9911796707
TMI Blog2025 (5) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ,82,506/- received for Covid relief were taxable as the income of the assessee u/s 56(2)(x) of the Act. 5. By way of an additional ground of appeal, the assessee has challenged the validity of the order u/s 175 of the Act claiming that the same deserves to be quashed. Since this additional ground goes to the root of the matter, the same is addressed first. 6. Representatives of both the sides were heard at length, case records carefully perused and the judicial decisions referred to and relied upon duly considered. 7. Briefly stated the facts of the case are that the assessee is a journalist and a columnist for the Washington Post newspaper. The AO was in the know of a complaint against the assessee with regard to the donation fund she raised in three separate campaigns in Ketto platform. The complaint was investigated by the investigation wing and a report was submitted which included the following:- "a. Ms. Rana Ayyub (the assessee) has received a total of Rs. 2,69,50,695/- as donations through 3 donation campaigns started on the platform "ketto". b. Out of the same Rs. 80,49,856/- have been received in foreign currency. c. The money was received in her father's an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,15,07 - - 37,15,071 Rana Ayyub Shaikh - - 72,01,786 72,01,786 Total 1,23,07,134 66,74,082 79,63,463 2,69,44,679 8.2. It would be pertinent to mention here that Mohammed Ayyub Shaikh is the father of the assessee and Iffat Shaikh is the sister of the assessee. A substantial amount of donations were transferred from her father and sister's accounts to the account of the assessee as under:- in Rs. Transfers Total Receipt Transfer to Rana Transfer in Net Receipt Mohammed Ayyub Shaikh 1,60,27,822 -84,40,000 75,87,822 Iffat Shaikh 37,15,071 -36,40,000 75,071 Rana Ayyub Shaikh 72,01,786 1,20,80,000 1,92,81,786 Total 2,69,44,679 -1,20,80,000 1,20,80,000 2,69,44,679 8.3. The AO found that in spite of time spent of more than one year from the first campaign, the assessee has unutilized funds of approximately Rs. 2.4 Crores, for which no separate accounts were maintained which makes it not possible to segregate funds used from each campaign. The account in which the money was withdrawn by the assessee or her family members were personal savings account. Moreover, instead of carrying out any relief work, the assessee opened a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of sub-sections (2), (3), (4), (5) and (6) of section 174 of the Act, which read as under:- "Assessment of persons leaving India. 174. (1) Notwithstanding anything contained in section 4, when it appears to the [Assessing] Officer that any individual may leave India during the current assessment year or shortly after its expiry and that he has no present intention of returning to India, the total income of such individual for the period from the expiry of the previous year for that assessment year up to the probable date of his departure from India shall be chargeable to tax in that assessment year. (2) The total income of each completed previous year or part of any previous year included in such period shall be chargeable to tax at the rate or rates in force in that assessment year, and separate assessments shall be made in respect of each such completed previous year or part of any previous year. (3) The [Assessing] Officer may estimate the income of such individual for such period or any part thereof, where it cannot be readily determined in the manner provided in this Act. (4) For the purpose of making an assessment under sub-section (1), the [Assessing] Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those funds but the same cannot be exhibited because the funds have been mixed up with her personal funds as no separate account was maintained. The stand of the assessee that, in case of Ketto, the beneficiary is clearly identified by Ketto to whom the funds are to be transferred, is also not acceptable as the funds have been transferred in the personal account of the assessee, her father and her sister. When the assessee was cornered by the Tax Department, she offered the entire donations raised from Ketto platform as "income from other sources". 12. Considering the facts of the case in totality, keeping in mind the transfer of funds, we have no hesitation to hold that provisions of Section 175 r.w. provisions of sub-sections (2), (3), (4), (5) and (6) of section 174 of the Act, squarely apply in case of the assessee and there is no error or infirmity in invoking the same by the AO and as confirmed by the ld. CIT(A). The additional ground raised by the assessee is accordingly dismissed. 13. On merits of the case, the ld. Counsel for the assessee vehemently argued that provisions of Section 56(2)(x) of the Act do not apply on the facts of the case. Strong reliance was placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections: 63[Provided also that in case of property being referred to in the second proviso to sub-section (1) of section 43CA, the provisions of sub-item (ii) of item (B) shall have effect as if for the words "ten per cent", the words "twenty per cent" had been substituted;] (c) any property, other than immovable property,- (A) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; (B) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration : Provided that this clause shall not apply to any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of clauses (XII) and (XIII) of this proviso, "family", in relation to an individual, shall have the same meaning as assigned to it in Explanation 1 to clause (5) of section 10:] 71[Provided further that clauses (VI) and (VII) of the first proviso shall not apply where any sum of money or any property has been received by any person referred to in sub-section (3) of section 13.] 72[Explanation.-For the purposes of this clause,- (a) the expressions "assessable", "fair market value", "jewellery", "relative" and "stamp duty value" shall have the same meanings as respectively assigned to them in the Explanation to clause (vii); and (b) the expression "property" shall have the same meaning as assigned to it in clause (d) of the Explanation to clause (vii) and shall include virtual digital asset;]]" 15. As mentioned elsewhere, the assessee has raised donations from three campaigns on Ketto platform without maintaining separate account and all the sums of money exceeded Rs. 50,000/- and all the money received were without any consideration. In our considered view, such donation receipts received in personal account with no liability to return, makes them taxable u/s 56(2)(x) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... farmers as also for relief work in different states for different purposes. But all the donations collected were parked in the savings bank account of the assessee and family members and no separate accounts were maintained. The funds were also used for personal purposes and also for investment in FDR and substantial amount of donation received remained un-utilized in spite of long time gap. The claim that the end use of these funds was initiated for charitable activities remains unproved. The manner in which the funds were collected, is also not understandable as the donations were collected and parked in the bank accounts of the relatives of the assessee. On the given facts, the donations collected by the assessee are taxable u/s 56(2)(x) of the Act and orders of the authorities below on this count cannot be faulted with. 18. All the decisions relied upon by the ld. Counsel for the assessee are mis-placed and not relevant to the facts of the case in hand. 18.1. In the case of Bijli Cotton Mills (P.) Ltd. (supra), the assessee used to realize a specified amount on account of dharmada for its customers on sales of yarn and bales of cotton and credited the amount in a separate ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
