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2015 (7) TMI 648 - ITAT LUCKNOW

2015 (7) TMI 648 - ITAT LUCKNOW - [2015] 42 ITR (Trib) 43 (ITAT [Luck]) - Unexplained cash credits under section 68 - donations received - CIT(A) deleted addition - During the course of hearing, an argument was also raised that if the provisions of section 68 of the Act cannot be invoked, disallowance can be made by invoking the provisions of section 115BBC - Held that:- In the instant case, since the assessee has furnished complete details of the donors along with PAN, the said donation cannot .....

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ar Yadav and Shri. A. K. Garodia, JJ. For the Petitioner : Shri. Punit Kumar, D.R. For the Respondent : Shri. Rakesh Garg, Advocate ORDER PER SUNIL KUMAR YADAV: This appeal is preferred by the Revenue against the order of the ld. CIT(A) mainly on two grounds which are as under:- (1) The Ld. CIT(Appeal)-!, Lucknow has erred in law in deleting the demand of ₹ 5,82,920/- raised by the Assessing Officer. (2) The Ld. CIT(Appeals) has erred in law and on the facts of the case deleting the additi .....

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3. So far as ground No.2 is concerned, it is noticed that during the course of assessment proceedings the Assessing Officer has noted that the assessee-trust claimed to have received donation amounting to ₹ 19,10,400/-. All these donations were received in cash and the assessee was required to furnish the names and address of the donors. Assessee had furnished the list containing names and address of 250 persons, out of which 75 persons had given donations exceeding ₹ 10,000/- and th .....

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ly considered the donation of ₹ 1.28 lakhs received from six persons to be genuine and for the rest of the donation of ₹ 16.87 lakhs, he made addition after treating it to be unexplained cash credit. 4. The assessee preferred an appeal before the ld. CIT(A) and the ld. CIT(A) has re-examined the issue in the light of assessee s contentions and the documents relating to the donors. It was contended that out of 75 persons, 20 persons have confirmed payment of donation and for the remai .....

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d hoc or estimated addition. He accordingly deleted the addition. 5. Aggrieved, the Revenue has preferred an appeal before the Tribunal and has placed reliance upon the order of the Assessing Officer whereas the ld. counsel for the assessee has contended that in case of a charitable society, no addition can be made under section 68 of the Act and in support of this preposition, the assessee has placed reliance upon the order of this Bench of the Tribunal in the case of ACIT-1, Kanpur vs. M/s Sah .....

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donations can be verified, but the Assessing Officer has made addition under section 68 of the Act. 6. Having carefully examined the orders of the lower authorities and the documents placed before us in the light of the rival submissions, we find that undisputedly the assessee has furnished complete details of the donors and the copy of the same is available at pages 9 to 12 of the compilation of the assessee, in which the name and address of the donor along with PAN was given. The Assessing Of .....

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on. The relevant observations of the Tribunal are extracted hereunder for the sake of reference:- 6. Having carefully examined the orders of the lower authorities in the light of the rival submissions and the judgments referred to by the parties, we find that the assessee has some force in his arguments on merit. The issue of addition u/s 68 of the Act on account of corpus donation is squarely covered by the order of the Tribunal pertaining to assessment year 2005-06 in which corpus donation was .....

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1,371/- and addition of ₹ 8,35,000/- cannot be sustained again once it has been declared by the society as income/receipt. No double addition is called for. Even if a particular donation or credit cannot be proved and the assessee at the time of filing of the return declared the same as its income and further addition u/s 68 of such amount cannot be made. In this regard, we refer to the decision of the Hon'ble Delhi High Court in the case of DIT Exemption vs Keshav Social Charitable Fo .....

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he claim stating that the assessee could not furnish details regarding the donors and that it was just a way of introducing unaccounted money into the books of the assessee trust and thus treated the amount as cash credit under section 68 of the Act. The Tribunal held that since more than 75 per cent, of the donations received by the assessee was spent for charitable purposes, the addition was not justified. On appeal to the High Court : Held, dismissing the appeal, that to obtain benefit of the .....

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admittedly 75% of the donations were applied for charitable purposes. Section 68 of the Act had no application to the facts of the case because the assessee had in fact disclosed the donations of ₹ 18,24,200/- as its income and it could not be disputed that all receipts, other than corpus donations would be income in the hands of the assessee. There was thus full disclosure of income by the assessee and also application of the donations for charitable purposes. It was not in dispute that t .....

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ssessee was a public charitable institution and set aside the assessment with a direction to the Income-tax Officer to consider whether the assessee satisfied the requirements of sections 12, 12A and 13 of the Income-tax Act, 1961. The Tribunal held that the Commissioner of Income-tax (Appeals) ought not to have given the direction. On a reference: Held, (i) that the provisions contained in section 11 concerning the exemption of a public charitable institution do not take automatic effect. They .....

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come-tax (Appeals) was justified in issuing the direction to the Income-tax Officer to do so; (ii) that the Tribunal was under an obligation to consider all the pleas raised in the appeal. 21. The Hon'ble Supreme Court in the case of Program for Community Organisation, 248 ITR 01, has held that where trust received donations and applied for charitable purposes then assessee is entitled to accumulate 25% of such donation received. In the case of DIT (Exemption) vs Bharat Kalyan Pratishthan, 2 .....

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n in respect of these amounts. This disposes of grounds of Revenue relating to additions of ₹ 1,13,00,038/-, ₹ 1,00,000/-, ₹ 8,35,000/- and ₹ 46,71,371/-. 6.1 The view taken by the Tribunal was confirmed by Hon'ble Jurisdictional High Court in Income-tax Appeal No.267/2009. Copy of the judgment is placed on record. Since the Tribunal has taken a particular view in similar set of facts, we find no reason to take a contrary view in these appeals. Moreover, the CIT(A) ha .....

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ibunal has held that when the details of donors are filed, the donation cannot be called to be anonymous donation. The relevant observations of the Tribunal are extracted hereunder for the sake of reference:- 10. Having carefully examined the orders of the lower authorities and the relevant provisions of the Act, we find that after introduction of section 115BBC, the unanimous donation received by the assessee is also taxable in the hands of the recipient trust. The unanimous donation has also b .....

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on referred to in subclause (iv) or any trust or institution referred to in subclause (v) of clause (23C) of section 10 or any trust or institution referred to in section 11, includes any income by way of any anonymous donation, the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the income by way of any anonymous donation, at the rate of thirty per cent. ; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total .....

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or other medical institution run by such trust or institution. (3) For the purposes of this section, anonymous donation means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed. 10.1 As per sub section (3), unanimous donation are those donations for which no .....

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