ITO(EXCEMPTION) TRICHY, Trichy V. Grama Vidiyal Trust, Trichy

ITA 1534/CHNY/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3791 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deduction for capital gain; Capital asset; Charitable institution; Opportunity of being heard; Capital receipt; Set aside; Capital Gains
• Section: 148; 11; 143(3); 11A; 12AA; 11(1A)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI BEFORE SHRI VEERAVALLI DURGA RAO, JM AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA Nos.1534 & 1535/CHNY/2019 Assessment Years: 2009-10 & 2011-12 Income-tax Officer, (Exemptions), Trichy Vs. Grama Vidiyal Trust, No. 44, Williams Road, Cantonment, Trichy-620001 (PAN: AAATG2928F) (Appellant) (Respondent) Present for: Appellant by : Shri N. V. Balaji, Advocate Respondent by : Shri ARV. Sreenivasan, Addl. CIT Date of Hearing : 31.05.2022 Date of Pronouncement : 24.08.2022 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: Both these appeals by revenue are directed against the separate orders of ld. CIT(A)-1, Trichy vide ITA No. 156/2017-18/CIT(A)-1/TRY dated 04.03.2019 and 163/2017-18/CIT(A)-1/TRY dated 22.02.2019 against the separate orders of Ld. ITO, Exemptions Ward, Trichy, passed u/s 143(3) r.w.s. 254 of the Income-tax Act,1961 (hereinafter referred to as the Act), both dated 30.12.2017 for AYs 2009-10 and 2011-12. 2. First we take up ITA No. 1534/Chny/2019 for AY 2009-10 for which the revised ground taken by the revenue is as under: “The Ld. CIT(A) erred in allowing the exemption u/s. 11(1A) of the Income-tax Act, 1961, without realizing the fact that the exemption u/s. 11 of the Income- tax Act, 1961, was denied to the assessee and the same was confirmed by the Hon’ble ITAT vide order in ITA Nos. 345/Mds/2013, 1437/Mds/2014 & 392/Mds/2015 and CO No. 78/Mds/2013 dated 30.06.2016 and the provisions of section 11(1A) of the Income-tax Act, 1961, are not applicable in those cases where exemption u/s. 11 of the Income-tax Act, 1961, was denied.” 3 Brief facts as culled out from the record are that Grama Vidiyal Trust (in short “GVT”) was created as a public charitable trust on 01.04.1997 which was granted 12AA registration by the CIT, Trichy vide ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 2 registration No. C. No. 6261E(221) TRY 98-99 dated 22.03.1999 effective from AY 1998-99. Assessee filed its return of income on 29.09.2010 reporting total income at NIL after claiming exemption u/s. 11 of the Act. Case of the assessee was selected for scrutiny assessment which was completed u/s. 143(3) of the Act on 16.12.2011 determining the total income at Rs.9,39,92,730/-. Aggrieved by the addition made, assessee went in appeal before the Ld. CIT(A) which was allowed in favour of the assessee. Subsequently, department went into appeal before the Tribunal. Coordinate Bench of Tribunal vide its order dated 30.06.2016 in ITA No.345/Mds/2013 had set aside the matter to the file of AO with the direction to decide same afresh after giving opportunity of being heard to the assessee. In the set aside proceeding, Ld. AO called for explanation in respect of Rs.8,24,15,000/-. After considering the submissions made by the assessee, ld. AO made the addition in respect of this amount which pertains to capital gains claimed as exempt u/s. 11(1A) of the Act by holding that since exemption u/s. 11 is denied capital gains u/s. 11(1A) is also denied. Aggrieved, the assessee went into appeal before the Ld. CIT(A) who allowed the appeal of the assessee on this ground. Aggrieved, the department is in appeal before this Tribunal. 4. Before us Mr. N. V. Balaji, Advocate represented the assessee and Mr. ARV. Sreenivasan, Addl. CIT represented the department. 5. Ld. Dr. DR vehemently argued that Ld. CIT(A) has grossly erred in allowing the claim of exemption in respect of capital gains claimed by the assessee u/s. 11(1A) of the Act more particularly when this Co-ordinate Bench in its earlier order dated 30.06.2016, wherein the impugned matter was set aside to the file of Ld. AO, has categorically held that case of assessee is hit by the proviso to section 2(15) of the Act and the assessee is not entitled for the benefit of section 11. He further pointed out to the finding given by the Co-ordinate Bench that there is no dispute on the fact that assessee is carrying on the business of micro finance which ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 3 cannot be said to be incidental to carry on the main objective of the assessee Trust. Ld. Sr. DR submitted that this Co-ordinate bench has held that Ld. CIT(A) was not justified in granting exemption u/s. 11 of the Act to the assessee and thus, it reversed the order of the Ld. CIT(A) and restored the order of the AO. Relevant extracts from the order of Co- ordinate bench referred by the ld. Sr. DR are reproduced as under: “8.7. The assessee is lending money at commercial rate prevailing in the market. By advancing loans at that rate of interest, it cannot be considered as an activity carried on the assessee as charitable and for the benefit of the public. When the assessee carried on micro finance activity in a commercial line, then it is not a charitable activity but an activity to expand the finance business by contracting weaker section of the public and it does not involve any charitable activity. Therefore, looking into the activities carried on by the assessee, we fully agree with the findings of the AO and this view of ours is squarely covered by the decision of the Tribunal in the case of Janalakshmi Social Services (33 SOT 197) (Bang.). The assessee relied on various judgments, which cannot be applied to the facts of the present case, as the assessee is carrying on micro finance business in a commercial manner so as to earn profit and there is no iota of charity carried on by the assessee so as to grant exemption under sec. 11 of the Act. 9. Further, the same view was taken by the Tribunal in the case of Kalanjiam Development Financial Services for assessment year 2009-10 in ITA No.625/Mds/2015 vide order dated 07.08.2015. 10. Hence, in our opinion, the CIT(A) not justified in granting exemption u/s. 11 of the Act to the assessee. Accordingly, we reverse the order of the Ld. CIT(A) and restore the order of the AO.” 6. Ld. Sr. DR further pointed out from para 12 of the order of Co- ordinate bench in respect of the deletion of Rs.8.24 Cr. which was credited to the Capital Account of the assessee wherein on the plea taken by the assessee before the AO that the impugned amount was received on transfer of capital asset from GVS Micro Finance Ltd., the Ld. CIT(A) observed that there is no transfer of any asset and as such there is no levy of Capital Gains tax on the impugned amount. The Co-ordinate Bench held that this finding of Ld. CIT(A) is not based on any positive material and, therefore, the issue was remitted back to the file of AO for fresh consideration after giving opportunity of hearing to the assessee. Relevant extracts from the order of Co-ordinate Bench referred by Ld. Sr. DR are reproduced as under: ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 4 “12. The Revenue raised one more ground is with regard to deletion of 8.24 Crores, which was credited to the capital account of the assessee Trust by the CIT(A), though it was treated as revenue receipt by the AO. 12.1 The facts of the issue are that the assessee had shown Rs.8,24,15,000/- under the head “capital fund” in the balance sheet. The assessee given explanation to the AO that this amount represents ‘transformation consideration’ on transfer of capital assets from M/s. Grama Vidiyal Trust to M/s. Grama Vidiyal Micro Finance ltd., and it is being a capital receipt exempted from tax. The AO is of the opinion that the assessee has transferred capital asset in terms of sec.2(14) of the Act. It is related to transfer of good will and thus, the entire amount of Rs.8,24,15,000/- is treated as income of assessee under the head "capital gain". The C!T(A) has given a relief to the assessee by observing that there is no material to suggest that the assessee had transferred any asset so as to levy capital gain and he deleted the addition. Aggrieved by the order of C!T(A), Revenue is in appeal before us. 12.2 We have heard both the parties and perused the material on record. The assessee took a plea before the AO that this impugned amount has been received on transfer of capital asset from M/s. Grama Vidiyal Trust to M/s.Grama Vidiyal Micro Finance Ltd. Contrary to this observation of the AO, the CIT(A) observed that there is no transfer of any asset, as such there is no levy of capital gain tax at Rs.8,24,15,000/-. This findings of the CIT(A) is not based on any positive material. Hence, the facts brought on record not enough to give any findings on this issue. Therefore, the entire issue is remitted to the file of AO for fresh consideration after giving opportunity of hearing to the assessee.” 7. Ld. Sr. DR further referred to the provisions of section 11(1A) of the Act and submitted that the claim of exemption in respect of capital gains u/s. 11(1A) has to satisfy the conditions of section 11(1) of the Act. According to Ld. Sr. DR, section 11(1) of the Act is the governing section which provides for exclusion of income from the total income for any charitable or religious trust. To buttress his contention, he placed reliance on the decision of Co-ordinate Bench of ITAT, Amritsar in the case of Akhara Ghamanda Dass Vs. ACIT (2001) 114 Taxman 27 (Amritsar) (MAG) dated 26.02.1999 wherein it was observed that sub-section (1A) is only for the purpose of sub-section (1) and sub-clause (i) gives details of the income which are not to be included as income in the previous year from properties held with charitable and religious purpose. Co-ordinate Bench observed that if the assessee has to make a claim that income arising capital gains is to be exempted u/s. 11(1), then he has to fulfill various conditions mentioned in section (1A). Thus, Ld. Sr. DR strongly ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 5 submitted that Ld. AO has rightly denied the capital gain exemption u/s. 11(1) of the Act since exemption u/s. 11(1) itself is denied to the assessee by Co-ordinate bench in the decision dated 30.06.2016 for which the assessee did not file any appeal. 8. Per contra, Ld. Counsel for the assessee reiterated the submissions made before the lower authorities. Relevant extracts of the submission made by the assessee before the Ld. CIT(A) in this respect are reproduced as under: “Regarding the Transformation Consideration from GVMFL to GV Trust. The M/s. Grama Vidiyal Trust and M/s. Grama Vidiyal Micro Finance Private Ltd. has entered into a business transfer agreement for the F. Y. 2008-09 (A Y 2009-10) dated 1st January, 2008 to transfer all the lending activities in to the New company from 1st January, 2008 onwards. Based on this Transfer agreement the Transformation Consideration given by Grama Vidiyal Micro finance Ltd. (GVMFL) to Grama Vidiyal Trust (GVT) for the A. Y. 2009-10 for the tune of Rs.8,24,15,000/-. The said transaction has taken place because of the termination of Micro finance Activities in the Grama Vidiyal Trust since January 2008. The GVMFL has made the payment by way of cheque amounting to Rs.8,24,15,000/- in three installments for which bank details have been submitted. GVMFL has treated the same as Goodwill in its books of accounts and GVT has received the transformation consideration as capital gains. The copies are annexed for your reference. The company has taken this amount as a intangible asset ( Sch. No. 6B in the Balance Sheet) The Grama Vidiyal Trust has invested the entire amount of Rs.8,24,15,000/- in Fixed Deposit with Bank of India for period of 6 months and availed exemption for your reference. Based on the Tax experts’ advice, the trust have made this fixed deposit of the availing of the exemption from the Income-tax. The investment made by Grama Vidiyal Trust in Fixed Deposit will qualify for exemption as it has been upheld by many courts of law. The provisions of Sec. 11(1A) will not directly bind the provisions of Sec. 11 of the I. T. Act. As per the opinion of the tax experts it is stated that sec. 11(1A) is a specific section for the exemption of Capital Gains and hence it has to be allowed if the conditions are fulfilled. ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 6 We would like to inform you that Grama Vidiyal Trust has not been doing any Microfinance Activities from the FY 2008-09 (AY 2009-10) onwards and request you to kindly allow our appeal relating to the transformation consideration received by the trust as we have fulfilled the conditions of Sec. 11(1A).” 9. We have heard the rival contentions and perused the materials available on record. Before we advert on the issue in hand, we would like to reproduce section 11(1A) of the Act, relevant extracts of which are as under: “(1A) For the purposes of sub-section (1),— (a) where a capital asset, being property held under trust wholly for charitable or religious purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely:— (i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of such capital gain; (ii) where only a part of the net consideration is utilised for acquiring the new capital asset, so much of such capital gain as is equal to the amount, if any, by which the amount so utilised exceeds the cost of the transferred asset; (b) where a capital asset, being property held under trust in part only for such purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the appropriate fraction of the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely:— (i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of the appropriate fraction of such capital gain; (ii) in any other case, so much of the appropriate fraction of the capital gain as is equal to the amount, if any, by which the appropriate fraction of the amount utilised for acquiring the new asset exceeds the appropriate fraction of the cost of the transferred asset.” 10. We also refer to the provisions of section 11(1), relevant portion of which is reproduced as under: “Income from property held for charitable or religious purposes. 11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income— (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property;” ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 7 11. From the perusal of the provisions reproduced above, we note that according to section 11(1) certain income shall not be included in total income of the previous year of the person in receipt of the income. We also note that the provisions of section 11(1A) contemplates computation of capital gain under the normal provisions of the Act for determining the quantum of capital gain which will be deemed application of income for charitable purpose and become eligible to get exemption u/s. 11(1) of the Act. We further note that the purpose of section 11(1)(a) of the Act is to exclude the income of charitable and religious institution from the total income of the trust, the income to be excluded relates to the income derived from the property held under the Trust to the extent of such income is applied for the purpose of the trust in India. We note that the very purpose of section 11(1A) of the Act is mentioned in section itself according to which once the capital gains are worked out by it exemption u/s. 11(1) of the Act is allowed by fulfilling the conditions mentioned in section 11(1A) of the Act. We note that the Co-ordinate bench has at the threshold held that Ld. CIT(A) is not justified in granting exemption u/s. 11(1) of the Act since the business of micro finance activities does not constitute charitable activities. 11.1. From the set aside direction given by the Co-ordinate Bench in its order in para 12 (supra), we note that crux of the issue is relating to the treatment of receipt of Rs.8,24,15,000/- as revenue or capital receipt. Ld. AO opined that assessee had transferred capital asset in terms of section 2(14) and the amount received is towards goodwill, hence chargeable to tax as ‘capital gain’. However, Ld. CIT(A) gave relief by holding that assessee has not transferred any asset exigible to capital gains. Since this finding of the Ld. CIT(A) was not based on any positive material, the matter was remitted back to the file of AO for fresh consideration. ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 8 11.2. From the order of Ld. CIT(A) in the set aside proceedings, we note the observations and findings given by him after considering the submissions of the assessee which are reproduced as under: “6.2 Only issue is that ITAT is held that micro finance business was not a charitable activity. It is also true that in the current year assessee has not conducted micro finance activities as micro finance business was hived off and given to a private limited company formed by assessee for this specific purpose. Now question is can denial of section 11 be continued when the activity due to which section 11 was denied in no longer part of assessee’s activities. 6.3. Assessee had borrowed funds from various banks and had extended micro credit to various women (self-help groups) at 12% rate of interest. In the balance sheet this was shown as loans given (debit) amounts borrowed (credit). When the micro finance business was given to the private limited company M/s. GVMFPL (Grama Vidiyal Micro Finance private Limited) which has been registered with RBI as NBFC. 6.4. In place of loans given initially the amount was shown as receivable from GVFMPL debit and loans taken credit. 6.5 As the amounts were received from GVMFPL the loans were paid back to the banks entry being cash debit, to receivable from GVFMPL credit. 6.6. As explained in detailed the main contention of CA is that a) There was no micro finance business in A. Y. 2009-10 as the same has been divested in January (A.Y.2008-09) hence if the department was to tax income from micro finance business or even to deny section 11 applicability to the assessee. The same could have been done only for A Y. 2008-09. By proceedings u/s 148 of I.T Act, 1961. b) As assessment year 2008-09 has not been reopened, the impact of ITAT's comments to that micro finance was not a charitable activity cannot be carried forward for AY. 2009-10 where no micro finance business was in fact present with the assessee. c) That has the so called the inapplicable part of GVT's activity had already been separated, and hence no addition could be made in his hands on the plea that section 11 benefit was not available. d) AR then drew attention to circular no. 883 dated 24/09/1975 and case of DIT(E) vs. D.L.F. Qutab Enclave Complex Medical Charitable Trust (2001) 167 CTR (Delhi) 120, as per which low capital gains would arise in case the amounts were kept in fixed deposits and then used for purposed of purpose of acquisition for other capital assets. e) AR conceded that earlier CIT(A) order had inadvertently held that there was no capital asset, where as in the balance sheet the loans receivable (asset side) had in fact been transferred but the AR again pleaded that taxation of capital gains can arise as per provisions of the act, which have given in section 11(1A) which have to be read along with the circular in this issue and AR then referred to the cases of Sri Aurobindo Memorial Funds Society, India ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 9 Cements Educational Society, Sri Magunta raghava Reddy charitable trust to plead that taxation of trust has to be done purely as per the law and that section 11A was fully applicable to the trust as micro finance activity was no longer part of the trust, and hence benefit of above mentioned cases had to be given to the assessee.” 11.3. Accordingly, limiting our finding on the issue referred in the set aside direction of the Co-ordinate Bench and considering the submissions made by the assessee and observations of Ld. CIT(A) (supra) thereon, we uphold the finding of Ld. CIT(A) without any interference. Accordingly, the ground of appeal of the department is dismissed. 12. Now we take up the appeal in ITA No. 1535/Chny/2019 for AY 2011-12 for which also the revenue filed a revised ground of appeal and the same is reproduced as under: “The Ld. CIT(A) erred in allowing the donation of Rs.3,70,00,000/- as exempt, holding the same as corpus donation without realizing the fact that in a case where exemption u/s. 11 of the Income-tax Act, 1961, is denied, the voluntary donation is taxable under the Income-tax Act,1961.” 13. The issue involved in this appeal relates to receipt of donation of Rs.3,70,00,000/- which the Ld. CIT(A) has deleted by holding it as ‘Corpus Donation’. The impugned order of AY 2011-12 was also the subject matter of appeal before the Co-ordinate Bench in ITA No. 392/MDS/2015 order dated 30.06.2016. The Co-ordinate Bench had directed the assessee to give details of receipt of Rs.3,70,00,000/- to prove that it is not a revenue receipt and if it is capital receipt it will not be liable for exemption u/s. 11 of the Act and thus remitted the matter back to the file of Ld. AO to examine afresh. Relevant extracts from the said order are reproduced hereunder: “14. The other ground raised in appeal of Revenue in ITA No.392/Mds./2014 (A.Y. 2011-12) is that the CIT(A) erred in law in allowing the assessee's claim of Rs.3.70 crores as "corpus Donation" without appreciating that there is no specific direction from the members about what portion of the subscription amount would be taken as "Corpus Donation". 15. After hearing both the parties, we are of the opinion that if the voluntary contributions received by the Trust created, partly or wholly, for charitable purpose, then in term of sec.2(24)(iia) of the Act it forms the part of the corpus fund of the ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 10 Trust and it is a capital receipt. In the present case, .since we have observed that assessee is not a charitable trust, it is engaged in the commercial activity and is not entitled for exemption u/s.11 of the Act. The assessee is required to give details of receipt of Rs.3.70 crores and it is to be proved by assessee that it is not a revenue receipt and if it is in the field of capital receipt would not be liable for the exemption u/s. 11 of the Act. Accordingly, this issue is remitted to the file of AO to examine afresh and assessee shall furnish necessary details. The ground of Revenue is partly allowed for statistical purposes.” 14. Ld. Sr. DR referred to the findings and the directions given by the Co-ordinate Bench (supra) and relied on the findings given by the Ld. AO. 15. Per contra, Ld. Counsel for the assessee reiterated the submissions made before the authorities below for which Ld. AO observed in the impugned order that corpus donation of Rs.3,70,00,000/- is found to be genuine. Ld. AO also noted based on the enquiries made by the Inspectors of ITO (exemption) Ward-3, Trichy who confirmed that members of the assessee trust have given declaration to consider the amount of Rs.3,70,00,000/- as corpus and to use the funds for objects of the Trust. The relevant extract is reproduced for ease of reference. “Corpus donation: During the A.Y. 2011-12, the assessee had received a corpus donation of Rs. 3,70,00,000/- as seen from the receipts payment statement. It is seen that the trust has collected Rs.3,70,00,000/- from the members. On being pointed out, the explanation on behalf of the assessee trust dated 26/12/2017 is as under: "We would like to furnish particulars regarding the Corpus Fund Donation received from members by Grama Vidiyal trust (GVT) for the AY:2011-12. The corpus Fund donation has been received from members in the form of Rs.40/- per member out of the total collection of Rs.100/- per member per year. The Grama Vidiyal Trust has received Rs.24/- towards subscription from each member and Rs.36/- towards insurance premium. The above receipt has been documented by issue of printed receipt by Grama Vidiyal trust. Each member has given undertaking letter for the corpus donation of Rs.40/- to the trust. The trust has received Rs.3,70,00,000/- from 9,25,000 members during the Assessment Year 2011-12. The said amount of Corpus Fund has been utilized towards the fulfillment of objects of the Trust. The trust has scrupulously followed all the provisions with regard to the receipt of Corpus Donations and has utilized the same towards its objects" ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 11 The inspector of Income Tax (Exemption ward, Trichy) made enquiries on corpus donation and has submitted his report. As per the ITI report, the beneficiaries have signed and given donation receipts and bifurcations for corpus donation amount to Rs.40/- , insurance premium amounting to Rs.36/-, and subscription for Rs.24/-. The ITI has made enquiries with more than 500 beneficiaries. So the ITI report confirms that the members have given declaration to consider the amount of Rs. 3,70,00,000/- as corpus and to use the funds for objects of the trust. Corpus donation of Rs.3,70,00,000/- is found to be genuine. As per ITAT order, Sec 11 is not available to the assessee, the assessee is ineligible to claim exemption of Rs.3,70,00,000/- from tax by considering it as corpus donation. Therefore, Rs.3,70,00,000/- is added to the Returned income of the assessee. 16. Ld. Counsel submitted that once the receipt of donation from the members of the assessee trust of Rs.3.70 Cr. has been accepted by the Ld. AO as corpus donation which tantamount to being capital receipt and thus falls out of the purview of section 11 application which the Co- ordinate Bench had observed while giving this direction to the Ld. AO in the remand proceeding. He submitted that Ld. CIT(A) had rightly deleted the addition made by the Ld. AO. 17. We have heard the rival contentions and gone through the facts and circumstances of the case. We note that during the year, assessee has received corpus donation of Rs. 3.70 Cr. which was built up by receipt of Rs. 40/- given by 9,25,000 members for which eligible donations slips and vouchers were produced as recorded by the Ld. CIT(A) in its order, relevant extracts of which is reproduced as under: “OATH by the MEMBER and AGREEMENT as FINANCE is the Investment 1. I am a Member of Grama Vidiyal. I am paying Rs. 100/- as Membership charges. In Rs. 100/-, an amount of Rs.40/- is invested towards Capital (Corpus Fund). Rs.24/- is paid towards subscription and Rs.36/- is taken as premium amount. I accept for the above payments. I know this amount is been utilized for the above scheme and this amount is non- refundable. 2. I completely and clearly learned the policy of GRAMA VIDIYAL and knew about the terms & conditions (policy) and will accordingly follow the same. I assure with self-consciousness and sett-interest.” 18. Considering the direction given by the Co-ordinate Bench of its earlier order dated 30.06.2016 while remitting the matter back to the file of AO, we note that Ld. AO has verified the donation receipts and vouchers ITA Nos.1534&1535/Chny/2019 Grama Vidiyal Trust, A.Ys: 2009-10 & 2011-12 12 and has arrived at a conclusion to hold the receipt of Rs.3.70 Cr. as genuine corpus donation. Accordingly, we are inclined to hold that irrespective of exemption available u/s. 11 of the Act, corpus donation being held to be capital receipt cannot be subjected to tax as observed by Ld. AO. We, therefore, direct the Ld. AO to delete the addition so made. Thus, the ground of appeal by the revenue is dismissed. 19. In the result, both ITA No. 1534/Chny/2019 and ITA No. 1535/Chny/2019 are dismissed. Order is pronounced in the open court on 24 th August, 2022. Sd/- Sd/- (VEERAVALLI DURGA RAO) (GIRISH AGRAWAL) Judicial Member Accountant Member Dated 24 th August, 2022 Jd.(Sr.PS) Copy to: 1. The Appellant: 2. The Respondent:. 3. CIT(A)-1, Trichy 4. CIT , 5. The DR, ITAT, Chennai Bench, Chennai