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Income-tax Officer, Ward-1 (3) , Mysore Versus Peetadhipathi Trust

2012 (1) TMI 302 - ITAT BANGALORE

Contributions/donations received by the assessee - income of the assessee u/s 2(24)(iva) - Held that:- Only ‘a benefit or perquisite’ in kind can be treated as income. Donations in the form of cash cannot be treated as a ‘benefit or perquisite’. Therefore as rightly pointed out by the learned counsel for the assessee, the donations received by the assessee do not become income chargeable to tax. The issue of representative assessee will come only when the income is chargeable to tax. Therefore, .....

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ted:- 31-1-2012 - SHRI N.K SAINI, ACCOUNTANT MEMBER AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER. Revenue by : Smt. Susan Thomas Jose Assessee by : Shri Ashok A Kulkarni ORDER PER P MADHAVI DEVI, JUDICIAL MEMBER : These appeals are filed by the Revenue and the Crossobjections are filed by the assessee. These appeals are directed against the order of the Commissioner of Income-tax (Appeals) at Mysore dated 15.09.2010. The appeals arise out of the assessment completed u/s 143(3) of the Income-tax Act, .....

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hipathi of the trust being sole beneficiary of the trust, any gifts received from preaching and propagating religious faith constitutes professional income. 3. The brief facts of the case are that the assessee is a trust. The trust has been created vide trust deed dated 19.12.2002 and the only beneficiary of the trust is Peetadhipathi of Sri Ganapati Sachchidananda Avadhoota Datta Peetha at Mysore. The object of the trust is to provide for the maintenance, travel in India and abroad, medical aid .....

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return was shown as AOP. The return of income filed for the assessment year 2003-04 was not rejected by the Revenue authorities and, therefore, the assessee presumed that the same has been accepted. For the asst. year 2004- 05, the assessee filed its return of income disclosing the total taxable income of ₹ 46,296/- and advance tax on the same was also paid. In the return of income, the status was indicated as AOP. During the assessment proceedings u/s 143(3) of the Income-tax Act, the AO .....

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axable income and disallowed the expenses of ₹ 77,444/- claimed towards traveling charges and repair charges of ₹ 92,431/- on the ground that they were personal expenditure. 4. Aggrieved, the assessee preferred an appeal before the CIT(A) stating that the amounts in question are donations from the donors for the benefit of the trust and, therefore, are not taxable. He also questioned the disallowance of expenses for traveling and repairs. 5. The CIT(A) after considering the assessee .....

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addition and allowed assessee s appeal. 6. Aggrieved, the Revenue is in appeal before us. 7. The learned DR while supporting the order of the AO, submitted that the definition of income given at sub sec. 24(iva) of sec.2 includes the value of any benefit or perquisite whether convertible into money or not, obtained by any representative assessee mentioned in clause (iii) or clause (iv) of sub sec. (1) of sec. 160 or by any person on whose behalf or for whose benefit any income is receivable by t .....

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on behalf or for the benefit of any person, such trustee or trustees. 8. She submitted that the assessee trust has been founded solely for the purpose of taking care of the Peetadhipathi and, therefore, it is not for any charitable or religious purposes but for the individual benefit of the Peetadhipathi and as per the definition u/s 160 of the Income-tax Act, the trust which receives the contributions or donations is a representative assessee and as per sec. 2(24) (iva) of the Income-tax Act t .....

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their Pan No. were all provided to the AO. He also drew our attention to the copy of the trust deed filed in the paper book demonstrating that it is a trust registered on the 19th of Dec, 2002 and at page 31 of the paper book are the details of donations received during 2004-05 to demonstrate that all the donations received were in cash or by cheques. He also drew our attention to Annexure C at pages 32 to 35 of the paper book which is a letter of ITO to the CIT(A) giving a remand report on the .....

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TR statute 97. 11. Having heard both the parties and having considered the rival contentions, we find that the basic issue before us is as to whether the contributions/donations received by the assessee are to be treated as income of the assessee u/s 2(24(iva) of the Income-tax Act. Sub sec. (24) of sec. 2 gives the meaning of income . For the purpose of clarity, the relevant part of provision is reproduced hereunder : Section 2(24) - income includes - (i) profits and gains (ii) dividend ; - (iv .....

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en payable by the beneficiary; 12. On going through the above provisions, it can be seen that only benefit or perquisite received in kind by any representative assessee or any payment made by the Representative Assessee in respect of any obligation which, but for such payment, would have been payable by the beneficiary is to be treated as income chargeable to tax. 13. In the case before us, it is the contributions received in cash and not any payment made on behalf of the beneficiary. We find th .....

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ew has been approved by the Hon ble Supreme Court in the case of CIT Vs. Mafatlal Gangabhai reported in 219 ITR 644. 14. Thus, it can be seen that only a benefit or perquisite in kind can be treated as income. Donations in the form of cash cannot be treated as a benefit or perquisite . Therefore as rightly pointed out by the learned counsel for the assessee, the donations received by the assessee do not become income chargeable to tax. The issue of representative assessee will come only when the .....

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