TMI Blog2016 (7) TMI 1675X X X X Extracts X X X X X X X X Extracts X X X X ..... NTANT MEMBER AND SHRI MAHAVIR PRASAD JUDICIAL MEMBER For the Appellant : Shri B.B.Goenkar For the Respondent : Shri Umesh Kumar ORDER PER: MAHAVIR PRASAD, JM. This appeal is preferred by the Revenue against the order of Ld. CIT(A)-I, Lucknow deleting the addition of Rs. 1,74,35,100/- made by the Assessing Officer as unexplained cash credit. 2. The facts in brief born out from the record are that the assessee trust was formed on 31.05.2002 and is registered u/s 12AA of the Act, an assessment was made u/s 143(3) of the Act at total income of Rs. 1,74,35,100/-. During the year consideration, the assessee claimed to have received total donation of Rs. 2,21,00,000/- from 234 persons. The Assessing Officer accepted that donations to tune of Rs. 46,64,900/- are genuine and added back donations to tune of Rs. 1,74,35,100/- on the ground that capacity and genuineness of donors remained unproved. This addition was made as unexplained cash credits. 3. The ld. counsel for the assessee has contended that in order to establish the identity of the person from whom donations were received, the assessee has filed their PAN and addresses, details, etc. Therefore, no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer, on finding that the assessee was unable to satisfactorily explain the donations and the donors were fictitious persons, held that the assessee had tried to introduce unaccounted money in its books by way of donations and, therefore, the amount was to be treated as cash credit under section 68. On that basis, the benefit under section 11 was denied to the assessee. On appeal, the Commissioner (Appeals) held that treating donation as income under section 68 was not correct as the assessee had disclosed the donations as its income and had spent 75% of the amount for charitable purposes. On the revenue's appeal, the order of Commissioner (Appeals) was upheld by the Tribunal. On appeal it was held: To obtain the benefit of the exemption under section 11, an assessee is required to show that the donations were voluntary. In the instant case, the assessee had not only disclosed its donations, but had also submitted a list of donoRs. The fact that the complete list of donors was not filed or that the donors were not produced, did not necessarily lead to the inference that the assessee was trying to introduce unaccounted money by way of donation receipts. That was mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from nine persons as unexplained cash credits as section 68 has no application to the facts of the impugned case. 4.1 I also find that despite the fact that section 68 has no application to the facts of the case the appellant trust has duly discharged its onus to prove the identity and capacity of the donors and genuineness of the transactions with them. On perusal of the details and reasons recorded by the AO it is noted that addition u/s 68 as unexplained cash credits has been made by the AO on mere suspicion without conducting proper enquiries and bringing material evidence on record whereas the appellant has furnished large number of details and documents to prove the identity and capacity of the donors and genuineness of transactions with them which is listed in the table furnished by the AR of the appellant. In Dhakeshwari Cotton Mills Ltd. v. CIT, 26 ITR 775 (SC), the Hon'ble Apex Court has laid down that an ITO is entitled to act on material which may not be accepted as evidence in a Court of law, but the ITO is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and such other particulars as may be prescribed. Sub-section 1 provides that where the total income of an assessee being a person in receipt of income on behalf of any trust or institution referred to in section 11 includes income by way of anonymous donation, the income tax is payable by it on this amount as prescribed in the section. Sub-section 3 defines the expression anonymous donation in an exhaustive manner to be a case where the person receiving the donation does not maintain records of identity indicating the name and address of the contributor and such other particulars as may be prescribed. No other particular has been prescribed tinder this provision. The Board Circular No. 14 reported in 288 ITR (St.) 9 has explained these provisions which were introduced by the Finance Act, 2006 w.e.f. assessment year 2007-08, which is as under: 25.1 Income of wholly charitable or religious trusts or institutions as well as partly charitable or religious trusts or institutions is exempt from income-tax .under sections 11 and 12, subject to the fulfilment, inter alia, of certain conditions of application of income and investment in specified modes. Similarly, income of any u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided u/s 115BBC of the Act and the donations received by the appellant cannot be categorized as anonymous donations and subjected to tax as per provisions of section 115BBC of the Act. 5. Ld. DR of the Revenue supported the assessment order whereas Ld. AR of the assessee supported the order of Ld. CIT (A). 6. We have considered the rival submissions. We find that it is noted by the Assessing Officer in Para 7 of the assessment order that the donations amounting to Rs. 1,74,35,100/- the capacity and genuineness remain unproved for the reasons mentioned in the notice dated 12.03.2013 and in this order itself. The amount of Rs. 1,74,35,100/- was added to the income of the society as unexplained cash credits. We further noted that assessee itself has shown these donations of Rs. 2,21,00,000/- as income in the income and expenditure account for the year ended on 31.03.2010. Since the assessee has furnished complete details of the donors along with PAN, the said donation cannot be called to be anonymous donation. 7. Keeping in view the totality of the facts and circumstances of the case, we find that the order of the CIT(A) is cryptic and non speaking. If the CIT(A) was of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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