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2021 (7) TMI 906 - AT - Income TaxExemption u/s 11 - Corpus Donation as added with the income of the assessee - HELD THAT:- Donors/Trusts/entities have paid the amount by the mode of RTGS/cheque the details of which are given in the aforesaid documents/receipts. So, from this fact it is evident that the corpus donation were not given by the students by way of fees which has been segregated by the assessee in the form of building fund or capitation fee etc. Therefore, we note that the Ld. CIT(A) misdirected himself by wrongly assuming the facts which is contrary to the material placed on record and, therefore, his findings are perverse. For the purpose of this proviso, income of the funds or trust or institution shall not include income in the form of voluntary contributions made with specific direction that they shall form part of the corpus of that institution. Here in this case, as we have noted the donors have specifically given direction to use the fund towards corpus and since the explanation is for removal of doubts and it is being clarified it is retrospective in operation and, therefore, the corpus fund donated to the assessee cannot be included in the income and expenditure account but has been rightly shown by the assessee in its liability side of the Balance Sheet since the nature of the receipt is capital in nature. Therefore, the assessee succeeds and we allow the claim of the assessee and overturn the decision of the authorities below. Thus, this ground of appeal of the assessee is allowed. Provision for gratuity payable (determined by way of actuarial valuation) -Whether it would not constitute application of income – in terms of the provisions of sec. 10(23C)(vi)? - HELD THAT:- We agree that the gratuity to the employees is a statutory obligation, and therefore is obliged by law to disburse the same when the employees demit office or superannuate. In this case, the assessee has booked provision for gratuity as per the actuarial valuation and the manner and determination of the same is a scientific process adopted by expert professionally trained in the valuation and as such it cannot be compared with mere estimate of expenses to be incurred in future. We are of the opinion that the assessee’s claim in respect of provision for gratuity as per the actuarial valuation should have been allowed in the facts and circumstances of the case; and, consequently, the impugned order of the Ld. CIT(A) is set aside and the AO is directed to allow the provision for gratuity as application of income - Appeal of the assessee is allowed.
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