1979 (10) TMI 101

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....nce a small sum.  At the beginning of S.Y. 2029 the Trust fund or corpus stood at Rs. 8,000. 3. In the course of S.Y. 2029 the assessee received two donations one of them was a sum of Rs. 30,000 received from J. and another was sum of Rs. 1,00,000 received from JP. The donors made the donations specifically towards the corpus of the Trust Fund.  The sum of Rs. 1,30,000 was credited to the trust fund account in the books of  the assessee. 4. The final accounts of the assessee for S.Y. 2029 show that the trust fund account stood at the end of the year in the sum of Rs. 1,38,000 comprised of the above mentioned amounts. No amount has been debited to the said account in the course of the year.  The accounts and the Bal....

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....75 and that, therefore, the assessment was barred by the period of limitation on 1st March, 1978.  Another objection was to the addition of Rs. 1,30,000. The AAC held that the assessment was not barred by the period of limitation, but at the same time he held that the income was reduced by Rs. 1,30,000.  Incidentally he also upheld another addition of Rs. 501. 8. It is, in these circumstances, that both sides have come up before us in the two matters now under consideration. We have considered the relevant facts and circumstances, the orders of the authorities below and the submissions put forward on behalf of both the sides. 9. A preliminary point has been raised in the assessee's cross objection. The point is that the asse....

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....t. 12. The case of the Department is that since the assessee-trust had incurred expenditure of about Rs. 26,000 in the course of the year and it is clear that it did not have any resources than contributions of Rs. 1,30,000 for incurring the expenditure, the said contributions have not formed part of the corpus of the Trust.  Now, in our opinion, when there are no entries in the accounts nor any other material to show that the expenditure was incurred by drawings upon the trust fund, it cannot be said that the contributions did not form part of the corpus of the Trust. It may be that the bank or cash balance on which the assessee drew for making the expenditure had been augmented by the contributions received by it, but this is not ....