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TMI Blog2018 (7) TMI 2336X X X X Extracts X X X X X X X X Extracts X X X X ..... rate entities and their return before the Registrar of the Companies. Hence the conditions which have been laid down in sub section 3 and onus which is cast upon the person receiving the donation has been fully discharged. The entire case of the AO is that the donation received by the assessee trust by these companies were in fact were operated by accommodation entry providers and they do not have much income and the bank statement revealed that the amounts even come in their bank account from various bank accounts which has been inferred by the AO that assessee must have routed its unaccounted money through various donors in order to get donation. Such observation perhaps would have been relevant if the same would have been scrutinised u/s 68. Here the provision clearly states only the anonymous donation should be taxed and if the donations have been come from known sources, then it cannot be treated as anonymous donations, therefore, the Ld. CIT(A) has rightly held that the donation received by the assessee cannot be taxed u/s 115BBC(I) . The other observation of the Ld. CIT (A) was that AO is justified for making such addition u/s 68, however still the assessee will get ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rs. 7,00,000/- (v) Radha Madhav Agrotech (P) Ltd. Rs. 25,00,000/- Rs. 21,00,000/- (vi) S.K.M India (P) Ltd. Rs. 15,00,000/- (vii) Anupam Buildmart (P) Ltd. Rs. 11,00,000/- (viii) Sapphire Commercials (P) Ltd. Rs. 31,00,000/- (ix) Zoom Building Material (P) Ltd. Rs. 25,00,000/- Rs. 6,00,000/- Total amount of above donations Rs. 2,05,00,000/- 3. Ld. AO carried out inquires to find out whether the donations were anonymous or not in terms of section 115BBC. In response to the show cause notice the assessee has filed confirmation from all the above companies alongwith the other requisite details like balance sheet, profit and loss account and copy of income tax returns etc. However the AO required the assessee to produce the Directors of all the companies which assessee could not produce. Thereafter summons u/s 131 were issued to the Directors and Inspector of Income Tax was also deputed to serve the summons. However, as noted by the AO, the ITI could not serve the summons on any of these companies as they were not found to be functioning at the given addresses. When confronted with this fact, the assessee provided new addresses of some of the companies and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions of the assessee that the AO is not justified to invoke the provision of section 115BBC(1) as all the relevant details and documents of the donors were submitted before the AO and as such the same cannot be treated as anonymous donation and as such the AO is not justified to make the addition u/s 115BBC(1) 4.5 However, since the AO had made the necessary enquiries and the whereabouts of the donors could not be confirmed by the AO during the course of assessment proceedings and as such the AO will be justified to make the addition u/s 68 as the explanation of the assessee is not satisfactory but at the same time the assessee will be eligible for exemption u/s 11(1) as the income has been applied for charitable purposes and this view is supported by the cases relied on by the assessee. 4.6 After considering all the facts and circumstances of the case, I am of the view that the addition made by the AO is justified and is confirmed u/s 68 only but at the same time the assessee will be eligible for exemption u/s 11(1) as the same has been applied for charitable purposes and as such the appeal of the assessee is allowed partly. 5. Before us, Ld. Sr. DR submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n section 11, includes any income by way of any anonymous donation, the income-tax payable shall be the aggregate of (i) the amount of income-tax calculated on the income by way of any anonymous donation, at the rate of thirty per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i). [The following clauses (i) and (ii) shall be substituted for the existing clauses (i) and (ii) of sub-section (1) of section 115BBC by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010:] (i) the amount of income-tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of the higher of the following, namely: (A) five per cent of the total donations received by the assessee; or (B) one lakh rupees; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received. (2) The provisions of sub-section (1) shall not apply to any anonymous donation received by (a) any trust or institution c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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