DCIT Vs Santosh Trust (ITAT Delhi)
ITAT Delhi Upholds CIT(A)’s Relief to Santosh Trust – Cash Deposits During Demonetisation Cannot be Treated as Unexplained Money
ITAT Delhi Upholds CIT(A)’s Relief to Santosh Trust – Cash Deposits During Demonetisation Cannot be Treated as Unexplained Money Delhi Tribunal dismissed Revenue’s appeal & sustained the deletion of addition of ₹39.83 crore made u/s 69A r.w.s. 115BBE in respect of cash deposits during demonetisation.
Assessee, a charitable trust registered u/s 12A & also approved u/s 80G, runs Santosh Medical College, Santosh Dental College & Hospital at Ghaziabad. It had deposited ₹39.83 crore in old currency notes during 09.11.2016–30.12.2016. AO held that there was an abnormal spike in cash deposits compared to earlier years & treated the same as unexplained money. CIT(A), however, accepted assessee’s explanation that the deposits were out of regular fee collections from students & receipts from hospital & pharmacy, duly recorded in books, & deleted the addition.
On appeal, Revenue contended that no corroborative evidence was furnished & that the spike indicated unaccounted income. Assessee submitted that it had a consistent practice of holding large cash balances due to fear of bank account attachments in view of pending tax liabilities, which was also evidenced by prior years’ assessments where this practice was accepted. It relied on judicial precedents including CIT(E) Vs Keshav Social & Charitable Foundation (Del HC) & Tiruppani Trust Vs CIT (SC), holding that once income is disclosed in books & applied for charitable purposes, sections 68/69/69A cannot be invoked.
