1994 (7) TMI 355

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..... 7; 42,922 as expenses as claimed by the assessee. 2. The assessee is a Public Charitable Trust. During the year under appeal the trust received donation amounting to ₹ 3,37,223 towards Bldg. Fund A/c . It also received donations aggregating to ₹ 8,62,677 towards Kayami Fund Account . Before the ITO the assessee-trust contended that these donations were received with a specific direction that these shall form corpus of the respective funds. It was further submitted that both the `Bldg. Fund A/c and Kayami Fund A/c constituted corpus of the trust. The ITO was not satisfied with the explanation furnished and treated the above two amounts of ₹ 3,37,223 and ₹ 8,62,677 being donations towards `Bldg. Fund A/c an .....

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..... d before the ITO and the CIT(A). As the Bldg. Fund A/c. was to be spent towards construction of building which formed part of the capital of the trust and, hence, it constituted the corpus of the trust. The receipts specifically indicated that the donations were being taken for the building fund. Hence, this amount is not at all income of the trust under s. 2(24)(iia) of the Act. In support of this contention he relied upon the decision of Bangalore Bench of Tribunal in the case of St. Ann's Home for the Aged vs. ITO 91982) 13 TTJ (Bang) 185. The learned counsel for the assessee further submitted that the trust received donations of ₹ 8,62,677 towards Kayami Fund A/c. which was a permanent fund and constituted the corpus of th .....

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..... pted by the donee-trust as such, are not voluntary contributions which constituted the income within the meaning of s. 12 of the Act, because the subject-matter of the donation becomes part of the corpus or capital of the donee trust and cannot constitute income of the receiving trust. Such contributions will not, therefore, fall within the purview of s. 12 of the Act. We are supported in this proposition by the judgment of Allahabad High Court in the case of Sri Dwarkadheesh Charitable Trust vs. ITO (1975) 98 ITR 557(All) and the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Bal Utkarsh Society (1979) 10 CTR (Guj) 54: (1979) 119 ITR 137(Guj) and the decision of the Tribunal Delhi Bench `A in the case of Dharam Pratisht .....

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