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TMI Blog2024 (7) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... idered for application of income under the provisions of section 11(5) of the Act. Since, the assessee has already invested the dividend received in the form of fixed deposits and saving account in the HDFC Bank and therefore, same qualifies for the purpose of section 11(5) of the Act. In the instant case rather than fixed deposits shares have been donated as corpus donation and therefore, the dividend income earned thereon under the direction of the donor to treat is same as part of corpus donation has been correctly held by the Ld. CIT(A) as part of the corpus donation. CIT(A) has validly followed the decision of the Hon ble Kerala High Court Mata Amrithanandamayi Math (supra) which has been uphold by the Hon ble Supreme Court. [ 2018 (5) TMI 1028 - SC ORDER ] Appeal of the Revenue is dismissed. - Shri Om Prakash Kant (Accountant Member) And Shri Raj Kumar Chauhan (Judicial Member) For the Assessee : Dr. K. Shivaram, Sr. Adv., Mr. Rahul K. Hakani For the Revenue : Mr. S. Srinivanu, CIT-DR ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 02.11.2023 passed by the Ld. Commissioner of Income-tax (Appeals) National Faceless Appeal Centre, Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The facts qua the issue in dispute are that the assessee received 5,00,000 equity shares of Majesco Ltd. as corpus donation. The donor vide its letter dated 17.12.2020 (PB-74) directed the assessee that said shares, any receipt thereof in the form of dividend/sale proceeds and receipts on securities /deposits made out of dividend/sale proceeds was to be treated as corpus donation. The copy of the said donation letter was enclosed by the assessee in support of its claim. Thus, according to the assessee the dividend received and interest received on deposit made out such dividend was to be treated as corpus donation, which was claimed exempt u/s 11(1)(d) of the Act while filing the return of income. However, according to the Assessing Officer, once the asset is donated and transferred, generation of future income from asset will be governed as per the provisions of the Act only, and not under any conditions set by the donor. According to the Assessing Officer, the entire interpretation of section 11(1)(d) of the Act was done wrongly by the assessee and claimed the dividend as exempt under the corpus fund and therefore, he assessed income from dividend under the head income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that the corpus donation had not been derived through any mode as laid down u/s 11(5)(i) to 11(5)(xii) of the Act neither through any 'other' mode as per the provisions of section 11(5)(xii) of the Act read with Rule 17C of the Income-tax Rules, 1962. In this regard, the appellant submitted that the appellant had received net dividend of Rs. 45,04,75,000/- (Rs. 48,70,00,000/- net of TDS) in the bank account on 30.12.2020. The appellant had invested Rs. 40,00,00,000/- in fixed deposits with HDFC Ltd. in two tranches, i.e., Rs. 20,00,00,000/- on 01.03.2021 and Rs. 20,00,00,000/- on 08.03.2021) after analysing the efficient modes of investment. The balance proceeds of the dividends were invested in savings account maintained with HDFC Bank Ltd. In this regard, the appellant furnished copy of receipts confirming the fixed deposits and copy of bank statements in support of its claim. Thus, the balance dividend with scheduled bank, i.e., HDFC Bank Ltd as well as the fixed deposits with HDFC Ltd qualified as specified investment under the provisions of section 11(5)(iii) and 11(5)(ix) of the Act respectively. In this context, the provisions of section 11(5)(ii) and 11(5)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or institution, otherwise than in any of the forms or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the previous year in which such asset is acquired or the 31st day of March, 1993, whichever is later; 5.1 The Ld. CIT(A) further clarified that the provisions of section 11(5) of the Act prescribe only mode of investment for trust instead of mode of acceptance of donation. In the case in hand, the assessee has received equity shares as corpus donation and the assessee has time limit till 31.03.2022 to comply with the provisions of section 11(5) of the Act r.w.s. 13(1)(d) of the Act. Accordingly, assessee disinvested the equity shares in Majesco Ltd. on 23.06.2021 and duly invested as per section 11(5) of the Act, thus, the assessee complied with provisions of section 13(1)(d) of the Act with respect of acceptance, holding and disposal of the aforesaid shares received. The Ld. CIT(A) rejected the other contention of the Assessing Officer observing as under: In view of the foregoing discussion, it is observed that the provisions of section 11(1) of the Act permits registered charitable entity to accept donations in any form subject to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received as excess income from business undertaking deemed to be applied to purposes other than charitable or religious purposes and the AO had also not raised any questions pertaining to section 11(4) of the Act during the course of assessment proceedings. It is pertinent that in order to invoke provisions of section 11(4) of the Act, the onus is shifted on the part of AO to provide conclusive evidence that (i) the trust or the institution has business undertaking and ii) that the excess income from such business undertaking has not been utilized / applied for the purposes of the object of the trust. The appellant further submitted that the appellant had not carried out any business activity as defined u/s 2(13) of the Act. Further, the appellant is a charitable entity holding the shares received as corpus in compliance with the provisions of section 11(1)(d) read with section 13(1)(d) of the Act and the same cannot be treated as business undertaking. 5.2 Before us, the Revenue has raised the issue that investment in shares was not a specified mode u/s 11(5) of the Act. We find that the Ld. CIT(A) has duly clarified the issue that the shares of Majesco Ltd. was received by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank). Explanation. In this clause, scheduled bank means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959*), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934); (iv) investment in units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963); (v) investment in any security for money created and issued by the Central Government or a State Government; (vi) investment in debentures issued by, or on behalf of, any company or corporation both the principal whereof and the interest whereon are fully and unconditionally guaranteed by the Central Government or by a State Government; (vii)inve ..... 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