TaxTMI 
TaxTMI 
2018 (9) TMI 1625
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....umstances of the case, Ld. CIT(A) ought to have treated the 'corpus fund' as 'capital receipt' irrespective of the fact that appellant society was not registered u/s 12A/12AA of Income Tax Act, 1961 and Ld. CIT(A) ought to have deleted the addition. 3. That in any case and in any view of the matter, action of Ld. CTT(A) in confirming the action of Ld. AO in making addition of Rs. 5 crores on account of corpus fund as alleged income of assessee, is bad in law and against the facts and circumstances of the case. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making disallowance of Rs. 94,66,932/- on account of depreciation claimed by assessee on the ground that grant/subsidy received from Govt. of Uttarakhand should not be included in the actual cost of asset and that too by recording incorrect facts and findings and in violation of principles of natural justice. 5. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making disallowance of Rs. 94,66,932/- on account of depreciation, is bad i....
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.... that assessee earned interest of Rs. 55,21,641/-, on which no tax was paid. It was also observed that assessee was not granted exemption under section 12 A/12 AA of the Act. Under these circumstances, case of assessee was converted into complete scrutiny, based on which notice under section 142 (1) along with questionnaire was issued calling upon assessee to file various details/information regarding organisation and its objects. From details so filed, Ld.AO observed that assessee received grant from Government of Uttarakhand amounting to Rs. 5 crores, on which assessee earned interest of Rs. 55,21,641/-. Ld.AO accordingly called upon assessee to show cause, as to why, grant received from Director of Sports, should not be taxed as income of society, in view of definition of income under section 2 (24) of the Act and, why, interest income earned on FDs should not be treated as "Income from Other Sources". 2.2. In response to query raised, assessee submitted that money received by Society from Government of Uttarakhand was towards corpus, as is evident from letter of approval issued in respect of the same. It was submitted by assessee that these funds were to be expended only aft....
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.... of this Tribunal, Mumbai Benches, in Chandraprabhu Jain Swetamber Mandir vs ACIT, reported in (2017) 82 Taxmann.com 245. Ld.AR submitted that Ld. CIT (A) rejected assessee's claim only for the reason that word "corpus" is not mentioned in letter specifically. 4.2. Ld.AR further submitted that taxability of contributions towards 'corpus fund' of an Institution is de hors registration, under section 12 A/12 AA of the Act, and therefore authorities below erred in treating the amount received towards 'corpus fund' as 'revenue receipt' in the hands of assessee. He submitted that assessee received said fund from Government of Uttarakhand, with specific directions in the manner it has to be applied towards specific purpose. He thus submitted that amount received from State Government cannot be regarded as income under section 2 (24) (iia) of the Act, which applies only to voluntary contributions. 4.3. On the contrary Ld.Sr.DR placed reliance upon orders of authorities below, and submitted that funds received by assessee falls under the purview of section 2 (24) (iia) of the Act. It has been submitted that assessee is not carrying out any charitable activity as defined under section....
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....to 3 raised by assessee stand allowed. 7. Ground No. 4-5 has been raised by assessee on disallowance of depreciation claimed amounting to Rs. 94, 66, 932/-. 7.1. Ld.AR submitted that Ld.AO disallowed depreciation claimed, in light of Explanation 10 to section 43 (1) of the Act. He submitted that disallowance made by Ld. AO is on the ground that, above funds received from Secretary Sports Department, Uttarakhand, was treated by Ld.AO as subsidy and construction having owned by Sports department, Uttarakhand. Ld.AR emphasised that Principal Secretary, Sports Department, Uttarakhand is Chairperson for regulating and monitoring construction of civil works of assessee. He is in the capacity of a trustee for assessee and any sum received for purposes of construction, would be towards 'corpus'. It is also submitted that any construction so made would be included in assets of assessee on which depreciation cannot be denied. 7.2. Ld. Sr. DR placed reliance upon the orders of authorities below. 8. We have perused submissions advanced by both the sides in the light of records placed before us. 8.1. It is observed that Principal Secretary, Uttarakhand on 29/03/11 directed Sports....