Case Law Details

Case Name : M/s Saraswati Educational Charitable Trust Vs ITO (ITAT Lucknow)
Appeal Number : Tax (Appeal) No- ITA No 776/LKW/2014
Date of Judgement/Order : 17/06/2015
Related Assessment Year : 2010-11
Courts : All ITAT (5167) ITAT Lucknow (78)

Brief Facts of the case: Assessee was running a charitable educational trust and received anonymous donations amounting to Rs 1,66,30,000/-. Assessee had considered the same anonymous donations in its income and the same were applied for charitable purpose by the assessee.AO was of the opinion that that the above donations were uncounted money which has been routed through the charitable trust.

Assessee had produced the documents as required u/s 115BBC to be maintained by the assessee before the AO, but the AO did not consider the same on the basis that asseesee had not proved the creditworthiness of the donor ,he had just produced before him the identity of the donors So Ao had considered anonymous donations as unexplained cash credits u/s 68 .

Ld. CIT(A) considered the fact by taking into light the judgment of Humble high court in case of DIT(E) vs Keshav Social and charitable Foundation ,278 ITR 152 (Delhi) and may other that if the income had been taken into the income & expenditure account of the trust then the same cannot be treated as the unexplained cash credit and no addition can be made u/s 68 because the same was no more unexplained as the same has been take into account. So CIT(A) deleted the additions made by the AO

Contention of The Assessee/Respondent: Assessee was of the view by considering the judgment of CIT vs Uttranchal welfare society ,42 361,that the AO has disallowed the donation received from various persons and made addition u/s 68 considering the same to be unaccounted money ignoring the fact that all the receipts had already been taken to its income and the same was applied for charitable purposes.

Assessee had produced before the Ao the PAN card copy, their ITR’s,Copy of Bank statement ,financial statements ,their confirmations etc. Therefore the provisions of sec 115BC cannot be invoked .

Contention of Revenue/Appellant: Revenue was of the view that the assessee had received anonymous donations from various persons of which the assessee failed to produce the documents proving the credit worthiness of the donor.So the assessee has violated the provisions of sec 115BC because as per sec 115BC relevant documents has to be maintained by the assessee if anonymous donations has been received .So the same remained unexplained and the same has to be added back as per sec 68 as unexplained cash credit .

Held by respective court: Respective court was of the view that section 68 has no application because the same had already been taken in income of the assessee so it no where remains undisclosed. Moreover the assessee has duly discharged its onus to prove the credit worthiness of the donor by giving the list of the same and the financial statements, PAN card copy, their ITR’s ,etc .

Ao has made its opinion just by mere suspicion without conducting proper enquiries and bringing proper material on record whereas the asseessee has furnished full details and documents of the donor to prove the genuineness of the donation.

So neither sec 115BC can be invoked because the assessee has produced all relevant documents required to prove the creditworthiness and genuineness of the donations nor addition under sec 68 can be made because the assessee has already taken the same in to its income and had applied for charitable purposes.

Appeal of the revenue stands dismissed.

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Category : Income Tax (27493)
Type : Judiciary (11690)
Tags : ITAT Judgments (5351) Rishabh Mehra (100) Section 68 (214)

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