DCIT Vs Kolar Paper Mills Ltd. (ITAT Mumbai)
Kolar Paper Mills Succeeds – Tribunal Deletes ₹49 Lakh 69A Addition on Donation
Kolar Paper Mills Succeeds – Tribunal Deletes ₹49 Lakh 69A Addition on Donation- CSR Donation Already Disallowed, No Double Tax- AO Cannot Rely Solely on Third-Party Statement – CSR Donation Not Unexplained Money – Tribunal Upholds CIT(A) Relief
Revenue filed appeal against CIT(A)’s order dated 23.12.2024 deleting additions made by AO u/s 69A & 69C.
Assessee had filed return declaring income of ₹38.56 crore. A search u/s 132 was conducted on certain charitable organisations including Aadhar Foundation. Its trustee admitted in statement u/s 132(4) that donations were bogus & amounts were returned in cash/RTGS with commission. AO, relying on this, treated donation of ₹49,00,000 by Assessee to Aadhar Foundation as unexplained money u/s 69A r.w.s. 115BBE & added commission of ₹12,250 u/s 69C.
On appeal, Assessee pointed out that the said sum was already disallowed in computation as CSR expenditure, no claim u/s 80G was made, & therefore AO’s addition resulted in double taxation. All payments were through banking channels & supported by receipts. AO had made addition merely on third-party information without independent verification or opportunity of cross-examination. CIT(A) accepted this plea, relying on SC in Odeon Builders Pvt. Ltd. (2019) 110 taxmann.com 64, & directed deletion of both additions.
