THAKU BHOJWANI CHARITABLE TRUST,MUMBAI vs. INCOME TAX OFFICER (EXEMPTION), WARD 2(4), MUMBAI, MUMBAI

The brief facts of the case are that the assessee is a public charitable trust. For the AY 2023-24, the assessee filed its return of income declaring total income of Rs.1,74,480/-. The case was selected for scrutiny under CASS and the assessment was completed under Section 143(3) read with Section 144B of the Act vide order dated 28.01.2025. During the assessment proceedings, the Ld. AO observed that the assessee had shown corpus donations amounting to Rs.30,000/-. According to the Ld. AO, the assessee had failed to satisfactorily establish the identity and creditworthiness of the donors and genuineness of the transactions. The Ld. AO accordingly treated the corpus donation of Rs.30,000/- as income of the assessee. The Ld. AO further observed that the assessee had made an investment of Rs.10,00,000/- in a fixed/time deposit with HDFC Ltd. According to the Ld. AO, the said investment was not disclosed in the Balance Sheet and the source thereof was not satisfactorily explained. Accordingly, the Ld. AO treated the amount of Rs.10,00,000/- as unexplained investment under Section 69 of the Act and applied the provisions of Section 115BBE. Thus, the assessment was completed at total income of Rs.12,04,480/- after making, inter alia, the aforesaid additions of Rs.10,00,000/- and Rs.30,000/-. Being aggrieved, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), vide order dated 28.03.2026, upheld both the additions. In respect of the corpus donation, the Ld. CIT(A) observed that the assessee had failed to establish the identity and creditworthiness of the donors and genuineness of the transactions. Regarding the addition under Section 69, the Ld. CIT(A) observed that the assessee had failed to furnish proper reconciliation of the opening and closing balances of the fixed deposit and that the investment was not reflected in the Balance Sheet. Accordingly, the appeal of 2 the assessee was dismissed. Aggrieved by the impugned appellate order, the assessee is in appeal before us.

The Ld. AR submitted that the assessee has filed a paper book containing pages 1 to 65 and invited our attention to the documentary evidence placed therein. Regarding the addition of Rs.10,00,000/- under Section 69 of the Act, the Ld. AR contended that the revenue authorities had not correctly appreciated the accounts and supporting evidence of the assessee. The Ld. AR drew our attention to the Investment Ledger placed at APB page 37. It was further submitted that the Balance Sheet as at 31.03.2023, placed at APB page 31 to 36, duly reflects investments amounting to Rs.32,25,910.57. Thus, the observation of the revenue authorities that the investment was not reflected in the Balance Sheet is factually incorrect.

The Ld. AR further submitted that the fixed deposit of Rs.10,00,000/- was not a fresh unexplained investment made during the impugned assessment year. The relevant documentary evidence relating to the fixed deposit is placed at APB page 46. It was submitted that the amount of Rs.10,00,000/- had originally been invested with HDFC Ltd. on 12.03.2021 and the subsequent transaction represented continuation/renewal of the existing investment. Therefore, according to the Ld. AR, there was no unexplained investment during the year which could be brought to tax under Section 69 of the Act.

Regarding the addition of corpus donation of Rs.30,000/-, the Ld. AR submitted that the amount comprised donations of Rs.10,000/- each received from three donors, namely, Mr. Hira Thakrdas Bhojwani, Mr. Suresh Thakrdas Bhojwani and Mrs. Devika Thakrdas Bhojwani. The Ld. AR submitted that the donors are identifiable and have filed their respective returns of income. Their Gross Total Income, as reflected in their respective returns, was stated to be as under:

Per contra, the Ld. DR strongly relied upon the orders of the revenue authorities. The Ld. DR submitted that during the assessment proceedings the assessee had failed to satisfactorily explain the source of the fixed deposit of Rs.10,00,000/-. Mere production of a bank statement, without proper reconciliation and supporting evidence regarding the source of investment, would not discharge the onus cast upon the assessee under Section 69 of the Act.

Regarding the corpus donation of Rs.30,000/-, the Ld. DR submitted that the assessee had failed to furnish complete evidence before the Ld. AO to establish the identity and creditworthiness of the donors and genuineness of the transactions. The Ld. DR accordingly supported the findings of the Ld. CIT(A) and prayed that the additions be sustained.

We have heard the rival submissions and perused the material available on record, including the paper book filed by the assessee containing pages 1 to 65. The controversy before us, insofar as the present grounds are concerned, relates to the addition of Rs.10,00,000/- u/s 69 of the Act and the addition of corpus donation amounting to Rs.30,000/-. First, we take up the addition of Rs.10,00,000/- made under Section 69 of the Act. The principal basis for making and sustaining the addition is that the investment in the fixed deposit was not reflected in the Balance Sheet and its source remained unexplained. However, on perusal of the documentary evidence placed before us, we find that the Investment Ledger is available at APB page 37. Further, the Balance Sheet as at 31.03.2023, placed at APB page 33, reflects investments aggregating to Rs.32,25,910.57. Therefore, the observation that the assessee had not disclosed any such investment in its Balance Sheet does not accord with the material placed on record.

We further find from the documents referred to at APB page 46 that the fixed deposit of Rs.10,00,000/- with HDFC Ltd. traces back to an investment made on 12.03.2021. Thus, the material placed before us supports the contention of the assessee that the impugned amount did not represent a fresh investment made out of an unexplained source during the year under consideration, but related to an existing fixed-deposit investment. The Investment Ledger and Balance Sheet also support the existence and disclosure of investments in the books of account. Section 69 can be invoked where an investment made by an assessee is not recorded in the books of account, if any, maintained by the assessee and the assessee either offers no explanation about the nature and source of the investment or the explanation offered is not found satisfactory. In the present case, the documentary evidence placed in the paper book shows that the investment was reflected in the assessee's 5 accounts and the fixed deposit of Rs.10,00,000/- had its origin in an earlier investment. In these circumstances, the essential factual basis for treating the amount as an unexplained investment under Section 69 is not established. Accordingly, the addition of Rs.10,00,000/- made under Section 69 of the Act is deleted. Consequently, the application of Section 115BBE to the said addition does not survive.

Now we advert to the addition of Rs.30,000/-. The amount represents donations of Rs.10,000/- each received from three identified donors. The assessee has furnished the particulars and income-tax returns of the respective donors. The Gross Total Income reflected by Mr. Hira Thakrdas Bhojwani is Rs.48,47,910/-, by Mr. Suresh Thakrdas Bhojwani is Rs.1,47,00,890/- and by Mrs. Devika Thakrdas Bhojwani is Rs.14,62,500/-. Considering the quantum of Rs.10,000/- received from each donor vis-à-vis the income disclosed by them, the material placed on record sufficiently establishes their identity and financial capacity. There is also no material brought on record by the revenue to rebut these documentary evidences or to demonstrate that the donations emanated from any unexplained source of the assessee itself.

In view of the above facts and the evidence placed before us, we are unable to sustain the addition merely on the ground that the identity, creditworthiness and genuineness of the donors were not established. Accordingly, the addition of Rs.30,000/- is also deleted. So, the grounds of the assessee relating to the additions of Rs.10,00,000/- and Rs.30,000/- are deleted.

In the result, the appeal of the assessee bearing ITA No. 6166/Mum/2026 is allowed. Order pronounced in the open court on 19th day of August 2026 Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 19/08/2026 SAUMYA Sr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI