2010 (3) TMI 1245 - AT - Income Tax

Summary

Issues involved: Appeal against order confirming addition of Rs. 3,50,000 u/s 68 of the Income-tax Act, 1961 for assessment year 2002-03.

Issue 1: Addition u/s 68 of the Act

The assessee, a trust registered u/s 12A of the Income-tax Act, running an educational institution, contested the addition of Rs. 3,50,000 received from a donor. The AO reopened assessment based on information about accommodation entry of Rs. 40,05,000. Assessee explained donations received, except the disputed amount, stating it was voluntary and utilized for charitable purposes. Citing a High Court decision, assessee argued against double taxation. The DR argued lack of explanation on donation source and denied benefit under sections 11 and 12. Tribunal noted the trust's registration, substantial donations received, and satisfactory details provided except for the disputed donation. Referring to a similar case, the Tribunal found in favor of the assessee, following the High Court's ruling that voluntary donations, even if details are incomplete, do not imply unaccounted money introduction. Consequently, the addition of Rs. 3,50,000 was deleted.

Decision:

The Tribunal allowed the appeal, deleting the addition of Rs. 3,50,000 u/s 68 of the Income-tax Act, 1961 for the assessment year 2002-03.