TMI Blog2014 (5) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is an admitted fact that the assessee received the donations in kind and the same could not be applied, accumulated or invested, therefore, it cannot be treated as income. Therefore, the CIT(A) was fully justified in reversing the observations of the Assessing Officer. We do not see any infirmity in the order of the CIT(A) on this issue. - I.T.A. No.538/Jodh/2013, C.O. No. 44/Jodh/2013 (In I.T.A. No. 538Jodh/2013) - - - Dated:- 9-5-2014 - SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N. K. SAINI, ACCOUNTANT MEMBER For the Appellant : Shri N.A. Joshi, D.R. For the Respondent : Shri Suresh Gang Shri Aaditya Sidarth Gang. ORDER PER N.K. SAINI, A.M. The appeal by the Department and the Cross Objection by the assessee are directed against the order dated 17/09/2013 of learned CIT(A)-Jodhpur. First we will deal with the departmental appeal in I.T.A. No. 538/Jodh/2013, following grounds has been raised in this appeal. [2] 1. The Ld. CIT(A) has erred in deleting the disallowance of depreciation of ₹ 23,33,987/- claimed on assets, cost of which has already been allowed as application of income. 2. The Ld. CIT(A) has erred in holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion had been decided by his predecessor vide order dated 15/3/2011, 26/3/2012 and 18/3/2013 for the assessment years 2008-09, 2006-07 and 2007-08 respectively and there was no reason to deviate from the findings of his predecessor. He, therefore, deleted the disallowance made by the Assessing Officer. Now the department is in appeal. 4. The Ld. D.R. supported the order of the Assessing Officer and the learned counsel for the assessee submitted that the then Ld. CIT(A) while deciding the issue for the assessment year 2006-07, relied the decision of the Hon'ble Punjab Haryana High Court in the case of CIT Vs. Market Committee reported in 330 ITR 16 (P H) wherein it was held that: Income of the assessee being exempt, the assessee was only claiming that depreciation should be reduced from the income for determining the percentage of the fund which had to be applied for the purpose of the Trust. There was no double deduction claimed by the assessee. It could not be held that double benefit was given in allowing the claim for depreciation for computing income for purposes of Section. 11. It was stated that a similar view was also taken by the various High Courts in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act, 1961. The interest received on the said investment as deposit with bank has been credited to relevant fund account, so the Assessing Officer was not justified to add cash donation and interest. I find that the above donations are for specific purpose which are corpus fund u/s 12(1) r.w.s. 11(1)(d) and not required to be included in the income of the trust. The various courts has also decided the issue that corpus fund is not part of the income which are specific purpose. 9.3.1 The Hon'ble Rajasthan High Court in the case of Sukhdeo Charity Estate Vs. Income Tax Officer reported in 192 ITR 615 held that Charitable trust-Income of trust- Donation received from another trust for \specified charitable purposes-Is voluntary contribution within the meaning of S. 12 and not income. 9.3.2. The Hon'ble Delhi High Court in the case of DIT (Exemption) Vs. Jaipur Golden Charitable Clinical Laboratory Trust reported in 311 ITR 365 held that Charitable trust- Exemption under S. 11-Voluntary contribution towards corpus of the trust-Assessee charitable trust registered under s. 12A running a hospital receiving donations from the consulting doctors as per their option exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns) Another Vs. Sri Ramakrishna Seva Ashrama (supra) wherein it has been held as under:- The word corpus used in the context of the Income-tax, Act, 1961, is to be understood, in the context of capital, as opposed to an expenditure. If a voluntary contribution is made with a specific direction, it shall be treated as the capital of the trust for carrying on its charitable or religious activities. Then such an income falls under section 11(1)(d) and is not liable to tax. Therefore, it is not necessary that a voluntary contribution should be made with a specific direction to treat it as corpus. If the intention of the donor is to give that money to a trust to keep in trust the account in deposit and utilise the income therefrom for carrying on a particular activity, it satisfies the definition part of the corpus. The assessee would be entitled to the benefit of exemptions from payment of tax. In view of the language employed in clause (d) of sub-section (1) of section 11, the requirement is that the voluntary contributions have to be made with a specific direction. The law does not require that the direction should be in writing. We, therefore, in view of the above discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above provision but in view of the provision also the appellant is also not required to be invested as per section 11(5). So it is clear that voluntary contribution received in kind as gold and jewellery do not form the part of the income of the trust. The ground is decided in favour of the appellant. The Ld. CIT(A), accordingly held that the voluntary contribution received in kind i.e. gold and jewellery did not form the part of the income of the assessee. Now the department is in appeal. 16. The Ld. D.R. supported the order of the Assessing Officer and the learned counsel for the assessee in his rival submissions, reiterated the submissions made before the Ld. CIT(A) and further submitted that the voluntary contribution received by the assessee was not a revokable transfer hence, it was in the nature of capital receipt, therefore, the Ld. CIT(A) was fully justified in reversing the observation of the Assessing Officer. 17. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the assessee received the donations in kind and the same could not be applied, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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