TMI Blog2014 (5) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... fund. The contribution received to that specific fund is accumulated as capital fund in the accounts of the assessee-society and interest income arising out of that fund is used by the society for giving awards. Therefore, it is to be seen that contribution made towards award fund is not a voluntary donation conceived under section 12, but, corpus donation explained in section 12(1) of the Income-tax Act, 1961. - The said award fund stands separate and even though technically not termed as corpus fund, it is in the nature of capital fund and by virtue of that nature, it always stands in pari passu with capital fund of the assessee-society. This is the same case with the amounts received towards IJA fund and WSJA fund. Those funds are spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961. 2. The assessee is a society registered under the Societies Registration Act. The assessee-society is also registered under section 12AA of the Income- tax Act, 1961. The registrations are still in force. In the previous year relevant to the assessment year under appeal, the assessee has received the following specific funds : Rs. (a) Amount received towards award fund 5,28,000 (b) Amount received towards IJA fund 13,32,000 (c) Amount received towards WSJA fund 2,45,184 (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 of the Income-tax Act, 1961, the term corpus fund has necessarily to be considered as the capital fund of a charitable society . The capital fund of the society cannot be a revenue fund in nature. That is why the law has specifically excluded corpus donations from the income of charitable societies. 9. When the issue raised in the present appeal is examined in the above line of discussion, it is to be seen that life membership fee is definitely a corpus donation. The capital fund of a charitable society is built-up mainly by the life membership fee. This is more true in respect of associations like assessee. The assessee is a society of practising anaesthesiologists. Therefore, among other items, the life membership fee contribute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the four items objected to by the Assessing Officer are essentially part of the capital fund and therefore, have to be considered as corpus of the assessee-society. These are all specific funds for fulfilling specific objectives. Further, all those funds always remain as capital funds and those funds are used only for the purpose of fulfilling the objectives for which those separate funds are constituted. 12. In the facts and circumstances, the lower authorities have grossly erred in treating the above stated four funds as voluntary contributions in the nature of income as provided under section 12 of the Income-tax Act, 1961. We set aside the findings of the lower authorities. We direct the Assessing Officer to treat the four funds as c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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