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2018 (8) TMI 1245 - AT - Income TaxNature of receipt - additions towards receipt of Corpus Fund - additions on account of Corpus contribution received by the appellant being a Trust - revenue receipt or capital receipt - Exemption u/s 11 - Trust was not registered u/s. 12A - Held that:- The amount was received by the assessee towards corpus fund with a specific purpose of allocating such funds for different welfare activities. The assessee had at no stage sought exclusion of the amounts received by it towards corpus fund from the scope of its total income by invoking the provisions contemplated under Sec. 11(1)(d) of the Act. Rather, the contention of the assessee before the lower authorities as well as before us was that the registration of a trust under Sec. 12A would not change the character of the receipt in its hands. On a perusal of the trust deed, it emerges that as the main object of the assessee trust was not for the benefit of the general public, but was solely dedicated for the welfare of the retired employees of the bank, thus, the same could not be held as a charitable trust as contemplated under Sec.2(15) of the Act. As the amount of ₹ 2,30,00,000/- received by the assessee trust from Bank of India towards corpus fund is in the nature of a ‘capital receipt’, therefore, the same could not have been brought to tax as the income of the assessee under Sec. 2(24)(iia) of the Act. - Decided in favor of assessee. Claim of expenditure against interest income u/s 57 - Held that:- in case of interest income earned by an assessee, only the expenditure (not being in the nature of a capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income is to be allowed as a deduction under Sec. 57(iii) of the Act. - as the expenditure of 3,09,78,345.30, viz. (i) D-mat charges of ₹ 386/- ; (ii) Legal expenses of ₹ 11,236/-; and (iii) Medical Relief Expenses ₹ 3,09,66,723/- incurred by the assessee cannot be construed as having been laid out or expended wholly and exclusively for the purpose of making or earning of the interest income on the aforesaid FDR’s and bank account of the assessee, therefore, the same cannot be allowed as a deduction as against the interest income of the assessee. - Decided against the assessee.
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