The Income Tax Appellate Tribunal, Mumbai consisting of Shri Sandeep Singh Karhail, Judicial Member and Shri Gagan Goyal, Accountant Member held that Corpus Donations received by an un-registered trust will be under the purview ofCapital Receipt hence are not taxable.
The appeal petition was filed by Versova Kokni Sunni Jamat Trust, a religious Trust registered with the Maharashtra State Wakf. The Assessee filed its return of incomedeclaring total income at Rs. 4,75,980 claiming exemption under section 11 of the Act.The Assessing Officerdetermined that the total incomewas against as declared by the Assessee hence disallowed the entire amount of voluntary contribution received by the Assessee out of which Rs. 8,99,811/- was received specifically towards corpus donation. The CIT(A) held that Assessee is not registered under section 12 A of the Act and thus no benefit of exemption could be allowed to the Assessee under section 11 of the Act.
The ITAT in appeal held that an amount of Rs 8,99,811 received as Corpus Donation for the trust will be under the purview of Capital Receipt hence are not taxable.The Assessee Trust is not registered as per Section 12A of the Income Tax Act hence cannot claim the exception under Section 11 of the Act.
Another issue was regarding whether the rent received from hire of buildings of Rs 4,87,924 be taxed under the head “Income from Other Sources” or “Income from House Property”. The ITAT set aside the order passed by CIT(A) that the rent received from hire of buildings of Rs 4,87,924 be taxed under the head “Income from Other Sources” rather than “Income from House Property”.The ITAT ordered to start de novo adjudication after necessary verification of the details in respect of the claim by the Trust and after giving reasonable opportunity of being heard to the Trust.
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