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2015 (7) TMI 648 - AT - Income TaxUnexplained 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 be called to be anonymous donation. Therefore, provisions of section 115BBC of the Act cannot be invoked. Keeping in view the totality of the facts and circumstances of the case, we are of the considered opinion that no disallowance can be made either under section 68 of the Act or under section 115BBC of the Act. Therefore, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition - Decided against revenue.
Issues Involved:
1. Deletion of the demand of Rs. 5,82,920/- raised by the Assessing Officer. 2. Deletion of the addition of Rs. 16,87,000/- made by the Assessing Officer as unexplained cash credits under section 68 of the I.T. Act, 1961. 3. Holding that the Assessing Officer made additions on presumption without conducting proper inquiries and without recording proper satisfaction. Issue-wise Detailed Analysis: 1. Deletion of the demand of Rs. 5,82,920/-: - The Tribunal found that this ground does not emanate either from the order of the Assessing Officer or the CIT(A). Therefore, it was deemed devoid of merit and was rejected. 2. Deletion of the addition of Rs. 16,87,000/- as unexplained cash credits: - During the assessment proceedings, the Assessing Officer noted that the assessee-trust claimed to have received donations amounting to Rs. 19,10,400/-, all in cash. The assessee provided a list of 250 donors, with 75 donors contributing amounts exceeding Rs. 10,000/-, totaling Rs. 18.50 lakhs. - The Assessing Officer issued letters under section 133(6) to 20 donors on a test-check basis. Six donors, accounting for Rs. 1.28 lakhs, responded. The rest failed to provide income-tax acknowledgments or sources of cash donations. - Consequently, the Assessing Officer treated the remaining donation of Rs. 16.87 lakhs as unexplained cash credit and made an addition under section 68 of the Act. 3. Holding that the Assessing Officer made additions on presumption: - The assessee appealed to the CIT(A), arguing that the addition was made without proper inquiry, despite providing complete details of all donors, including their PAN. - The CIT(A) re-examined the issue and concluded that the Assessing Officer should have exercised satisfaction for each deposit individually, as section 68 does not prescribe ad hoc or estimated additions. Consequently, the CIT(A) deleted the addition. Tribunal's Findings: - The Tribunal noted that the assessee had furnished complete details of the donors, including names, addresses, and PAN. The Assessing Officer invoked section 68, which the Tribunal found inapplicable to donations received by a charitable society since the receipts were included in the total income of the assessee. - The Tribunal referenced its previous ruling in a similar case (ACIT-1, Kanpur vs. M/s Sahyog Jan Kalyan Samniti) and the judgment of the Hon'ble Delhi High Court in the case of Director of Income Tax vs. Hans Raj Samarak Society, which held that section 68 could not be invoked for donations already declared by the assessee. - The Tribunal also addressed the argument that disallowance could be made under section 115BBC if donor details were unavailable. It concluded that since the assessee maintained donor details, the donations could not be classified as anonymous, and section 115BBC could not be invoked. - The Tribunal upheld the CIT(A)'s order, finding no infirmity in the deletion of the addition. Conclusion: - The appeal by the Revenue was dismissed, and the Tribunal confirmed the CIT(A)'s decision to delete the addition of Rs. 16.87 lakhs and reject the demand of Rs. 5,82,920/-. The Tribunal emphasized that proper inquiries and satisfaction must be recorded by the Assessing Officer, and in this case, the provisions of section 68 and section 115BBC were not applicable.
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