ACIT (Exemption) Vs Ramkrishna Seva Mandal Anand (ITAT Ahmedabad)
Ad-hoc Disallowance of Trust Expenditure Set Aside: ITAT Ahmedabad Upholds Deletion of 10% Expense Addition
The Ahmedabad Bench of the ITAT dismissed the Revenue’s appeal and upheld the order of the CIT(A) deleting an ad-hoc disallowance of ₹3.96 crore (10% of total expenses) made in the case of Shree Ramkrishna Seva Mandal for AY 2023-24. The assessee, a charitable trust registered under section 12A and engaged in managing 35 educational institutions, had disclosed consolidated income and expenditure of all units.
The Tribunal noted that the assessee produced extensive documentary evidence to substantiate application of income, including audited accounts, unit-wise break-up of expenses, salary registers and ledgers, cash and bank books, and details of grants-in-aid. Of the total expenditure of ₹39.69 crore, capital expenditure of ₹9.20 crore was not disputed, and a substantial portion of the balance related to staff salaries duly supported by records.
It was held that the Assessing Officer made a lump-sum 10% disallowance without pointing out any specific defect or infirmity in the evidence furnished. Once the assessee discharged its onus by producing complete documentation, the burden shifted to the AO to identify concrete shortcomings, which was not done. Accordingly, the ad-hoc disallowance was found unsustainable, and the Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
