COMMISSIONER OF INCOME TAX V. KABIR KIRTI MANDIR

ITR/283/1993

AI Insights

The case revolves around the classification of a donation received by a Public Charitable Trust, Kabir Kirti Mandir, which was intended for the 'Kayami Fund', a corpus fund of the trust. The Income-tax Officer initially treated this donation as income for the purpose of taxation, as it was purportedly for construction of a building. However, the Deputy Commissioner of Income-tax (Appeals) and subsequently the Tribunal, ruled in favor of the trust, categorizing the donation as part of the corpus and not taxable as income. The revenue's appeal to the High Court sought to challenge this interpretation, but the court upheld the Tribunal's decision, aligning with previous judgments on similar matters.

• Counselvise Citation: [2002] 140 COUNSELVISE.COM (IT) 718249 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 18-07-2002
• Assessment Year: misc
• Other Referred Cases: Dharmapratisthanam vs. ITO, Swetember Murtipujak Tapogachha Jain Sangh vs. ITO, Commissioner of Income-tax, Rajkot vs. Shri Sthanakvasi Vardhman Vanik Jain Sangh, Jamjodhpur
• Result in Favour of: Respondent
• Court: HIGH COURT
• Assessee Lawyers: MANISH BHATT
• Keywords: Donation; Income; Income Tax; Public charitable trust; Kayami Fund

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 283 of 1993 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE K.A.PUJ ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus KABIR KIRTI MANDIR -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 283 of 1993 MR MANISH R BHATT for Petitioner No. 1 NOTICE SERVED for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE K.A.PUJ Date of decision: 18/07/2002 ORAL JUDGEMENT (Per : MR.JUSTICE K.A.PUJ) At the instance of the revenue, the following question of law is referred for the opinion of this Court:- \"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the donation of Rs.4 lakhs received by the assessee towards \"Kayami Fund\" did not constitute income of the assessee ?\" 2. The assessee is a Public Charitable Trust. The assessment year involved is 1986-87 for which accounting year was S.Y. 2041. During the relevant accounting year the assessee received Rs. 4 lakhs on 1.7.1985 as donation from Sadguru Shree Shanti Bhandrara Samiti, Jamnagar. In the receipt that was issued by the assessee, it was mentioned that the said amount had been received for being deposited by the assessee in \"Kayami Fund\". The said amount was credited by the assessee in \"Kayami Fund\" and was taken to balance sheet. The Income-tax Officer observed that the said amount had been received for construction of building and hence the said amount should be treated as income of the assessee-trust. The Income-tax Officer accordingly treated the said amount as income of the assessee-trust. 3. The assessee filed appeal before the Deputy Commissioner of Income-tax (Appeals) and submitted that \"Kayami Fund\" was the corpus of the trust. It was submitted that the word \"Kayami\" meant permanent and hence donation had been received towards corpus of the trust. It was pointed out that \"Kayami trust Fund\" was kept by the assessee in fact and was invested in Fixed Deposits with Central Bank of India. The Deputy Commissioner of Income-tax (Appeals) accepted the submissions of the assessee on the basis of decision of Delhi Bench of the Tribunal in the case of Dharmapratisthanam vs. ITO. He accordingly held that the donation of Rs.4 lakhs received by the assessee trust did not constitute income of the assessee. 4. The department come in appeal before the Tribunal. The Tribunal relied on the decision in the case of Swetember Murtipujak Tapogachha Jain Sangh and rejected the ground raised by the department. 5. On the above facts, at the instance of the revenue the above question is referred to us for our opinion. 6. Heard Mr Manish R Bhatt, the learned senior standing counsel appearing for the applicant-revenue. No one appears on behalf of the respondent-assessee though the notice is duly served. 7. The issue involved in the present reference is squarely covered by our decision in the case of Commissioner of Income-tax, Rajkot vs. Shri Sthanakvasi Vardhman Vanik Jain Sangh, Jamjodhpur being Income-tax Reference No. 73 of 1993 which was decided by us today. For the reasons stated therein and the view taken by us therein, we are of the view that the Tribunal was right in holding that the donation of Rs. 4 lakhs received by the assessee towards \"Kayami Fund\" did not constitute income of the assessee. We, therefore, answer the question referred to us in the affirmative i.e. in favour of the assessee and against the revenue. 8. The reference is disposed of accordingly with no order as to costs. (M.S. Shah, J.) (K.A. Puj, J.) sundar/- "