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2023 (1) TMI 890 - AT - Income TaxExemption u/s 11 - Nature of donation - corpus fund or not - assessee was not registered u/s 12A during the relevant year - addition being the amount of donation received from Association Akshy Patriarca, San Jose, CA, US - As per assessee main aim and objectives of the trust is to help the weaker section of the society, children, women and old people who are in very bad economical conditions, mainly through education and other development projects - HELD THAT:- Firstly it has been mentioned that the said donor has agreed to extend financial support and sponsor the program and project of the assessee and to be utilized exclusively for the purpose of the trust activities. However, in the second part, it has been mentioned that 80,000 euros (equivalent to Rs. 57,25,000) were sent by way of donation for infrastructural development and other development work and in case of other necessity, the trustee in consultation with the Chairman can use the fund for the development of trust activities. Therefore, it has been provided that the trustees in consultation with the chairman can use the fund for trust activities. Hence, it cannot be said that it is a clear direction that the donation will form part of the corpus fund, rather, a liberty has been given to use it for trust activities in consultation with the chairman. Under such circumstances, even otherwise, the said donation, in our view, does not strictly conform as the donation towards corpus fund. Even, for the sake of arguments, if it is taken that the said fund was for infrastructural development or to say it was towards corpus fund of the trust, still as per the amended provisions of section 2(24)(iia) as amended vide Finance Act 1987 and further amended vide Amendment Act 1989, the trust being not registered u/s. 12A for the year under consideration, the corpus donation will form part of the taxable income of the assessee trust. In view of the above decision, Ground Nos. 1 to 7 of the assessee's appeal are hereby dismissed. Disallowance @ 20% out of expenditure incurred under the head 'food and beverages' - HELD THAT:-Assessee has pleaded that the Assessing Officer has not made any query with regard to the aforesaid expenses. However, no bills and vouchers have been furnished in respect of the aforesaid claim of expenditure. Since no bills and vouchers have been maintained for the aforesaid expenditure, we do not find any infirmity in the order of the CIT(A) on this issue also. Accordingly, Ground No. 8 is hereby dismissed.
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