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The Delhi High Court in [2013] 1 ITR-OL 512 (Del) held that where a charitable organization received donations towards its corpus which had been deposited in the bank and the money was spent for acquiring land for construction of a college such donations received towards corpus of the trust would be capital receipt and not revenue receipt chargeable to tax. The deptt SLP is pending before SC as of today on the question whether corpus donations are exempt from tax u/s 11(1)(d) only if assessee is registered u/s 12A/12AA of the Act.

In the meantime following this decision the Mumbai bench in [2016] 50 ITR (Trib) 355 (ITAT[Mum])held that corpus donations received by the assessee-trust are capital receipts being capital in nature and could not be brought to tax despite the fact that the assessee-trust was not registered under section 12A / 12AA of the Act.

Section 12 which defines what constitutes income of trust or institutions from contributions specifically exclude contributions made with a specific direction that they shall form part of the corpus of the trust or institution.

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