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can anybody please guide me in the matter?

an educational trust is not eligible for exemption u/s 11 in the absence of registration u/s 12AA. Hence, they alternatively want to claim exemption u/s 10(23C)(iiiad) for which the condition is that annual average receipts should be less than 1 crore. My question is how to calculation this limit of Rs. 1 crore - (1) only fees income and other income credited to income and expenditure acccount will be counted ? or (2) the corpus donation received by the trust will also be included for 1 crore limit? Please guide me in the matter with applicable case laws.

Manog Gupta sir, the decisions cited were in the context when trust was eligible for exemption u/s 11. There is no dispute or doubt when trust is eligible for exemption u/s 11.

My question or confusion was when trust is not eligible for exmeption u/s 11 and when corpus donations will be taxed u/s 2(24) without corresponding deduction u/s 11(1)(d), can purchase of fixed assets be claimed as deduction?

The confusion arose as purchase of fixed assets was treated as application of income for the purpose of section 11 in various cases. When section 11 benefit is not there, can this benefit be claimed by trust?

assuming that corpus donations will be taxed, can we demand purchase of fixed assets as application of income?

i understand that income of the trust is to be computed as per accounting principle and not as per tax principles. so out of gross income of the trust, expenses will be deducted first. thereafter, can we claim purchase of fixed assets as application of income? kindly advise.

Thank you very much CA Manoj gupta for sharing your expert knowledge. Let me refine the question to have possiblity of corpus donation not being taxed.

The said trust has not claimed any exemption u/s 11 in the return of income. Will this factor matter? can we argue that when we have not claimed exemption in return of income, normal provisons should apply and as per that, corpus donation is  capital receipt? i feel less chance because of section 2(24). kindly advise.

Is there any other way out for this? kindly advise.

Thank you very much in advance

If anybody can guide me as the matter is urgent for me. Thanks in advance.

Friends,

One trust is not eligible for exemption u/s 11 in a year as it applied for registration u/s 12A belatedly. The said trust had received certain corpus donations in that year. What will be the taxability thereof in the absence of exemption u/s 11? are they receipts liable for tax or capital receipt? kindly advise.

thank you very much friends for your time and valuable feed back. I had raised the query for the same reason of ambiguity in the matter. It looks that what was intended at the time of budget has not been made explicit in the statute. This has lead to the debatable position. Let us look at the issue from another angle.

Conversion of firm into joint Stock company under part IX of Companies Act, 1956 is exempt from capital gain tax by virtue of courts' rulings though the same has not been explicitely provided in the statute. The courts have taken the view that in case of such coversion, there is a statutory vesting of assets and liabilities and there is no simaltaneous existance of transferor and transferee which is otherwise there in every case and therefore no capital gain arises. Can this legal proposition equally apply to the case of conversion of firm into LLP when there is no explicit provision in the statute? Please give your views.

is conversion of firm into LLP is tax free in respect of capital gain or taxable? please advise

I have confusion regrding drafting of slump sale agreement. If partners in both the firms are same, should all of them sign twice i.e. one as purchaser and one as seller? Kindly advise.

Dear Friends,

I have following queries in the matter of conversion of firm into LLP

(1) There is no specific exemption from capital gain. However, firm and LLP both are to be treated as firm for the purpose of income tax assessment. Does it mean that there is no change in entity and hence no capital gain?

(2) New PAN of the LLP to be taken after conversion or the old PAN of the firm will continue to apply to the LLP?

(3) whether two set of accounts i.e. one for the firm and another for the period of LLP to be prepared or only one set of books will suffice.

(4) only one combined return is to be filed or two returns i,e, one for firm and one for LLP to be filed?

Kindly advise and share your valulable views.

Thank you to all in advance.

The point is of harrassment to new comers. The situation sometimes is so bad that even for a meritorious matter, one has to go through the root of hook and crook. New comers always suffer before authorities and that is why hook or crook comes into picture. The problem is that in our country, the laws involve so much of subjectivity in stead of objectivity. That is why we often find different decisions in case of same situation and we are unable to know the real reasons behind it though apparently sophisticated reasons are always given. This is a vicious circle wherein when one citizen loses confidence, he also prefers to go through the channles of hook and crook. That is why i request that we all should put forward such suggestions that help in making the system more and more objective. Then, who appears will never be a matter.

I think you guys are diverting the matter to a different level. The point is about the practise being followed at the ITAT level.

As far as "hook or crook" matter is concerned, grilling before ITAT can still not be justified. See, no one has right to question the integrity of lower decision making authority because this sort of question can be raised for each and every authority be it AO or CIT(A) or ITAT. The point is that the decision of every authority should be based on facts and legal position of each matter and not on who appears for the assessee. Further, the practise for the assessee and the department should be same before ITAT as both are equal party before ITAT.

please, do not just go on discussing on this forum. We all know very well as to what is really happening. Let us do something serious to bring this to the notice of President and law ministry. Otherwise, nothing will happen and we will keep on criticizing this on forums justice will be bought and sold in the vegetable market. I urge - let us do something.

i feel your suggestion is good one. The department after going through the paper book of the assessee raises some questions/counter replies directly at the time of hearing. In such a case, large number of cases are set aside to the AO. This should be stopped for two reasons:
(1) the holy task of the ITAT is to grant justice to the parties which is not served in case of a set aside matter. Set aside should be an exception when both the assessee and department both remain present before ITAT (2) The department has no cost of litigation upto ITAT whereas the assessee has to bear a definite cost irrespective of who files appeal. Further, there are very rare cases wherein the assessees are granted cost for frivolous appeals. It is very much desired that the present system is suitably improved. In fact, we all should bring this points to president through our association with a reuest to issue some circular for adressing this type of issues.