Mahayana Theravada Vajrayana Buddhist Religious and Charitable Trust Vs ACIT (ITAT Delhi)
Additions on Alleged Bogus Loans & Donations Deleted – Sanction Defect Vitiates Reopening Beyond 4 Years: ITAT Delhi
Delhi ITAT dealt with three appeals concerning additions made on account of unsecured loans & donations alleged to be accommodation entries.
AY 2013-14
The reassessment was initiated u/s 147 on the basis of information that Trust had taken an accommodation entry of ₹6 lakh from one Shri Hans Kumar. AO treated it as unexplained cash credit u/s 68 which was confirmed by CIT(A). Before Tribunal, Assessee demonstrated identity of lender, loan received through banking channel, interest payment & creditworthiness (Hans Kumar’s returned income exceeded loan advanced). Tribunal observed that AO himself had accepted loans from the same party in AY 2014-15. Hence, addition of ₹6 lakh was held unsustainable & deleted.
AY 2014-15
AO reopened assessment on allegation that ₹82 lakh received from M/s Kherapati Vinimay Pvt. Ltd. was accommodation entry. Addition u/s 69 was made & confirmed by CIT(A). Tribunal found that amount was duly recorded as donation in income & expenditure account. Importantly, no show cause notice was issued regarding this donation. Addition was made without confronting Assessee, violating principles of natural justice. Tribunal held that addition cannot be sustained when issue was not part of show cause. The ₹81 lakh addition was deleted.
