2014 (5) TMI 1178

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....r object of the trust. 3. The Ld. CIT(A) has erred in deleting addition of Rs. 61,75,469/- on account of interest from bank on the ground that it has been credited to earmarked fund account ignoring the fact that it is a revenue receipt and ought to have been credited to Income and Expenditure Account and thereafter considered for application towards the objects of the trust as accounting treatment given by the assessee does not affect its character of being income u/s 12(1) r.w.s. 56(1) of the Income Tax Act, 1961. 4. The Ld. CIT(A) has erred in deleting addition of Rs. 1,34,65,953/- on account of cash donations which were not credited to income and expenditure account on the ground that these donations are received with specific directions to form part of the corpus fund ignoring the fact that no evidence of such directions was produced either before the A.O. or before the Ld. CIT(A). 5. The Ld. CIT(A) has erred in holding that donations received in kind are not income for the purpose of section 12(1) on the ground that there is no provision for treating such donation as income u/s 12(1) r.w.s. 2(24)(iia) in spite of the fact that there is no specific p....

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....ported in 330 ITR 16 (P&H) 3. CIT Vs. Tiny Tots Education Society reported in 330 ITR 21 (P&H) 4. DCIT Vs. Market Committee Admur, reported in 13 DTR 157 (Delhi). Accordingly, it was submitted that the Ld. CIT(A) was justified in deleting the disallowance made by the Assessing Officer. 5. We have considered the submissions of both the parties and carefully gone through the material available on the record. It appears that the Ld. CIT(A) deleted the disallowance made by the Assessing Officer in accordance with the judgment of the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Market Committee (Supra) and no contrary decision was brought to our notice. We, therefore, do not see any merit in these grounds of the departmental appeal. 6. Grounds No. 3 and 4 of the departmental appeal are correlated, so these are decided simultaneously. 7. Facts related to these issues in brief are that the Assessing Officer treated the voluntary contribution for specific purpose towards earmarked funds of Rs. 1,34,65,953/- and interest on deposit with bank of earmarked funds of Rs. 61,75,469/-, which were corpus as income for the purpose of Section 10 (23C)(....

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.... their consulting fee will be 15 per cent as against 20 percent in case of those who will not give donation, and such donations being towards corpus of the trust fund, such voluntary donations did not constitute income in the hands of assessee. 9.3.3. The Allahabad High Court in the case of Sri Dwarkadheesh Charitable Trust Vs. Income Tax Officer, reported in 98 ITR 557 held that Charitable trust-Exemption under s. 12(2)-Voluntary contribution by charitable trust with a specific direction that they shall form part of corpus and earmarked as corpus of donee-trust-Such corpus fund does not form part of voluntary contributions that are income under s. 12(1),-The subject of donation becomes part of corpus or capital of the donee trust and outside the purview of s. 12(2). In view of the above, it is clear that the above funds shall not be part of the total income of the appellant trust. The grounds of appeal are allowed." The Ld. CIT(A) by following the aforesaid decision of his predecessor, deleted the disallowance made by the Assessing Officer. Now the department is in appeal. 9. The ld. D.R. strongly supported the order of the Assessing Officer and reiterated the....

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.... The last issue vide ground No. 5 of the departmental appeal relates to the action of the Ld. CIT(A) in holding that the donations received in kind were not income for the purpose of Section 12(1) of the Act. 13. The facts related to this issue in brief are that the Assessing Officer during the course of assessment proceedings, noticed that the assessee had received voluntary contribution in the form of gold and silver jewellery but did not treat the same as its income. He, therefore, treated the same as deemed income as per provisions of Section 12(1) of the Act. 14. Being aggrieved, the assessee carried the matter to the Ld. CIT(A). and submitted that the donation received in kind did not come under the definition of income u/s 2(24) of the Act, therefore, it could not be the income of the trust u/s 12(1) of the Act and that the acceptance of donation in kind does not come in purview of income u/s 2(24)(iia) for the purpose of Section 11 of the Act. It was further stated that the voluntary contribution received in kind by the assessee should have been treated as capital receipt and not the income within the meaning of Section 2(24) of the Act. 15. The Ld. CIT(A) after co....