Case Law Details
CIT (Exemption) Vs Om Prakash Jindal Gramin Jan Kalyan Sansthan (Delhi High Court)
1. Present appeal has been filed challenging the order dated 03rd September, 2019 passed by the Income Tax Appellate Tribunal (hereinafter referred to as ‘ITAT’) in ITA No. 6012/Del./2015 for the Assessment Year 2010-11.
2. Learned counsel for the Appellant states that the ITAT has erred in upholding the order of CIT(A) allowing the utilization of corpus fund of Rs.19 crore towards revenue expenditure as application of income under Section 11(1)(d) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). He states that after transfer of corpus fund of Rs.19 crore to general reserve, the Respondent/Assessee has purchased land worth Rs. 5,27,45,958/- only and has given a donation of Rs. 13.4 crore to another Trust.
3. He further states that the impugned decision implies that a Trust can transfer funds from corpus to general reserve and still claim that the department adjudicate the real nature of the expenditure incurred from general reserve account and grant exemption. According to him, Section 11(1)(d) does not permit exemption in cases where donation received is transferred from corpus to general reserve even if the nature of expense incurred from general reserve is charitable in nature.
4. A perusal of the paper book reveals that both CIT(A) and ITAT have set aside the assessment order on the ground that Rs.19 crore cannot be added as additional income of the Trust since exemption on corpus donation is allowed on purchase of land, as it is a purchase of capital asset. This Court also finds that there is no ground of appeal either before the ITAT or before this Court challenging the concurrent finding of the CIT(A) and the ITAT that the substance of the transaction was that the corpus fund had been utilised for a purchase of a capital asset.
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