Dudhsagar Research and Development Association, Mehsana V. The DCIT(E), Circle-1, Ahmedabad

ITA 1671/AHD/2019

AI Insights

The case involves Dudhsagar Research and Development Association, which appealed against the order of the Commissioner of Income Tax (Appeals)-9, Ahmedabad. The dispute centered on whether a donation received by the assessee should be treated as a corpus donation, which would be exempt from income tax under section 11(1)(d) of the Income Tax Act, 1961, or as income, which would be taxable. The Tribunal noted that this issue had been previously decided against the assessee in the assessment year 2014-15. The assessee argued that if the donation is treated as income, it should be exempt under section 11(1)(a) as it was utilized for charitable purposes. The Tribunal dismissed the appeal, referencing the decision from the previous year and directing a recomputation of income considering the exemptions under section 11.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133515 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-03-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 10-11-2019
• Other Referred Cases: ITA No.1147/Ahd/2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution; Capital receipt
• Section: 11

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘B’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.1671/Ahd/2019 Assessment Year : 2015-16 Dudhsagar Research and Development Association C/o.Dudhsagar Dairy Highway Mehsana. PAN : AAATD 1312 J Vs. DCIT(E), Cir.1 Ahmedabad. (Applicant) (Responent) Assesseeby : Shri S.N. Soparkar, Sr.Advocate With Shri Parin S. Shah, AR Revenue by : Shri Sudhendu Das, CIT-DR स ु नवाई क तार ख/D a t e o f H e a r i n g : 2 8 / 0 3 / 2 0 2 3 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 1 7 / 0 4 / 2 0 2 3 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the assessee against order passed by the ld.Commissioner of Income Tax(Appeals)-9, Ahmedabad [hereinafter referred to as “Ld.CIT(A)”]dated 18.09.2019 passed under section 250(6)of the Income Tax Act, 1961 [hereinafter referred to as "the Act" for short]for the Asst.Year 2015-16. 2. At the outset, the ld.counsel for the assessee stated that solitary grievance of the assessee in the present appeal was denial of treating the specific donation received by the assessee as corpus donation so as to exclude it from the income of the assessee in terms ITA No.1671/Ahd/2019 2 of provisions of section 11(1)(d) of the Act. He drew our attention to the grounds raised by the assessee in this regard as under: i) Ld. CIT (A) erred in law and on facts in treating corpus donation received u/s 11(1)(d) of the Act of Rs.7,23,87,393/- as income of the appellant trust ignoring fact that donors has given said sum with specific direction and accordingly it would form part of corpus donation. Ld. CIT (A) ought to have considered the submission of the appellant and ought to have treated sum received as corpus donation not liable to tax being in nature of capital receipt. It be so held now. ii) Ld. CIT (A) ought to have given independent finding considering the facts and submission of the appellant and not to held against the appellant merely relying on decision of A.Y. 2014-15.” 3. The ld.counsel for the assessee fairly conceded that identical issue arose in the case of the assessee in the preceding year also i.e. Asst.Year 2014-15, wherein the issue was decided against the assessee by the ITAT in its order passed in ITA No.1147/Ahd/2018 v dated 11.10.2022.Copy of the order was placed before us. The ld.counsel for the assessee however stated that his only prayer was that the specific donation having been treated as income of the assessee, it is liable to exemption in terms of provisions of section 11(1)(a) of the Act, treating 15% of the total income as deemed to be utilized for charitable purpose, as also the amount actually utilized for charitable purposes, for being entitled to exemption under section 11 of the Act. He pleaded therefore that the income of the assessee be recalculated and re-computed in terms of the provisions of section 11 of the Act,including the specific donation earlier claimed as exempt by the assessee under section 11(1)(d) of the Act, now held to be treated as income of the assessee. 4. We have heard boththe parties. Since the issue in the present appeal, of donation received by the assessee amounting to 7,23,87,393/- being in the nature of corpus donation entitled to ITA No.1671/Ahd/2019 3 exemption under section 11(1)(d) of the Act, has been decided against the assessee by the ITAT in the preceding year i.e. Asst.Year 2014-15, the grounds raised by the assessee in this regard are covered by the decisionof the ITAT in the preceding year. The grounds raised by the assessee in the present appeals are therefore dismissed. 5. Further, we may add that as a consequence of the denial ofbenefit of exemption to the specific donation received by the assessee in terms of section 11(1)(d) of the Act, the same results in addition of the same to the income of the assessee earned from properties held for charitable purposes. Exemption of the same being governed by section 11 of the Act, the AO is directed to recompute the same in accordance with law. 6. In the result, appeal of the assessee is dismissed with the above directions. Order pronounced in the Court on 17 th April, 2023 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER