2021 (9) TMI 1486 - AT - Income Tax

Assessment of trust - Exemption u/s 11 - Surplus received - HELD THAT - Surplus received was deleted by the CIT(A) based on the earlier order for A.Y. 2010-11 and the stand of the assessee was accepted by the Revenue in that year. Thus, Ground No. 1 of the Revenue s appeal in the present Assessment Year is dismissed. Depreciation claim - As during the year under consideration, the assessee in its books of account claimed depreciation on the movable assets of the Trust, however this depreciation amount was added back in the return of income and was not claimed as application of income which is evident from the balance sheet and computation of income. Thus, Ground No. 2 of the Revenue s appeal is dismissed. Inter organization donation received - ITAT upheld the findings of the CIT(A) when such additions made was found to be untenable. The facts are similar in the present assessment year 2014-15, hence Ground No. 3 of the Revenue s appeal is dismissed. Corpus donations are not the income since it has been specifically received by way of corpus and this view is upheld by the Tribunal in A.Y. 2010-11. Thus, Ground No. 4 of the Revenue s appeal is dismissed. Revenue has not pointed out any distinguishing facts in the present Assessment Year to that of earlier Assessment Years. Therefore, all the grounds of the Revenue are dismissed.

Summary

Issues:
1. Deletion of additions against surplus received during the year.
2. Deletion of depreciation claimed by the appellant.
3. Deletion of disallowance against inter-organizational donations received.
4. Deletion of addition against corpus donations received.
5. Validity of the CIT(A)'s order and restoration of the AO's order.

Analysis:
1. The appellant, a trust registered under section 12A of the Income Tax Act, filed an appeal against the order passed by CIT(A)-Haldwani for the assessment year 2014-15. The Assessing Officer disallowed surplus received during the year, depreciation, inter-organizational donations, and corpus donations. The CIT(A) allowed the appeal of the assessee based on previous tribunal decisions favoring the appellant's eligibility for deduction under sections 11/12 of the Act. The Tribunal upheld the CIT(A)'s decision, citing consistency in previous rulings and lack of distinguishing facts in the present assessment year. Therefore, the first ground of the Revenue's appeal, regarding the deletion of surplus received, was dismissed.

2. Regarding the second ground of the Revenue's appeal, the CIT(A)'s decision to delete the depreciation claimed by the appellant was upheld by the Tribunal. The appellant had added back the depreciation amount in the return of income and did not claim it as an application of income, as evidenced by the balance sheet and computation of income. The Tribunal found no merit in the Revenue's argument, leading to the dismissal of this ground of appeal.

3. The third ground of the Revenue's appeal pertained to the disallowance against inter-organizational donations received. The Tribunal referenced a previous ruling for the assessment year 2010-11, where similar additions were found untenable. Consistency in facts led to the dismissal of this ground of appeal in the present assessment year.

4. Ground number four of the Revenue's appeal concerned the addition against corpus donations received. The Tribunal reiterated that corpus donations are not considered income since they are specifically received as corpus. This view was upheld based on a previous ruling for the assessment year 2010-11, resulting in the dismissal of this ground of appeal.

5. The Tribunal found no distinguishing facts in the present assessment year compared to earlier years, leading to the dismissal of all grounds of the Revenue's appeal. Consequently, the appeal of the Revenue was dismissed, and the order pronounced in open court on September 7th, 2021, stood as final.