Rana Ayyub Shaikh Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that since donations collected were parked in savings bank account of assessee and funds were used for personal purpose hence donation collected are taxable u/s. 56(2)(x) of the Income Tax Act. Accordingly, appeal of the assessee dismissed.
Facts- The solitary ground raised by the assessee is that CIT(A) was not justified in confirming the view of the AO that the donations of Rs. 1,94,82,506/- received for Covid relief were taxable as the income of the assessee u/s 56(2)(x) of the Income Tax Act.
Conclusion- Held that the donations collected were not just for Covid relief but also for other so-called purposes like funds for slum dwellers and farmers as also for relief work in different states for different purposes. But all the donations collected were parked in the savings bank account of the assessee and family members and no separate accounts were maintained. The funds were also used for personal purposes and also for investment in FDR and substantial amount of donation received remained un-utilized in spite of long time gap. The claim that the end use of these funds was initiated for charitable activities remains unproved. The manner in which the funds were collected, is also not understandable as the donations were collected and parked in the bank accounts of the relatives of the assessee. On the given facts, the donations collected by the assessee are taxable u/s 56(2)(x) of the Act and orders of the authorities below on this count cannot be faulted with.
