Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 765 - AT - Income TaxUndisclosed cash credits under section 68 - CIT(A) deleted part addition - Held that:- When the donors have given their permanent account numbers and their receipts would prove that the assessee has been able to prove the identity of the donors as well as proved that the donors have given donations towards corpus of the assessee-society and the donations have been utilised for the purpose of construction of the educational building. Therefore, the authorities below should not have made addition against the assessee. Therefore, we set aside the orders of the authorities below and delete the entire addition. - Decided in favour of assessee. Addition on account of alleged commission - unexplained expenditure under section 69C - Held that:- If the assessee has made any actual payment on account of commission to any person, the commission is stated to be given to some persons who have arranged the donations. Most of the donors have already confirmed giving of donations to the assessee and none of the donors have confirmed the version of the Assessing Officer if they have given donations to the assessee through commission agent, against commission payment. Therefore, the theory of commission agent arranging the donations is not proved through any reliable or cogent evidence. No material was also found during the course of search to support the findings of the authorities below if any commission is paid actually to the commission agent for arranging the donations. The assessee is a charitable society. Therefore, there was no need to make any payment by way of commission and even if any commission is paid, this would have been allowable deduction under section 37 of the Act. Therefore, in the absence of any specific material available on record, it is difficult to believe that any commission was paid by the assessee. No enquiries have been made from any recipient of the amount. The assessee was engaged only in construction of the building in the year under consideration. Therefore, there was no other source of income from where it could be stated that the assessee has earned undisclosed income or paid any commission. We have already decided major issue of unexplained donations above and have deleted the entire addition. Therefore, considering the totality of the facts and circumstances, we do not find any justification even to sustain part of the addition on account of alleged commission payment - Decided in favour of assessee. Taxing of the income of the assessee - income of the assessee society was exempt under section 10(23C)(vi) and section 12AA - Held that:- Learned counsel for the assessee stated that registration under section 12AA of the Act has already been cancelled, against which the assessee is in appeal. Therefore, this ground will not survive in favour of the assessee. On consideration of the above facts it is clear that once registration is cancelled under section 12AA(3) of the Act, the assessee would not get benefit of the same. Violation of aims and objects of the assessee-society - The assessee was at the stage of formation, i.e., construction of educational building and all corpus funds applied towards the construction of the college building and no specific findings of fact have been recorded against the assessee in this assessment year and whatever additions have been made by the Assessing Officer on account of donors' donation or commission payment, we have already deleted the addition and allowed the appeal of the assessee. Therefore, it is not the case of violation of any provisions of sections 11, 12 and 13 of the Act in this year. Therefore, the learned Commissioner of Income- tax (Appeals) was justified in allowing the appeal of the assessee on this issue. - Decided in favour of assessee. Addition on account of capitation fees from the students and addition being cash found in the residential premises of the chairman of the society - Held that:- No specific, reliable or cogent evidence was found during the course of search to prove that the assessee-society received any capitation fee or any cash belonged to the assessee-society. Therefore, both additions of ₹ 1.60 crores and ₹ 3,99,950 in the hands of the assessee- society are wholly unwarranted and are liable to be deleted. Since the Assessing Officer has failed to prove his case against the assessee on account of both additions, therefore, there is no question of violation of sections 11(3) and 13(3) of the Act in the case of the assessee. Considering the above discussion, we set aside the orders of the authorities below and delete the addition of ₹ 3,99,950 and ₹ 1.60 crores in the hands of the assessee. We also held that there is no violation of sections 11(3) and 13(3) of the Act in the case of the assessee. - Decided in favour of assessee. Cancel the registration under section 12AA - Held that:- There is no material available against the assessee-society at this stage to show that the assessee's activities are not genuine or have not been carried out in accordance with the objects of the trust. We may also note here that in the remaining assessment years 2005-06, 2006-07, 2007-08 and 2008-09, the Revenue Department did not find any adverse material against the assessee to prove that its activities are not genuine. There is no violation of sections 11, 12 and 13 of the Act. There is also no violation of conditions under section 80G of the Act. Therefore, considering the totality of the facts and circumstances, it is clear that the assessee-society has solely carried out the genuine educational activities and as such, there is no reason to cancel the registration under section 12AA of the Act or withdrawing the approval under section 80G of the Act.- Decided in favour of assessee.
|