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2020 (11) TMI 173 - AT - Income TaxAssessment of trust - Contribution received towards co-operative education fund - income of the assessee - statutory requirement by misunderstanding the meaning of the words “objects” and “activities” - HELD THAT:- In this case, the assessee is acting as an independent trustee for that donation received from various societies as per the provisions of Section 57A r.w.s. 57(2A) of Karnataka Societies Act, 1959 and it cannot be considered for taxing the same. However, we observe that the assessee should have actually kept the said donation in separate account and any amount spent against that donation should have been debited to the separate account without bringing the same into ‘income and expenditure’ account - incoming and outgoing need not be reflected in the ‘income and expenditure’ account of the assessee and this donation to be taken out of the ‘income and expenditure’ account - relevant expenditure spent out of the donation go out from the expenses side in the ‘income and expenditure’ account. The expenses expended out of this donation will be deducted from the said donation by not charging the same into Income & Expenditure Account. Therefore we direct the Assessing Officer to redo the assessment accordingly. Being so, in our opinion, the said contribution is received by the assessee cannot be treated as income of the assessee. This ground of the appeal of the assessee is partly allowed. Denial of exemption u/s 10(23C)(iiiab) - Whether assessee satisfying the twin conditions i.e. existing solely for educational purposes and not for profit and substantially financed by the Government ?- HELD THAT:- Following the Tribunal order in assessee's own case for A.Ys. 2006-07 & 2005-06 we set aside the order of CIT (Appeals) on this issue and restore the order of Assessing Officer in this regard. This ground of appeal is dismissed. Disallowing deduction claimed u/s 80P(2)(d) - interest earned from savings bank account kept with the co-operative banks on the ground of investments are made in co-operative societies - HELD THAT:- To avail deduction Under Section 80P(2)(d)(i) of the Act, if the assessee carries on business of the banking or providing credit facilities to its members and it must have income of interest or dividend on investment with other co-operative societies may or may not engage in banking providing credit facilities to its members and the head under which the income is assessable is not material for the claim of deduction under the said Section. The society having surplus funds which are invested in savings bank account and the income is included total, the assessee is entitled for deduction Under Section 80P(2)(d) of the Act. Being so, we direct the Assessing Officer to grant the deduction Under Section 80P(2)(d) of the Act. Even the deposits in S.B Account is also an investment by the assessee and the assessee has deposited surplus funds in S.B. Account so as to meet its urgent needs and it cannot be said that the assessee is not entitled to deduction under Section 80P(2)(d) of the Act. Appeals of the assessee are partly allowed.
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