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TMI Blog2019 (11) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... ther and disposed off by way of this consolidated order for convenience and avoid repetition of facts. 2. The sole ground raised by the assessee in ITA No. 5991/Del/2016 for assessment year 2010-11 is reproduced as under: "That on fActs and in the circumstances of the case and in law the Ld.CIT(A) erred in confirming the Action of the Assessing Officer in not granting exemption as claimed u/s. 11 of the Income-tax Act, 1961 on account of building fund receipts of Rs. 23,62,500/- received on capital account. The Action being most arbitrary, erroneous, unlawful and unjust be quashed with directions for relief." 3. Briefly stated, facts of the case are that the Assessing Officer made addition consequent to cancellation of the registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, in absence of any such evidences, order of the Learned CIT(A) is justified in treating the amount received on account of building fund of Rs. 23,62,500/-as income received from property under section 11(1)(a) and 11(1)(b) of the Act, which is required to be utilised as minimum prescribed percentage for charitable purposes. 6. We have heard the rival submission and perused the relevant material on record. The assessee contended that development fund is charged from the students for development of the infrastructure of the society/college/institution for construction of the building and purchase of capital asset. The assessee submitted that this fund is part of the corpus fund of the society and has been shown as part of the capital fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y held under trust and provisions of section 11 and section 13 shall apply accordingly. The appellant in this case has also claimed that it is entitled to exemption of these funds as per section 11 of the I.T. Act. The appellant has stated that 85% of the funds so collected are being accumulated for application towards purposes of education for which the institution has been established. 4.6 However, for the voluntary contribution (as claimed by the appellant) received by the appellant on account of development fund and credited to the balance sheet, to be eligible for exemption u/s 11 of the I.T. Act, the institution has to comply with certain procedural requirements laid down in section 11 in this regard. As the appellant has taken the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income on the basis of grant of registration u/s 12AA of the I.T. Act. The appellant's surplus of income over expenditure was held not chargeable to tax in view of its registration u/s 12AA being restored by ITAT. The claim of exemption regarding development fund credited to balance sheet and not to Income Expenditure Account is to be allowed in the context of section 11, 12 and 13 of the I.T. Act. The appellant has not furnished any evidence before AO or in these proceedings that it had informed the AO regarding accumulation of funds or else investments of accumulated funds in specified securities. 4.8 In the light of above fActs and circumstances, the amount of Rs. 23,62,500/- collected as development fund and credited to the bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t- (i) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and (ii) for charitable or religious purposes, created before the 1st day of April, 1952, to the extent to which such income is applied to such purposes outside India: Provided that the Board, by general or special order, has directed in either case that it shall not be included in the total income of the person in receipt of such income; (d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution. 8. It is evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced by the assessee decide the issue in accordance with law. The ground of the appeal of the assessee is accordingly allowed for statistical purposes. 9. In ITA No. 5922/del/2016 for assessment year 2011-12, identical issue of building fund received of Rs. 35,26,200/- has been raised. The issue, being identical to the issue raised in ITA No. 5921//Del/2016 for assessment year 2010-11, following our finding above, the issue in dispute in the year under consideration is also restored to the file of the Assessing Officer for deciding the same afresh as directed in ITA No. 5921/del/2060 . The grounds of appeal are accordingly allowed for statistical purposes. 10. In the result, both the appeals of the assessee are allowed for statistica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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