TMI Blog2023 (6) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... a receipt to be treated as forming part of the corpus. As decided in case of Shri Ramakrishan Seva Ashrama [ 2011 (10) TMI 369 - KARNATAKA HIGH COURT ] wherein it was held that Where donation received by assessee-trust is kept in deposit account and income earned therefrom is utilized for charitable purposes, assessee is entitled to benefit of exemption u/s 11(1)(d) in respect of said income. Ground No.1 raised by the assessee allowed. Excess cash deposits into the bank account - HELD THAT:- We note that the position taken by the AO is that since total cash deposits into the bank account exceeded the total fees received, the excess needs to be treated as income of the assessee. However, we note that reconciliation filed before the Bench clearly states that there should not be any difference. We note that it is second round of appeal before this Tribunal on the same issue, hence we note that third inning should not be given to the assessee for this small addition. Thus addition sustained partly. - Decided partly in favour of assessee. - ITA No. 212/SRT/2023 - - - Dated:- 16-6-2023 - Shri Pawan Singh, Jm And Dr. A. L. Saini, Am For the Assessee : Shri Hiren Vepari, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out prejudice to the above, the learned CIT(A) ought to have granted benefit of over application to the extent of Rs. 5,53,016, which would have absorbed addition of Rs. 2,00,000 and Rs. 3,80,657 stated in Ground No.(II) and (III) respectively. (V) The assessee craves leave to all, alter or vary any of the grounds of appeal. 3. At the outset, Learned Counsel for the assessee informs the Bench that assessee does not wish to press Ground Nos.2 and 4 raised by assessee, therefore we dismiss Grounds Nos.2 and 4 raised by the assessee, as not pressed. 4. Ground No.1 raised by the assessee relates to rejection of benefit of section 11(1)(d) of the Act of Rs. 51,38,851/- received as earmarked funds, being corpus donation. 5. The facts necessary for disposal of the appeal are stated in brief. During the course of re-assessment proceedings, it was observed by the assessing officer that assessee had reported total additions of Rs. 51,38,851/- towards various earmarked funds and claimed the same exempt u/s 11(1)(d) of the Act, treating the same as corpus donations. Details of such funds and donations received are as under: Sr Name of the fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pus fund means a voluntary contribution made by any donor with a specific direction, that such donation as paid, shall form part of corpus and accordingly, the A.O. is of the view that in the absence of such specific direction from relevant donor-assigning it the status and purpose of corpus fund, the same would not qualify for such exemption u/s 11(1)(d) of the Act. Holding to such view, the A.O has denied the exemption on these earmarked fund donation receipts as not qualified as the same do not have any such specific directions in this regard while giving such donations. Therefore, assessing officer rejected the contention of the assessee and held that earmarked donations or specific expenditure donations are not corpus donations. Further, in the balance sheet, the trust, has reported Trust fund or corpus separately from these Earmarked Funds . Thus, the assessee itself has differentiated these funds and, therefore, has reported these Earmarked Funds as non-corpus fund. In view of the above, the said donations of Rs. 51,38,851/- was treated by the assessing officer as general donations and added to the total income of the assessee. 8. Aggrieved by the order of the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 149451074. The assessee is having 80G registration vide registration number SRT/CITI/ ITO/TECH/104/L-5/2008-09/244. The assessee-trust furnished the following information on the Earmarked funds received from various donors vide letter dated 15-2-2016 (Page 118 of Paper book). (i) On date-wise, donor-wise, amount-wise, details of donation received from various donors, (page No.119 of paper book) (ii) Receipts showing that donations received from various donors were only for specific purpose (from Page No.120 to 127 of paper book). 12. We note that such clear evidence on donations received from the donors for specific purpose, and we note that Trust Deed is only constitution. The nature and character of donation can be decided based on the intention of the donor and the direction given by the donor. To find which kind of donation would form part of the Earmarked funds into the Trust Deed is unprecedented. We note that the donors' intention can come through receipt or letter by the donor or sometimes by resolutions as the trusts speak only by resolutions. Therefore, the contention of the AO is unfounded because it is not necessary that kind of donation must be defined in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and campus developments. We note that stand taken by the Assessing Officer is not tenable in law, reason being that trust deed is only constitution of the trust and the nature and character of donation can be decided based on the intention of the donor and the direction given by the donor. We note that intention of the donor can be judged through receipt given by the donee or letter of the donor to the effect that he is donating the amount in the corpus fund. We note that it is a well-settled position in law when a trust received a particular sum, which is earmarked, for a specific purpose, it constitutes nothing but a receipt to be treated as forming part of the corpus. For this, reliance can placed on the decision of the Hon`ble High Court of Karnataka in the case of Shri Ramakrishan Seva Ashrama, [2012] 18 taxmann.com 37 (Karnataka), wherein it was held that Where donation received by assessee-trust is kept in deposit account and income earned therefrom is utilized for charitable purposes, assessee is entitled to benefit of exemption under section 11(1)(d) in respect of said income. Based on these facts and circumstances, we allow ground No.1 raised by the assessee. 15. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer Page No.60 and 74). These ledger accounts were produced before the AO as mentioned at para 17 of letter dated 21-1-2016 (page No. 9 and 10). On the other hand, ld DR for the revenue states that on this issue, assessee could not give any further evidence with due reconciliation to establish the excess cash deposited as attributable to accounted school fee receipts thereby matching the total cash fees collected with total cash fees deposited in the assessee s bank account during the year, therefore addition made by AO may be sustained. We note that the position taken by the AO is that since total cash deposits into the bank account exceeded the total fees received, the excess needs to be treated as income of the assessee. However, we note that reconciliation filed before the Bench clearly states that there should not be any difference. We note that it is second round of appeal before this Tribunal on the same issue, hence we note that third inning should not be given to the assessee for this small addition. Therefore, taking into account the reconciliation filed by the assessee before the Bench, we are of the view that addition to the tune of Rs. 95,146/- should be sustained, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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