TMI Blog2019 (3) TMI 1572X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance of it by the AO. We hold that CIT(A) has perfectly deleted the said addition, therefore this ground of appeal is dismissed. Disallowance of amount set apart for specified purposes and disallowance of expenditure - assessee had set apart or accumulated the amount u/s.11(2) - assessee had filed Form No.10 along with resolution for accumulation of income along with Return of Income filed u/s.139(1) - HELD THAT:- Amount eceived by the assessee Trust towards corpus fund created for the specific purposes, hence, such donation receipts towards corpus fund are to be treated as capital receipts of the Trust and on such donations the provisions of section 11(2) granting exemption to the amount accumulated would not apply. All such funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Commissioner of Income-Tax (Appeals) has erred in law and on facts in deleting the addition of ₹ 7,64,805/- being disallowance of accumulation of income @ 15% of gross total income of ₹ 50,98,703/- . ii) The Ld. Commissioner of Income-tax (Appeals)has erred in law and on facts in deleting the disallowance of amount set apart for specified purpose of ₹ 81,16,651/-. iii) The Ld. Commissioner of Income-Tax (Appeals) has erred in law and on facts in ignoring the stand of the Revenue that allowance of depreciation on the assets, the cost of which has already been allowed as a deduction on account of application of income, would amount to double deduction in view of the decision of the Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent year, therefore, no question arises of accumulation of 15% of the total income earned by the assessee during the year, hence, the deduction claimed of ₹ 7,64,805/- was added to the total income of the assessee. 5. The assessee carried the matter before the CIT(A) wherein same facts were reiterated. The CIT(A) observed that the assessee disclosed income from other sources at ₹ 52,92,614/- as against application of income shown at ₹ 99,07,454/-. Thus, there is excess of expenditure over income ₹ 46,14,840/-. However, the AO has not given any opinion of his revised computation of income though it was in her knowledge during assessment proceedings. Since there remains no income for the purpose of accumulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the disallowance of amount set apart for specified purposes of ₹ 81,16,651/- and disallowance of expenditure of ₹ 27,32,915/- which are co-related, hence being considered together. 10. Brief facts are that the AO observed that the assessee had set apart or accumulated the amount of ₹ 81,16,651/- u/s.11(2) of the Act but this was not shown to the AO by furnishing Form No.10. The AO, therefore disallowed this amount the same. The AO further observed that the assessee has made expenses of ₹ 27,32,915/- from the year marked funds (corpus fund) which is not allowable. The reply of the assessee that said expenditure towards construction of party plot, and no expenditure for construction etc., has been incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the provision of section 11(1)(d) of the Act that voluntary contributions made towards corpus of the Trust are not to be included in the income of the Trust. Thus, if a donor while making the donations make it clear that the donation so made shall form part of the corpus of the Trust, it would be capital receipts and shall be chargeable to tax. Consequently, the provisions related to accumulation of income and setting apart of that would not apply in such cases. In view of these facts, the CIT(A) concluded that the judgment relied by the AO in the assessment order become irrelevant to the case of the appellant. With regard to expenditure of ₹ 2,73,295/-, the CIT(A) observed that the assessee has demonstrated by filing the ledger acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards various purposes. Therefore, the CIT(A) has rightly deleted such addition made by AO, accordingly ground no.ii) iii) of the appeal is therefore dismissed. With regard to expenditure of ₹ 27,32,915/- we find that these expenditures were incurred out of its income accumulated from year to year and not from earmarked corpus fund the assessee has duly demonstrated by showing the details of the balance sheet of the current year as well as earlier years that no amount has been spend out of the corpus fund received in various years. In view of this matter we do not any infirmity in the order of CIT(A), accordingly same is upheld, therefore ground no.iv) of appeal of the Revenue is accordingly dismissed. 15. In the result, appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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