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TMI Blog2019 (12) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... een done in the instant case. Addition made by the AO and sustained by the CIT(A) is not justified. However, since the allegation of the AO is that the assessee had not given any bank statement of the subsequent year to substantiate that the amount had been refunded back, therefore, we restore the issue to the file of the Assessing Officer with a direction to verify the bank account of the assessee of the subsequent year and once the assessee proves that the amounts were, in fact, returned by those parties in subsequent year, the Assessing Officer is directed to delete the addition. So far as the decision relied on by the ld.CIT(A) in the case of CIT vs. Shree P. Subramoniam Religious Trust [ 2008 (12) TMI 374 - KERALA HIGH COURT] is concerned, the same, in our opinion, is not applicable to the facts of the present case since, in that case, the Hon'ble High Court has observed that the advance is only siphoning off funds and even after a gap of 5-6 years of expiry of the assessment year when the appeal was heard before the CIT(A), it was not proved that the advances so made were utilized for the purpose for which it was advanced. In the instant case, the advances which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, the Assessing Officer observed from the balance sheet of the assessee that it has introduced corpus donation to the extent of ₹ 13,53,600/-. He, therefore, asked the assessee to substantiate the same with documentary evidences in the shape of copy of ledger account, copy of bills/receipts issued and copy of confirmation of the parties. According to the Assessing Officer, the assessee simply filed copy of the ledger account maintained by the assessee. Since, according to him, the confirmations were not filed from any of the parties, the Assessing Officer made addition of ₹ 13,53,600/- to the total income of the assessee. 3. Similarly, the Assessing Officer found from the balance sheet that the assessee has shown loans and advances to the extent of ₹ 60 lakhs, the bifurcation of which is as under:- S.No. Name Amount 1. Ashwani Shah 100000 2. Asha Gupta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to the extent mentioned above. However, according to the Assessing Officer, the assessee could not give the purpose of such loan to the extent of ₹ 53 lakhs and the services being provided by the parties to whom the loan has been advanced by the assessee. According to him, merely filing the copy of confirmation or that the same has been subsequently returned is not sufficient. The statement of the assessee that the said loan was refunded by the parties in the subsequent year was also rejected by the Assessing Officer in absence of the copy of the bank account for the relevant period when such loans were refunded. He accordingly made addition of ₹ 53 lakhs to the total income of the assessee. 5. In appeal, the ld.CIT(A) confirmed both the additions made by the Assessing Officer. So far as the addition of ₹ 53 lakhs made by the Assessing Officer being advances given to various parties are concerned, the ld.CIT(A) sustained the addition made by the Assessing Officer by observing as under:- 6.1.3 1 have considered the assessment order and also the submissions of the appellant. It is an admitted fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shree P. Subramoniam Religious Trust (supra), it is held that the amount of advance given of ₹ 53 lakhs is an investment or deposit which is not in one of the modes as specified under section 11(5) and is a violation under section 13(l)(d). The addition made by the Assessing Officer is confirmed. 5.1 So far as the addition of ₹ 38,53,600/- made by the Assessing Officer on account of corpus donation is concerned, the ld.CIT(A) upheld the addition made by the Assessing Officer without admitting additional evidences filed before him in the shape of confirmations from the donors. The relevant observation of the CIT(A) at para 6.2.2. of the order reads as under:- 6.2.2 During the appellate proceedings, an application for admitting additional evidence under Rule 46A of the Income-tax Rules, 1962 was filed to furnish confirmations from the donors and give the requisite details which as per the appellant could not be furnished during the assessment proceedings. The said application under Rule 46A of the Income-tax Rules, 1962 has been rejected as per the discussion in paras 5.1 to 5.7 above. The appellant has also challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady been returned back by those persons. Further, the assessee has not claimed any exemption on account of such payments. Had there been any misappropriation of funds by the assessee, the Assessing Officer would have disallowed the exemption which he has not done. Further, the persons to whom such loans were given are not persons covered u/s 13(1)(c) of the IT Act, 1961. Therefore, the addition made by the Assessing Officer and sustained by the CIT(A) deserves to be deleted. So far as the decision relied on by the ld.CIT(A) is concerned, he submitted that the said decision is not applicable to the facts of the present case and is distinguishable. 7.1 So far as the disallowance of corpus donation is concerned, he submitted that the assessee has received corpus donation from 54 members @ ₹ 25,000/- each. The assessee has filed the affidavits of all these persons and the ld.CIT(A) has called for a remand report from the Assessing Officer. However, the ld.CIT(A) without admitting the additional evidences filed before him, sustained the addition made by the Assessing Officer which is not correct. He accordingly submitted that both the additions made by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find, before the CIT(A), the assessee had filed all the details and the ld.CIT(A) had called for a remand report from the Assessing Officer. The availability of funds with the assessee to the tune of ₹ 53 lakhs is not in dispute. It is also not the case of the Revenue that there is any misappropriation of funds since had there been any misappropriation of funds, the Assessing Officer would have disallowed the claim of exemption u/s 11/12 and 12A which has not been done in the instant case. Under these circumstances, we are of the considered opinion that the addition made by the Assessing Officer and sustained by the CIT(A) is not justified. However, since the allegation of the Assessing Officer is that the assessee had not given any bank statement of the subsequent year to substantiate that the amount had been refunded back, therefore, we restore the issue to the file of the Assessing Officer with a direction to verify the bank account of the assessee of the subsequent year and once the assessee proves that the amounts were, in fact, returned by those parties in subsequent year, the Assessing Officer is directed to delete the addition. 10.1 So ..... X X X X Extracts X X X X X X X X Extracts X X X X
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