TMI Blog1980 (6) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case, the donations from a trust to which section 11 applies in cash and in the shape of shares in a limited company given with a direction that they should form the corpus of the trust are to be treated for the purpose of section 11 as income of the assessee-trust ? " The assessees (respondents) are two public charitable trusts to which the provisions of s. 11 of the Act are admittedly applicable. The relevant assessment year is 1971-72 for which the accounting period is the financial year ending March 31, 1971. During the course of the accounting year, the trustees in each case had received as donation from a different trust 3,000 shares in a limited company and a cash donation of Rs. 5,000 subject to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstance of the department. Section 12 of the Act as it stood at the relevant time (prior to the amendment introduced by the Finance Act, 1972) was in the following terms : " 12(1) Any income of a trust for charitable or religious purposes or of a charitable or religious institution derived from voluntary contributions and applicable solely to charitable or religious purposes shall not be included in the total income of the trustees or the institution, as the case may be. (2) Notwithstanding anything contained in sub-section (1), where any such contributions as are referred to in sub-section (1) are made to a trust or charitable or religious institution by a trust or a charitable or religious institution to which the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to consider almost the identical point in similar circumstances. The same view has also been taken by the High Court of Gujarat in CIT v. Bal Utkarsh Society [1979] 119 ITR 137. We are in respectful agreement with the aforesaid decisions. The conclusion that emerges from the foregoing discussion is that the Tribunal was perfectly right in holding that the donations in question received by the assessees do not form income in the hands of the two assessee-trusts and do not, therefore, attract the applicability of the provisions of sub-s. (2) of s. 12. The question referred in these two cases is accordingly answered in the negative, that is, in favour of the assessees and against the department. The parties will bear their respective cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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