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2021 (9) TMI 1072 - AT - Income TaxExemption u/s 11 & 12 - AO has taken the view that the “Gross receipts excluding corpus donation” shall constitute the income of trust or institution - HELD THAT:- The concept of “income” has to be understood in terms of sec.2(24) and other provisions of the Act. Hence, the view expressed by the AO that the “Gross receipts excluding corpus donation” shall constitute the income of trust or institution is contrary to the provisions of Income tax Act. The “total income” has to be computed in the hands of a charitable trust in accordance with the provisions of sec.11 to 13 of the Act and the same also satisfies the definition of “total income” given u/s 2(45) of the Act. Assessed maturity proceeds of Fixed deposit as income of the assessee - A capital receipt cannot be subjected to tax except under the authority of law. In any case, what was received by the assessee on maturity of fixed deposit is the maturity proceeds of the amount deposited by it earlier. The interest earned on the said fixed deposit shall constitute income in the hands of the assessee. Accordingly, maturity proceeds of fixed deposit cannot constitute income in the hands of assessee under any count. Hence the Ld CIT(A) was not justified in confirming assessment of the maturity proceeds of fixed deposit as income of the assessee. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition relating to maturity proceeds of fixed deposit. Certain fixed assets as application of income - AO allowed an aggregate amount of investment in fixed assets as application of income - We do not find any infirmity in the decision rendered by Ld CIT(A) on this issue. The assessee has claimed the expenditure of ₹ 7,29,227/- referred above in the Income and Expenditure account. Hence it cannot again be allowed as application of income. With regard to remaining three items, the assessee has not furnished any detail before us also and further the assessee has not proved that they are in the nature of capital expenditure resulting in acquisition of any asset. Accordingly we confirm the order passed by Ld CIT(A) on this issue. Rejection of Form no.10 filed by the assessee for accumulation of income u/s 11(2) - During the original assessment proceedings, it may be the case that the assessee has not filed Form no.10 before the AO. However, it cannot be said that the same situation/position prevailed during second round of proceedings also. We noticed that the assessee has applied for condonation of delay before Ld CIT and the same was rejected by Ld CIT. The said fact has been noticed by the AO in the original assessment order also. Hence the copy of petition filed by the assessee along with Form no.10 is very much available with the AO during second round. The year under consideration in this appeal is AY 2005-06, i.e, prior to AY 2016-17. Accordingly, we are of the view that the Form No.10 already filed by the assessee should have been considered by the AO for the detailed reasons discussed above. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to consider Form No.10 filed by the assessee and examine the claim made u/s 11(2) in accordance with law.
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