9911796707
TMI Blog2015 (9) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... worthiness of the alleged donors and genuineness of transactions were not satisfactorily explained, even though the donations might have been applied for charitable purpose and donations might not be anonymous strictly as per definition. 2. During the course of hearing, the ld. counsel for the assessee has invited our attention to the fact that the impugned issue is squarely covered by the judgment of the Hon'ble jurisdictional High Court in the case of CIT vs. Uttaranchal Welfare Society, 42 taxmann.com 361. Besides, he has also placed reliance upon the judgment of the Hon'ble Delhi High Court in the case of Director of Income-tax (Exemption) vs. Keshav Social and Charitable Foundation, 278 ITR 152 (Delhi) and judgment in the case of Director of Income-tax vs. Hans Raj Samarak Society, 35 taxmann.com 642 (Delhi). The ld. counsel for the assessee has further contended that the assessee has received donation from various persons which was disallowed by the Assessing Officer by making addition under section 68 of the Income-tax Act, 1961 (hereinafter called in short "the Act") having ignored the fact that the assessee has taken the entire receipts of donation to its income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In my considered opinion adding part of the voluntary donations again as unexplained cash credits u/s 68 to the total income of the appellant amounted to taxing, the same income twice which .is not permissible. Reliance is placed on the following judgments a. Director of Income Tax (Exemption) v. Keshav Social and Charitable Foundation, [2005] 278 ITR 152 (Delhi): The assessee, a charitable trust, was engaged in the activity of providing medical advice to the poor and needy in various parts of the State. Duringthe relevant previous year, the assessee was asked to furnish the details of donations received by it. However, the Assessing 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 spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritable trust] - Assessment year 2006-07 - assessment year disallowed deduction under section 11 on finding unaccounted money by way of anonymous donation on purchase of capital assets - Tribunal observed that donation received by assessee was not anonymous donation because receipts were issued by assessee which were in custody of Department -Whether Tribunal was justified in holding that section 68 could not be applied, as donations had already been shown by assessee as income -Held, yes [Para 4] In view of the above it is held that -the AO was not justified in adding voluntary donations of Rs. 1,66,30,000/- received 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 mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust or institution created or established wholly for religious and charitable purposes other than any anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust 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." 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars as maybe prescribed." To be excluded from the definition of expression "anonymous donation" the person receiving the voluntary contributions referred to in section 2(24) (iia) is required to maintain a record of identity indicating the name and address of the contributor and such other particulars as may be prescribed. Since no other particulars have been prescribed under the provisions the person receiving the donation is under obligation to maintain the identity of donors indicating the name and address only. On perusal of the details furnished by the appellant it is seen that the appellant has not only furnished the names and addresses of the donors but also furnished a number of other details in respect of such donors viz. their PANs, copy of ITRs, copy of bank statements, their confirmations, financial statements, computation of income etc. In view of the above it is held that the appellant has established the identity of donors as 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." 6. Though the Revenue has taken a plea that fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
