TMI Blog2008 (7) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... section. It was made clear that the assessee is not holding property for charitable or religious purposes. It was incorporated solely for the benefit of the employees of Pentafour group of companies. As such the assessee was under no obligation to make registration u/s 12A. In view of this it is not correct to apply the prescription of section 11(1)(d). Section 11 can only be applied when property is held for charitable or religious purposes and the assessee avails the advantage of exemption contemplated for charitable trust. The definition of the word 'income' as given u/s 2(24) is inclusive. It is not exhaustive. Donations towards corpus are not falling within the ambit of the definition of income. This is a capital recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 147 of the Income-tax Act, 1961. 3. We have heard the rival submissions. Indisputably reopening was made beyond four years. The assesses is a company incorporated under section 25 of the Companies Act, 1956. it was formed primarily for providing medical aid and other facilities for the employees of Pentafour group of companies. The other facilities include education, sports and provision of medical aid for the retired employees. 4. The assessee derives income by investing corpus funds in shares and securities. The assessments were completed under section 143(3) of the Act. It was made clear that the assessee is not a charitable trust. No exemption was claimed under section 11 of the Act. As such there is no requirement for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the employees of Pentafour group of companies. As such the assessee was under no obligation to make registration under section 12A. In view of this it is not correct to apply the prescription of section 11(1)(d). Section 11 can only be applied when property is held for charitable or religious purposes and the assessee avails the advantage of exemption contemplated for charitable trust. In the present case the matter needs to be examined with reference to the scheme of the Act as regards the taxability of corpus donation. 6. As regards the nature of income there is no dispute. The assessee did receive donation towards corpus funds. Whether such receipts could be construed to be income? The term 'income' is a dark cat in the bag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 147 was not correctly assumed. Accordingly we decide this issue in favour of the assessee and against the Revenue. 10. C.O. No. 34(Mds)/2008:- In this cross objection the assessee objected the inclusion of ₹ 9,51,818/- received towards corpus fund. We for the reasons stated above decide this issue in favour of the assessee and against the Revenue. In view of this the other grounds raised in the cross objection have become infructuous. 11. ITA No. 1007(Mds)/2007: - In this departmental appeal the Revenue raised the ground that the Commissioner(Appeals) erred in holding that since the corpus fund of ₹ 9,51,818/- has been taxed as revenue receipt the proportionate expenditure has to be allowed as an incidental revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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