Case Law Details

Case Name : Das Bahuuddeshy Vishwast Sanstha Vs Exemption Ward (ITAT Pune)
Appeal Number : ITA No. 33/PUN/2020
Date of Judgement/Order : 04/05/2022
Related Assessment Year : 2016-17

Das Bahuuddeshy Vishwast Sanstha Vs Exemption Ward (ITAT Pune)

It is seen as an admitted position that the assessee received a sum of Rs.15.00 lakh from one of its trustees, which amount was spent on building construction of the school. The case of the assessee is that the amount was a corpus donation and hence, not chargeable to tax, which has been jettisoned by the authorities by treating it as a chargeable receipt. Admittedly, the amount was not taken to Income and Expenditure Account but was taken straightaway to the balance sheet. During the course of assessment proceedings it was categorically stated that it was received from one of the trustees with a specific direction. In view of the fact that the said sum of Rs.15.00 lakh was received by the assessee from one of the trustees towards building fund and was taken to the balance sheet only, amply shows that it was received as a corpus donation and hence not chargeable to tax.

FULL TEXT OF THE ORDER OF ITAT PUNE

This appeal by the assessee is directed against the order passed by the CIT (Appeals) -2, Kolhapur on 23-10-2019 in relation to the assessment year 2016-17.

2. The only issue raised in this appeal is against the confirmation of addition of Rs.15.00 lakh made by the Assessing Officer (AO).

3. Briefly stated, the facts of the case are that the assessee is a trust registered under Bombay Public Trust Act, 1950 and running one school named as MLA Suresh Bhau Khade English Medium School. Return was filed declaring total income at Nil. During the course of assessment proceedings, the AO observed from the Balance sheet of the assessee that a sum of Rs.15.00 lakh was added to Building Fund. On being called upon to explain the source of the above, the assessee submitted that the amount was directly transferred to the assessee’s bank account from the account of Datta Dagdu Khade, one of the trustees of the assessee-trust. The amount was stated to be taken directly to the balance sheet because it was a donation with a specific direction for Building. Not convinced, the AO made addition of Rs.15.00 lakh. In the first appeal, the ld. CIT(A) affirmed the addition, against which the assessee has come up in appeal before the Tribunal.

4. Having heard both the sides and gone through the relevant material on record, it is seen as an admitted position that the assessee received a sum of Rs.15.00 lakh from one of its trustees, which amount was spent on building construction of the school. The case of the assessee is that the amount was a corpus donation and hence, not chargeable to tax, which has been jettisoned by the authorities by treating it as a chargeable receipt. Admittedly, the amount was not taken to Income and Expenditure Account but was taken straightaway to the balance sheet. During the course of assessment proceedings it was categorically stated that it was received from one of the trustees with a specific direction. In view of the fact that the said sum of Rs.15.00 lakh was received by the assessee from one of the trustees towards building fund and was taken to the balance sheet only, amply shows that it was received as a corpus donation and hence not chargeable to tax. I, therefore, overturn the impugned order and delete the addition.

5. In the result, the appeal is allowed.

Order pronounced in the Open Court on 04th May, 2022.

Download Judgment/Order

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