved with the order of the High Court of Delhi in the case of DIT (Exemption) Vs. Smt. Basanti Devi and Shri Chakhan Lal Garg Education Trust [ITA No. 927 of 2009, dated 23.09.2009], had assailed the same before the Hon'ble Supreme Court, which however was dismissed for non-prosecution by the Hon'ble Apex Court, vide its order dated 28.01.2013 passed in civil appeal no. 7036 of 2011. We thus, in terms of our aforesaid observations delete the addition of Rs. 2,30,00,000/- sustained by the CIT(A) in respect of the corpus donations received by the assessee trust from Bank of India. The Grounds of appeal Nos. 1 to 3 raised by the assessee are allowed in terms of our aforesaid observations. 12. The assessee had further assailed before us the order of the CIT(A) on the ground that he had erred in not deleting the addition of interest income of Rs. 28,03,868/- that was wrongly made by the A.O. The ld. A.R taking u....
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.... Particulars Amount 1. D-mat charges Rs.386/- 2. Legal Expenses Rs.11,236/- 3. Medical Relief Rs.3,09,66,723/- We find that as observed by us hereinabove, the assessee trust was set up for the medical assistance of the retired employees of Bank of India. The employees who would retire from the bank were allowed to become a member under the scheme of the assessee trust within a period of 6 months from the date of retirement on paying of one time membership fees. On becoming a member of the assessee trust, assistance was provided to them and their spouses by way of reimbursement of medical insurance premium, hospitalisation expenses and domiciliary expenses, though with a ceiling as provided under the scheme. We find that as observed by the A.O, the assessee had in its 'Income & Expenditure a/c' for the year under consideration viz. A.Y 2012-13 credited interest income of Rs. 2,31,23,086/- on the FDR's and bank accounts. As against the said interest income, the assessee had debited expenses aggregating to Rs. 3,09,78,345.30 ,viz. (i) Dmat charges of Rs. 386/-; (ii) Legal expenses of Rs. 11,236/-; and (iii) Medical Relief Expenses Rs. 3,09,66,723/-. We find that the low....