The ACIT(Exemption), Trivandrum v. M/s. Matha Amrithanandamayi Math, Kollam

ITA 188/COCH/2016 | 2012-2013
Pronouncement Date: 27-09-2016 | Result: Dismissed

Appeal Details

RSA Number 18821914 RSA 2016
Assessee PAN HSEPT2016D
Bench Cochin
Appeal Number ITA 188/COCH/2016
Duration Of Justice 5 month(s) 13 day(s)
Appellant The ACIT(Exemption), Trivandrum
Respondent M/s. Matha Amrithanandamayi Math, Kollam
Appeal Type Income Tax Appeal
Pronouncement Date 27-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 27-09-2016
Date Of Final Hearing 08-09-2016
Next Hearing Date 08-09-2016
Assessment Year 2012-2013
Appeal Filed On 13-04-2016
Judgment Text
ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI B P JAIN AM & GEORGE GEORGE K JM ITA NO 185 TO188 /COCH/201 6 (A SST YEA RS 2007 - 08 TO 2009 - 10 & 2012 - 13 ) ASST. COMMISSIONER OF INCOME TAX (EXEMPTION) ROOM NO.407 4 TH FLOOR AAYKAR BHAVAN KAWDIAR TRIVANDRUM 695 003 VS M/S. MATA AMRITHANANDAMAYI MATH AMRITHAPURI KARUNAGAPALLY KOLLAM 690 525 ( APPELLANT) (RESPONDENT) PAN NO. AATM2403M APPELLANT BY SHRI SHANTOM BOSE REVENUE BY SHRI R.KRISHNAN DATE OF HEARING 8TH SEPT 2 016 DATE OF PRONOUNCEMENT 27 - 9 - 16 ORDER PER GEORGE GEORGE K JM: THESE ARE APPEALS AT THE INSTANCE OF THE DEPARTMENT DIRECTED AGAINST A CONSOLIDATED ORDER OF CIT(A) TRIVANDRUM DATED 02/02/2016. THE RELEVANT ASSESSMENT YEARS ARE 2007 - 08 T O 2009 - 10 AND 2012 - 13. A C OMMON ISSUE IS RAISED IN THESE APPEALS HENCE THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. IDENTICAL GROUNDS ARE RAISED FOR ALL THE ASSESSMENT YEARS AND THEY READ AS UNDER: - ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 2 1. THE ORDER OF THE I D. CIT(A) THIRUVANANTHAPURAM IN ITA NO. 11 TO 14/EXEMPT / KLM/CIT(A) TVM/2015 - 16 DATED 02.02.2016 IS OPPOSED TO LAW FACTS AND EVIDENCES OF THE CASE IN THE FOLLOWING GROUNDS. 2. THE ID. CIT(A) THIRUVANANTHAPURAM ERRED IN DELETING THE ADDITION MADE ON ACCOU NT OF TREATING THE INTEREST EARNED ON CORPUS FUND AS THE INCOME OF THE ASSESSEE FOR THE FOLLOWING REASONS : - (A) IN THE CASE UNDER CONSIDERATION THE ASSESSEE HAS TREATED THE CONTRIBUTIONS RECEIVED AS CORPUS DONATIONS ELIGIBLE FOR EXEMPTION U/S.11(1 ) (D) O F THE I.T. ACT 1961. NOT CONTENDED AND RESTRICTING THE CLAIM OF EXEMPTION TO THE EXTENT OF CONTRIBUTIONS RECEIVED DURING THE YEAR THE ASSESSEE HAS TREATED THE INTEREST EARNED OUT OF DEPOSITS MADE FROM SUCH CONTRIBUTIONS ALSO AS EXEMPTED U/S.11(1 ) (D) OF TH E I.T. ACT. IN SUCH SITUATION NEITHER THE INTENTION OF THE DONOR NOR THE OBJECTS OF THE TRUST WILL BE FULFILLED SINCE BOTH THE CAPITAL AND THE INTEREST WILL NOT BE APPLIED FOR THE OBJECTS OF THE TRUST IN THE INTEREST OF THE BENEFICIARIES AND CONTINUE TO R EMAIN UNUTILIZED PERPETUALLY. (B) NORMALLY A CORPUS FUND DENOTES A PERMANENT FUND KEPT FOR THE BASIC EXPENDITURES NEEDED FOR THE ADMINISTRATION AND SURVIVAL OF THE ORGANIZATION . THE CORPUS FUND IS GENERALLY NOT ALLOWED TO BE UTILIZED FOR THE ATTAINMENT OF THE PURPOSES BU T THE INTEREST ACCRUED ON SUCH FUND HAS TO BE UTILIZED OR ACCUMULATED. THERE IS NO PROVISION UNDER THE INCOME TAX ACT WHICH EXEMPTS EVEN INTEREST INCOME OUT OF THE DEPOSITS MADE OUT OF CORPUS DONATIONS U/S.11(1 ) (D) OF T HE I.T.ACT (C) A DO NATION WILL BE TREATED AS CORPUS DONATION ONLY IF IT IS ACCOMPANIED BY A SPECIFIC WRITTEN DIRECTION OF THE DONOR. IN THE ABSENCE OF ANY WRITTEN DIRECTION OF THE DONOR A CONTRIBUTION' OR GRANT CANNOT BE TRANSFERRED TO CORPUS FUND. THE INTENTION OF THE DONO R IS RESTRICTED TO THE AMOUNT OF THE CORPUS DONATION MADE. 3. THE DECISION OF THE ID. CIT(A) IS NOT ACCEPTABLE AS THE AO HAS RIGHTLY MADE ADDITION ON ACCOUNT OF TREATING THE INTEREST EARNED ON CORPUS FUND AS THE INCOME OF THE ASSESSEE. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED ON THE ISSUE OF DELETING THE ADDITION ON ACCOUNT OF TREATING THE INTEREST EARNED ON CORPUS FUND AS THE INCOME OF THE ASSESSEE. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS. FOR THE ASSESSMENT YEAR 2007 - 08 TO 2009 - 10 AND 2012 - 13 ASSESSMENT ORDERS WERE COMPLETED ACCEPTING THE CLAIM OF THE ASSESSEE THAT ITS INCOME IS EXEMPT UNDER SECTION 11 OF THE INCOM E TAX ACT 1961 (IN SHORT THE ACT ). HOWEVER THE CLAIM OF EXEMPTION ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 3 UNDER SECTION 10(23C)(V) WAS REJECTED. WHILE COMPLETING THE ASSESSMENT FOR THE FOUR ASSESSMENT YEARS THE ADDITIONS WERE MADE BRINGING TO TAX THE INTEREST EARNED OF CORPUS FUND. THE R ELEVANT FINDING OF THE AO READS AS UNDER: - 1. INTEREST ON CORPUS FUND: - AS PER SECTION 11(1)(D) ONLY INCOME IN THE FORM OF VOLUNTARY CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT THEY SHALL FORM PART OF THE CORPUS OF THE TRUST OR INSTITUTION SHA LL BE OUTSIDE THE SCOPE OF INCOME. AS MENTIONED IN THE ABOVE TABLE (COL.A) THE INTEREST ON CORPUS FUND WHICH WAS ADDED TO THE CORPUS FUND WAS RS37 76 50 000/ - . THE ASSESSEE WAS ASKED TO PRODUCE DETAILS LIKE TOTAL NUMBER OF DONORS WHO HAVE GIVEN SPECIFIC DIRECTION TO ACCUMULATE INTEREST ON THE CORPUS FUND DONATED BY THEM IN RESPECT OF INTEREST ADDED TO THE CORPUS DURING THE RELEVANT YEAR PERIOD SPECIFIED BY THEM ETC AND EVIDENCES SUPPORTING THE SAME. THE DETAILS FURNISHED VIDE LETTER DATED 24/03/2015 ARE AS UNDER: - S.NO. TOTAL NO. OF DONORS WHO HAVE GIVEN SPECIFIC DIRECTION TO ACCUMULATE INTEREST ON THE FUNDS DONATED BY THEM PERIOD OF ACCUMUL ATION AMOUNT INTEREST REMARKS 1 2 84958 23 10 YRS. 5 YRS 698 937 121 960 000 ___________ 699 897 1 2 _______ 37.76 CR. 1. NO OF DONORS IS THOSE WHO HAVE GIVEN SPECIFIC DIRECTION DURING THE YEAR. 2.INT. INCLUDES ON CURRENT YEARS AS WELL AS OPENING BALANCE. THE ASSESSEE PRODUCED COPIES OF LETTERS FOR VERIFICATION. OUT OF IT CERTAIN CASES WERE S ELECTED AND THE ASSESSEE WAS ASKED TO PRODUCE ORIGINAL LETTERS FOR VERIFICATION ON A RANDOM BASIS. IN THE LETTERS VERIFIED THERE IS SUCH DIRECTION. HOWEVER FROM THIS NO GENERAL CONCLUSION CAN BE REACHED. UNDER THE ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 4 CIRCUMSTANCES INTEREST ACCRUING ON C ORPUS FUND NEED TO BE TREATED AS THE INCOME OF THE ASSESSEE TO BE APPLIED FOR CHARITABLE PURPOSES. HENCE THE SAID INTEREST ON CORPUS FUND AMOUNTING TO RS.37 76 50 00/ - IS INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR AND NOT CONSIDERED AS FORMING P ART OF CORPUS WHICH IS EXEMPT SECTION 11(1)(D). 4. ON FURTHER APPEAL THE CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDING OF THE CIT(A) READ AS UNDER: - 6.4. I CAREFULLY EXAMINED THE CAPTIONED ISSUE. ON A PLAIN READING OF SECTION 12 OF THE ACT IT IS OBVIOUS THAT ANY VOLUNTARY CONTRIBUTION WHICH IS MADE WITH A SPECIFIC DIRECTION THAT IT SHALL FORM PART OF THE CORPUS OF THE 'TRUST WOULD NOT BE DEEMED TO BE INCOME DERIVED FROM THE PROPERTY HELD BY THE TRUST AND IT CANNOT BE T REATED AS INCOME OF THE RECEIVING TRUST FOR THE PURPOSE OF SECTION 11(1)(D) AS WELL. WHEN THE VOLUNTARY CONTRIBUTION MADE WITH A SPECIFIC DIRECTION THAT IT SHALL FORM PART OF THE CORPUS OF THE TRUST ITSELF CANNOT BE TREATED AS INCOME BOTH U/S 11 AND U/S 12 THEN HOW THE INTEREST EARNED ON SUCH VOLUNTARY CONTRIBUTION KEPT IN TERM DEPOSITS WITH BANKS COULD BE TREATED AS INCOME OF THE TRUST. BY VIRTUE OF THE PROVISIONS OF SECTION 11(1)(A) OF THE ACT INTEREST RECEIVED/EARNED FROM BANK DEPOSITS IS EXEMPT FROM TA X NETWORK BUT THE REQUISITE QUALIFICATION FOR ATTRACTING THE ABOVE MENTIONED SECTION IS THAT SUCH INCOME SHOULD BE DERIVED FROM THE PROPERTY HELD BY THE TRUST FOR CHARITABLE PURPOSE. IT IS NOT DISPUTED IN THE INSTANT CASE OF THE APPELLANT THAT THE INTERES T HAD BEEN EARNED ON DEPOSITS WHICH ARE TO BE TREATED AS PROPERTY OF THE APPELLANT AND SECTION 11 OF THE ACT CLEARLY EXEMPT INCOME DERIVED FROM SUCH PROPERTY HELD BY THE TRUST FOR CHARITABLE PURPOSE. HERE IS THE CASE DONATION IS GIVEN WITH A CONDITION TO K EEP THE SAME IN BANK DEPOSITS EARN INTEREST THEREON KEEP BOTH THE PRINCIPAL AND INTEREST CONTINUOUSLY WITH BANK FOR A STIPULATED PERIOD AND USE BOTH THE FUND AND INTEREST AT THE END OF STIPULATED PERIOD FOR CHARITY. FOR THE CONTRIBUTION MADE THROUGH WHIC H INTEREST IS TO BE EARNED THE APPELLANT IS ACTUALLY ACTING AS CUSTODIAN UNTIL IT BECOMES THE INCOME OF THE TRUST AT THE END OF THE STIPULATED PERIOD. EVEN AFTER BECOMING INCOME OF THE TRUST AFTER STIPULATED PERIOD THE INTEREST IS ANYHOW GOING TO BE EXEM PTED U/S 11(1)(A) IF IT IS SPENT FOR THE CHARITABLE PURPOSE FOR WHICH THE TRUST IS CREATED. THE VERY CONDITION THE DONORS HAVE CONTEMPLATING THAT DON'T SPEND IMMEDIATELY BUT EARN INTEREST KEEPING THE CORPUS FUND IN THE BANK DEPOSITS FOR CERTAIN PERIOD AND THEN SPEND FOR CHARITY WOULD LITERALLY DEPRIVE THE APPELLANT TO HAVE BOTH THE CORPUS FUND AND INTEREST EARNED THEREON AS ITS INCOME DURING THE INTERMITTENT PERIOD THE PERIOD BETWEEN THE CONTRIBUTION OF DONATION AND END OF THE STIPULATED PERIOD. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE DONATIONS WERE MADE WITHOUT SPECIFIC CONDITIONS TO BE FOLLOWED BY THE APPELLANT. IT IS ALSO NOT THE CASE THAT THE APPELLANT FAILED TO BRING OUT DOCUMENTARY EVIDENCE FOR THE DONATION RECEIVED AND VERIFICATION CARR IED OUT BY THE ASSESSING OFFICER RESULTED IN SHORTFALLS TO THE CLAIM THE APPELLANT HAD MADE. AS ARGUED BY THE AUTHORIZED REPRESENTATIVE UNLESS THE INCOME IS RECEIVED ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 5 HOW IT COULD BE APPLIED FOR CHARITY. THE INCOME SHOULD ACTUALLY BE EARNED AND CANNOT BE DU E FROM. INCOME ACTUALLY EARNED ALONE CAN BE APPLIED FOR CHARITY. THE INCOME WHICH IS DUE FROM IS A NOTIONAL INCOME AND CANNOT BE ACTUALLY SPENT FOR CHARITY PURPOSE. THIS BEING THE FACTUAL POSITION I DON'T FIND ANY INFIRMITY IN THE STAND OF THE APPELLANT T HAT THE INTEREST EARNED ON THE CORPUS FUND CANNOT BE TREATED AS ITS INCOME. RELIANCE IS PLACED HERE IN ADDITION TO THE DECISIONS THE APPELLANT RELIED ON AS MENTIONED SUPRA TO THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS VANCHI TRUS T & ANOTHER (127 ITR 227) WHEREIN IT WAS HELD THAT II A CONTRIBUTION GIVEN AND ACCEPTED WITH A SPECIFIC STIPULATION THAT IT SHALL BE TREATED ONLY AS CORPUS OF THE RECEIVING TRUST AND NOT AS INCOME WILL FALL WITHIN THE SCOPE OF SECTION 12(1) AND A VOLUNTARY CONTRIBUTION SO MADE WILL NOT BE TAKEN INTO THE DESCRIPTION ( SUCH CONTRIBUTIONS AS ARE REFERRED TO IN SUB - SECTION (1) ( CONTAINED IN SUB - SECTION (2) AND CANNOT BE TREATED AS THE INCOME OF THE RECEIVING TRUST FOR THE PURPOSE OF SECTION 11 '. RELIANCE IS A LSO PLACED HERE TO THE DECISION OF THE HON'BLE HIGH COURTS OF GUJARAT AND PUNJAB & HARYANA NAMELY 1.CLT VS STHANAKVASI VARDHANMAN VANIK JAIN SANGH (260 ITR 366(GUJ)) 2.CLT VS HARYANA CM RELIEF FUND (309 ITR 275 (P&H)) AND 3.CLT VS PUNJAB ENERGY DEVELOPMEN T AGENCY (323 ITR 463 (P&H)). IN VIEW OF THE ABOVE I AM OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS NOT JUSTIFIED THE STAND TAKEN IN TREATING THE INTEREST ACCRUED AND CREDITED TO THE CORPUS FUND AS INCOME OF THE APPELLANT AND BRINGING THE SAM E TO TAX. ACCORDINGLY THE ADDITION MADE ON ACCOUNT OF TREATING THE INTEREST EARNED ON CORPUS FUND AS INCOME OF THE APPELLANT TRUST IS HEREBY DELETED. APPEAL ON THIS GROUND HENCE IS ALLOWED. 5. AGGRIEVED REVENUE IS IN APPEAL BEFORE US. THE LD. D.R REL IED UPON THE FINDINGS OF THE ASSESSING OFFICER. ON THE OTHER HAND LD. A.R REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES AND RELIED ON THE FINDINGS/ CONCLUSIONS OF THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE WAS IN RECEIPT OF CONTRIBUTIONS FROM DONORS WHO HAD MADE SPECIFIC CONDITION THAT THE DONATION WAS TO BE TREATED AS CORPUS DONATIONS AND THE INTEREST EARNED THEREON HAS ALSO TO BE ADDED TO THE CORPUS. THE CONDITIONS ON WHIC H THE CONTRIBUTIONS ARE MADE ARE REGULATED BY THE DONORS AND HENCE THE ASSESSEE TRUST HAD NO OTHER GO BUT TO FOLLOW THE DIRECTIONS LAID DOWN BY THE DONORS. ACCORDINGLY THE CORPUS DONATIONS AND THE INTEREST EARNED OUT OF SUCH ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 6 CORPUS DONATIONS WERE CLAIMED AS EXEMPT U/S 11(1)(D) AS ACCORDING TO THE ASSESSEE TRUST INTEREST GETS ADDED ON TO THE CORPUS. THE ASSESSING OFFICER DID NOT AGREE TO THIS TREATMENT WITH REGARD TO THE INTEREST EARNED AND HENCE INCLUDED IT AS INCOME U/S 11 (1) OF THE ACT. 6.1 IT WAS THE CASE OF THE AO THAT THE ASSESSEE HAD PRODUCED COPIES OF LETTERS FOR VERIFICATION AND ON SUCH VERIFICATION THE AO HAS FOUND OUT THAT THERE IS A SPECIFIC DIRECTION FROM THE DONORS TO ACCUMULATE THE INTEREST TO THE PRINCIPAL CORPUS FUND DEPOSITS FOR PER IODS RANGING FROM 5 TO 12 YEARS. HOWEVER ACCORDING TO HIM NO GENERAL CONCLUSION CAN BE REACHED. HE THEREFORE CONCLUDED THAT INTEREST ACCRUING ON CORPUS FUND DEPOSITS NEED TO BE TREATED AS INCOME OF THE ASSESSEE TO BE APPLIED FOR CHARITABLE PURPOSES AND SHALL NOT FORM PART OF CORPUS FUND FOR EXEMPTION U/S 11(1 )(D) OF THE IT ACT. 6.2 THE CIT(APPEALS) FOUND THAT THE AO HAD MADE VERIFICATION OF ORIGINAL LETTERS PRODUCED BY THE ASSESSEE AND GOT SATISFIED BOTH WITH RESPECT TO DONATIONS MADE AND CONDITIONS C ONTEMPLATED THEREIN. THE CIT(APPEALS) HAS OBSERVED IN PARA 6.2 OF THE ORDER(ASST YEAR 2007 - 08) THAT THOUGH THE AO CAME TO THE CONCLUSION THAT THE INTEREST ACCRUED ON CORPUS FUND OUGHT TO HAVE BEEN TREATED AS INCOME OF THE ASSESSEE TO BE APPLIED FOR CHARITA BLE PURPOSE AND THEREBY CANNOT FORM PART OF CORPUS FUND BUT HAVE TO BE TREATED AS INCOME TO BE APPLIED FOR CHARITABLE PURPOSES NOTHING MUCH HAS BEEN DISCUSSED ABOUT SUCH A TREATMENT IN THE ASST. ORDER. THE CIT(APPEALS) OBSERVED THAT THE AO HAS ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 7 NOT GIVEN A FINDING AS TO WHY THE INTEREST ACCRUED SHOULD BE TREATED AS INCOME OF THE ASSESSEE AND HOW IT WOULD NOT FORM PART OF CORPUS FUND TO BE ELIGIBLE FOR EXEMPTION. THE AO HAS MERELY REMARKED AFTER SEEING THE CONFIRMATIONS 'FROM THIS NO GENERAL CONCLUSION CAN BE REACHED'. THE FINDINGS OF THE CIT(APPEALS) ARE CONFIRMED IN PARA 6.4 OF THE APPELLATE ORDER FOR ASST.YEAR 2007 - 08. THE CIT(APPEALS) RELYING ON THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF CIT VS. VANCHI TRUST AND ANOTHER 127 ITR 227 (KER) HC OF GUJARAT IN THE CASE OF CIT VS. STHANAK VASI VARDHAN MAN VANIK JAIN SANGH 260 ITR 366 (GUJ) AND PUNJAB & HARYANA HC IN THE CASES OF CIT VS. HARIYANA CM RELIEF FUND 309 ITR 275 (P & H) AND CIT VS. PUNJAB ENERGY DEVELOPMENT AGENCY 323 ITR 463 ( P & H) HELD THAT INTEREST ACCRUED AND CREDITED TO THE CORPUS FUND CANNOT BE TREATED AS INCOME OF THE ASSESSEE. THE CONCLUSIONS DRAWN BY THE CIT(APPEALS) ARE: I ) THE INTEREST GOT ADDED ON TO THE DEPOSIT BY VIRTUE OF SPECIFIC DIRECTIONS TO DO SO AND BOTH THE PRINC IPAL AND INTEREST CONTINUOUSLY REMAINED WITH THE BANK. II ) THE INCOME DOES NOT REACH THE HANDS OF THE ASSESSEE AS IT GETS ADDED ON TO THE DEPOSIT. IN OTHER WORDS INCOME SHOULD ACTUALLY BE EARNED AND CANNOT BE DUE FROM WHICH IS A NOTIONAL INCOME AND CAN NOT BE ACTUALLY SPENT FOR CHARITABLE PURPOSES. ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 8 III ) IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAD FAILED TO BRING OUT DOCUMENTARY EVIDENCE FOR DONATIONS RECEIVED AND MANDATE GIVEN. ALL THESE WERE VERIFIED BY THE AO. 6.3 THUS AFTER GOING INTO THE FACTUAL AND LEGAL POSITION THE CIT(A) CAME TO THE CONCLUSION THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE INTEREST ACCRUED AND CREDITED TO THE CORPUS FUND AS INCOME OF THE APPELLANT. 6.4 IN THE GROUNDS OF APPEAL IN POINT 2(A) THE DE PARTMENT HAS TAKEN A STAND THAT NEITHER THE INTENTION OF THE DONOR NOR THE OBJECTS OF THE TRUST WILL BE FULFILLED SINCE BOTH THE CAPITAL AND INTEREST WILL NOT BE APPLIED FOR THE OBJECTS OF THE TRUST IN THE INTEREST OF BENEFICIARIES AND CONTINUE TO REMAIN U NUTILISED PERPETUALLY. THIS ARGUMENT IS INCORRECT SINCE THE MANDATE IS FOR SPECIFIC NUMBER OF YEARS FOR WHICH PERIOD ALONE THE INTEREST GETS ADDED TO THE CORPUS. THEREAFTER THE INTEREST ON SUCH CORPUS BECOMES AVAILABLE FOR THE OBJECTS OF THE TRUST. THEREFO RE THIS ARGUMENT OF THE DEPARTMENT IS INCORRECT. 6.5 IN GROUND 2(B) THE DEPARTMENT HAS TAKEN A STAND THAT THERE IS NO PROVISION UNDER THE INCOME TAX ACT WHICH EXEMPTS INTEREST INCOME OUT OF DEPOSITS MADE OUT OF THE CORPUS DONATIONS U/S 11 (1) (D) OF THE IT ACT.. IN THE CASE OF THE ASSESSEE: THE ISSUE IS NOT WITH REGARD TO EXEMPTING INTEREST INCOME OUT OF THE DEPOSITS MADE OF CORPUS FUNDS BUT THE QUESTION IS WHETHER THE INTEREST EARNED ON SUCH CORPUS DONATIONS KEPT AS DEPOSITS WITH A SPECIFIC MANDA TE TO ACCRUE THE INTEREST ON THE PRINCIPAL WOULD NOT AMOUNT TO THE ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 9 CORPUS ITSELF BY VIRTUE OF AN OVERRIDING TITLE CREATED AS A RESULT OF THE MANDATE. 6.6 IN GROUND 2 (C) THE DEPARTMENT HAS TAKEN A GROUND THAT INTENTION OF THE DONOR CAN BE RESTRICT ED ONLY TO THE AMOUNT OF CORPUS DONATIONS MADE AND NOT THE INCOME EARNED THEREON. THERE IS NO SUCH RESTRICTION IN THE INCOME TAX ACT WHATSOEVER AND THEREFORE THAT GROUND IS ALSO NOT SUSTAINABLE. UNLESS THE INCOME IS RECEIVED IN A PARTICULAR YEAR IT CANN OT BE APPLIED. THE INTEREST FROM CORPUS DEPOSITS IS ALSO TAKEN TO THE CORPUS FUND AND HENCE THE ASSESSEE HAD RIGHTLY EXCLUDED THE INTEREST INCOME ON TERM DEPOSITS WITH BANK WHICH WERE ACCRUED BUT NOT DUE. THIS IS BEING CONSISTENTLY FOLLOWED BY THE ASSESSEE . 6.7 IN ITO VS. SHRISACHYAYA MATAJI TRUST OSIAN JODHPUR ITA NO.538/JODH/2013 DATED 09/05/2014 THE JODHPUR BENCH OF ITAT HELD THAT IF A VOLUNTARY CONTRIBUTION IS MADE WITH A SPECIFIC DIRECTION IT SHALL BE TREATED AS CAPITAL OF THE TRUST FOR CARRYIN G ON ITS CHARITABLE OR RELIGIOUS ACTIVITIES. THEN SUCH AN INCOME FALLS UNDER SECTION 11 (1) (D) AS IS NOT LIABLE TO TAX. IF THE INTENTION OF THE DONOR IS TO GIVE THAT MONEY TO A TRUST TO KEEP IN TRUST THE ACCOUNT IN DEPOSIT AND UTILISE THE INCOME THEREFROM FOR CARRYING ON A PARTICULAR ACTIVITY IT SATISFIES THE DEFINITION PART OF THE CORPUS. THE ASSESSEE WOULD BE ENTITLED TO THE BENEFIT OF EXEMPTIONS FROM PAYMENT OF TAX. ITA NO 185 TO188/COCH/2016 (ASST YEARS 2007 - 08 TO 2009 - 10 & 20 12 - 13 ) 10 7. IN VIEW OF THE AFORESAID REASONING AND THE JUDICIAL PRONOUNCEMENTS WE HOLD THAT TH E CIT(A)S ORDER IS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR . IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT APPEALS FIELD BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF SEPT 2016 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 27 TH SEPT 2016 RAJ* C OPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT COCHIN