The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has exempted gold donation of religious trust towards corpus funds under Section 11(1)(d) of the Income Tax Act 1961.
The assessee, Swaminarayan Bhagwan Kalakendra was a public trust and registered under Bombay Public Trust Act, 1950. The object of the trust is religious activities. The Assessing Officer observed that the trust had received interest, dividend, donation and capital gain during the year under consideration.
The assessee had also claimed exemption under Section 11(1)(d) of the Income Tax Act and exemption under Section 11(1)(a) of the Income Tax Act. The Assessing Officer further observed that the Trust had claimed exemption being corpus donation earmarked funds.
On verification of corpus donation receipt, it was observed by the Assessing Officer that the assessee had shown in gold fund. However, the Assessing Officer observed that in all the receipts of the gold fund no specific direction had been mentioned.
He held that the assessee had received donation in the form of Gold but there was no specific purpose of donation was mentioned and therefore, the said donation cannot be said as corpus donation. The Assessing Officer disallowed claim on exemption under Section 11(1)(d) of the Income Tax Act of corpus donation.
Urvashi Shodhan, on behalf of the assessee submitted that the trust was maintaining a separate ledger for gold corpus fund in its books and the said books on account were regularly audited by Chartered Accountant.
He further submitted that gold was received for a specific purpose from the donor and the donor was also aware that the said gold donation was corpus donation and it was for art in the gallery and ceiling of the gallery room.
Mangla, on behalf of the revenue contented that the assessee had never submitted the confirmation from the donor and the said confirmations had not mentioned in details such as debts or the purpose of the donation in Gold. A Single Bench of Suchitra Kamble, (Judicial Member) allowed the appeal filed by the assessee holding that the ledger account of corpus fund Gold and the Annual Accounts and Audit Report was harping that the donation in Gold and actually for corpus donation. The Gold corpus fund was already accepted in the previous and the subsequent year by the Revenue and only in this year the same had been disputed.
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