TMI Blog2000 (3) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... donations were received towards corpus of the Trust and therefore, the same could not be considered as income. The Assessing Officer did not accept the stand of the assessee by observing that majority of the donations were received against the allotment of shops to the existing tenants. According to the Assessing Officer, there was direct nexus between the donations received by the assessee and allotment of extended area to the existing tenants. Accordingly, such donations Could not be considered as voluntary contributions. Further, it was observed by him that no notice under section 11(2) had been given by the assessee. He found that a sum of Rs. 4,10,639 was spent during the year on the construction out of the sum of Rs. 9,33,202. Consequently, the balance amount of Rs. 5,22,563 was added to the income of the assessee. 3. The matter was carried before the CIT(A). In the course of appellate proceedings, the CIT(A) passed a remand order on 29th September, 1987 directing the Assessing Officer to record the sworn statements from each of the donors to whom shops had been allotted and to find out whether in fact there was any direct nexus between these donations and allotment of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e donations were given towards corpus of the Trust. Accordingly, it was held that sum of Rs. 5,25,563 could not be assessed as income of the assessee. Aggrieved by the same, the Revenue is in appeal before the Tribunal. 5. The learned Senior D.R. has vehemently assailed the order of CIT(A) by raising various submissions. Initially, it was contended by him that the amount received by the assessee from the shop-holders was not in the nature of donation, but it represented the premium in respect of the extended area of the shop. He drew our attention to various statements of the tenants in this regard. According to him, the sum of Rs. 32,500 had been received by the assessee from the tenants of the shops in most of the cases against the allotment of extended area. At this stage of hearing, a query was raised from the Bench as to what would be the nature of such receipts if the amount given by the tenants were not donations. If such amount was premium, could it be considered as capital receipt or income chargeable to tax. Faced with such query from the Bench, the learned Senior DR. gave up his arguments and proceeded on the basis that amounts received from the tenants of the shops we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as later on, when confirmations were issued by them. In this connection, he relied on the decision of Rajasthan High Court as Sukhdeo Charity Estate v. CIT [1984] 149 ITR 470, the decision of the Tribunal Madras Bench as N.A. Ramachandra Raja Charity Trust v. First ITO [1985] 14 ITD 230 and the decision of Pune Bench in I.T.A. No. 1669/PN/91. Regarding the legal contention raised by Senior D.R., it was contended by him that prior to 1-4-1989, the definition clause of income in Sec. 2 itself excluded the amount received towards the corpus of the Trust. Therefore, the claim of the assessee cannot be denied. 7. After considering the rival submissions of the parties and the material placed before us, we do not find much force in the contentions raised on behalf of the Revenue. The issue for consideration is whether the amounts received by assessee Trust were in the nature of voluntary donations. If yes, whether the same could be considered towards corpus of the Trust. Alternatively, if donations are not voluntarily made, then whether such donations could be considered as income chargeable to tax. 8. The amounts received by the assessee Trust are of three categories namely - (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the donations and allotment of extended area of shops. Therefore, such donations cannot be considered as voluntary donations. 10. But, that is not the end of the matter. Despite the above finding, we are of the view that the same cannot be considered as income of the assessee. Once it is held that such donations were not voluntarily made, the same fell outside the ambit of sections 11, 12 as well as 2(24)(iia). Consequently, the general provisions of Income-tax Act would become applicable. According to the general provisions, all receipts are not income. Donations are generally considered as capital receipts. In the present case, the donations were against valuable consideration i.e. allotment of tenancy right with reference to extended area of the shops. The Bombay High Court in the case of CIT v. Ratilal Tarachand Mehta [1977] 1 10 ITR 71 has held that premium paid by the tenant would be capital receipt not liable to tax. Accordingly, such donations, though not voluntarily made, are held as capital receipts and Consequently, cannot be considered as income of the Trust. 11. Even assuming for the sake of convenience that such donations were made voluntarily, as contended by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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