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2012 (5) TMI 236 - AT - Income TaxEducation trust - corpus fund - amount charged from students against various funds directed credited to balance sheet - AO denied the exemption and held as current income - held that:- AO has failed to appreciate that the appellant trust has not made any appropriations from the corpus donations after having received the same. It appears that AO has mixed up the facts of Educational Research Fund with the other funds such as building fund, library fund, staff welfare fund, student welfare fund etc. The distinctions between the same are that the former is mainly appropriation at 50% out of tuition fees whereas the later is specifically donated by the parents/students but the bifurcation of the aggregate amount is made as per the decision of board of trustees such as 30% towards building fund and educational Research Fund etc. - AO was not justified in holding contributions towards different corpus funds totalling to ₹ 1,90,01,319/- as current income liable to tax. - Decided in favor of assessee. Allegation of payment on behalf of trustee - held that:- There evidences to attribute that the said transaction took place only to benefit the managing trustee or his relatives except that the funds of the trust were routed through the trustees to the vendor which merely exhibits the expediency which prevailed at that relevant time. Cancellation of registration - charitable purpose - section 2(15) - held that:- it makes it crystal clear that the amended provision of s.2(15) of the Act will come into fore only that the advancement of any other object of general public utility shall not be a charitable purpose, 'if it involves the carrying on of any activity in the nature of trade, commerce or business…'. In the case under consideration, the assessee trust did not in anyway involve itself in indulging in carrying on of any activity in the nature to any trade, commerce or business. Therefore, the question of bringing the assessee trust's case under the ambit of the amended provisions of s. 2(15) of the Act doesn't arise. - Decided in favor of assessee. - DIT(E) was not justified in resorting to cancel the registration granted to the assessee trust earlier - Decided in favor of assessee.
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