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2015 (7) TMI 989 - ITAT MUMBAI

2015 (7) TMI 989 - ITAT MUMBAI - TMI - Offerings at the Samadhi Shrine of Swami Muktanand and at the temple of Bhagwan Nityanand received in donation boxes- Taxing the amount invoking the provisions of section 115BBC - Held that:- Reverting to the definition of anonymous donations under sub section (3) of section 115BBC, we find that it has been mentioned that anonymous donations means voluntary contributions where the person receiving such contributions does not maintain a record of the identit .....

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inflow of unaccounted/black money into the system with a modus operandi to make out as a part of the accounts of the institutions like university, medical institutions where the problem relating to the receipt of capitation fees, etc. is generally highlighted. Under such circumstances, we do not find any justification on the part of the Ld. CIT(A) in taxing the offerings received in the hundis/donation boxes as income of the assessee under section 115BBC. - Decided in favour of assessee. - ITA N .....

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volved therein are identical in nature, hence the same are taken together for disposal by this common order. For the sake of convenience the facts have been taken from the ITA No.3466/M/2012 for A.Y. 2007-08. ITA No.3466/M/2012 for A.Y. 2007-08 2. The assessee has taken the following grounds of appeal: 1. The Ld. Commissioner of Income-tax (Appeals)-I, Thane [hereinafter referred as "Ld. CIT(A)"] erred in confirming the action of the Assessing Officer in taxing the amount of ₹ 28 .....

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ry contributions" or anonymous donations as contemplated under section 115BBC. The Appellant, therefore, prays that taxing the amount of ₹ 28,25,536/- invoking the provisions of section 115BBC is not at all justified and hence, the same may be deleted. 3. Without prejudice to the above, the Ld. CIT(A) failed to appreciate that having taxed the amount of ₹ 28,25,536/-, the amount required to be spent on the objects of the trust in terms of Explanation 2 to section 11(1) in the su .....

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nd and at Bhagwan Nityanand temple and paduka. A record had been maintained by the assessee in respect of paduka offerings at Siddha Yoga Dhyan Kentras in different countries all over the world amounting to ₹ 27,04,323/-. It has been explained by the assessee that out of the said amount of ₹ 27,04,323/- an amount of ₹ 18,99,571/- was received by cheque, demand draft etc. Record has also been maintained regarding cash receipts of ₹ 8,04,752/- and complete details of name a .....

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hat the assessee had not maintained the record relating to the other donations detail of which is as under: i) Offerings in the Samadhi Shrine of Swami Muktanand of ₹ 9,62,089/-. ii) Offering in the Nityanand Dhyan Mandir of ₹ 17,23,952/- iii) Offering in Kind (Gold and Silver Articles) of ₹ 1,39,495/- The Ld. CIT(A), therefore, held that as per the provisions of section 115BBC anonymous donations as detailed above were liable to be taxed at the rate of 30%. Aggrieved by the or .....

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taxed in certain cases. 115BBC. (1) Where the total income of an assessee, being a person in receipt of income on behalf of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via) or any fund or institution referred to in subclause (iv) or any trust or institution referred to in sub-clause (v) of clause (23C) of section 10 or any trust or institution referred t .....

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ed by the aggregate of anonymous donations received.] _________________ The following clause (ii) shall be substituted for the existing clause (ii) of sub-section (1) of section 115BBC by the Finance (No.2) Act, 2014, w.e.f. 1- 4-2015: (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received in excess of the amount referred to in subclause (A) or sub-clause (B) of clause (i), as the case ma .....

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t 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. 5. The section 115BBC has been inserted by Finance Act, 2006 w.e.f. 01.04.07. A perusal of the above section reve .....

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itution established for religious purposes (b) to any trust or institution created or established for religions and charitable purposes other than any anonymous donations made with a specific direction that such donation is for any universities, educational institutions, hospital or medical institution etc. A careful reading of the entire section of 115BBC reveals that the provisions have been meant to check the inflow of black money/unaccounted money into the system/institutions such as univers .....

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s clear that the provisions of sub section (1) will not apply to the donations like that has been received by the assessee in donation boxes from numerous devotees who have offered the offerings on account of respect, esteem, regard, reference and their prayer for the deity/siddha peeth. Such type of offerings are made/put into the donation box by numerous visitors and its generally not possible for any such type of institutions to make and keep record of each of the donor with his name address .....

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