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Facts
The Revenue preferred an appeal against the order of the CIT(A) that deleted an addition of Rs. 1,99,25,000/- for unexplained cash credit. The Revenue also questioned the allowance of fabrication charges. The assessee, a charitable society, received voluntary and corpus donations. The Assessing Officer added the donations as unexplained cash credits and disallowed fabrication charges.
Held
The Tribunal found that the CIT(A) had correctly noted that the assessee had furnished details of donors, including PAN and ITR, and thus the provisions for anonymous donations were not applicable. Regarding fabrication charges, the Tribunal noted that the CIT(A) had found that the purchase of buses and payment for fabrication were substantiated and the disallowance was made solely due to a mismatch in the name on the TDS certificate.
Key Issues
Whether the CIT(A) erred in deleting the addition for unexplained cash credit and in allowing fabrication charges.
Sections Cited
68, 115BBE(1)(a), 194C, 115BBC
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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI YOGESH KUMAR US, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the Revenue is preferred against the order of the CIT(A)-40, Delhi dated 01.08.2019 pertaining to A.Y 2015-16.
The grievances raised by the Revenue read as under:
[A.Y 2015-16] DCIT Vs. Guru Gobind Singh Edu. Charitable Trust “1. Whether on the facts and circumstances of the case, the CIT(A) erred in deleting the addition of Rs.1,99,25,000/- for unexplained cash credit while the assessee was unable to prove genuineness, authenticity and creditworthiness of het donors and to produce any of the individual donors during the assessment proceedings.
On the facts and circumstances of the case, the Ld. CIT(A) is justified in allowing the fabrication charges while the assessee was unable to establish the connection between Neo Bus Technology and name of TDS Certificate.”
Brief facts of the case are that the assessee society is registered u/s 12A of the Income tax Act dated 28.12.2007 also registered u/s- 80G(5)(vi) vide order dated 28.01.2010. The society is establishing a center for higher studies in Sikhism and other ancient/traditional sciences along with the advanced and higher studies in modern disciplines. The assessee runs and maintains a University under the name and style of M/s SGT Institute of Engineering & Technology at Gurgaon, Haryana. The assessee has filed its return for the A.Y. 2015-16 on 28.09.2015 disclosing NIL income.
During the year under consideration, the assessee had received total voluntary contribution of Rs. 4,69,31,000/- as per
Page 2 of 8 [A.Y 2015-16] DCIT Vs. Guru Gobind Singh Edu. Charitable Trust income and expenditure a/c and corpus of Rs. 2,80,00,000/- as per the Balance Sheet. In order to verify the identity, genuineness and creditworthiness of these donations, notices u/s 133(6) of the Act dated 20.11.2017 was issued to 28 out of 95 voluntary donors and 3 out of the 7 corpus donors, to verify the identity of the donor, genuineness of the transaction and creditworthiness or financial strength of the donors on sample basis, seeking their reply.
The Assessing Officer received only part confirmations in reply to the notices u/s 133(6) of the Act and considering that non- response of the donors does not explain the donations satisfactorily, the Assessing Officer held the receipts in the form of voluntary and corpus donations, from 12 parties, to be unexplained cash credits in the books of the assessee and added the same u/s 68 of the Act. Accordingly, the AO taxed the amount of Rs.
1,99,25,000/- u/s 115BBE(1)(a) @ 30%.
The AO further added an expense of Rs 24,46,875/- as fabrication charges for three buses purchased from Neo Bus Technology.
Page 3 of 8 [A.Y 2015-16] DCIT Vs. Guru Gobind Singh Edu. Charitable Trust 8. Aggrieved, the assessee went in appeal before the ld. CIT(A) and was successful. Now the Revenue is in appeal before us against the action of the Assessing Officer.
Before us, the ld. counsel for the assessee relied on the orders of the ld. CIT(A) whereas the Assessing Officer relied on the orders of the Assessing Officer.
We have heard the rival submissions and have perused the relevant material on record. With respect to ground 1, we find that the ld. CIT(A) has given a categorical finding that the details of the donors along with names and addresses were furnished before the Assessing Officer along with copies of ITR, PAN and confirmations and it cannot be said that details of names and addresses were not maintained. The CIT(A) held therefore that the provisions of section 115BBC are not applicable which in any case was accepted by the AO as he has not invoked section 115BBC of the Act. The ld. CIT(A)
further noted that the assessee has shown an application of Rs.
13,94,31,285/- for charitable purposes, both on revenue and capital account, which has been allowed by the AO except expenses of Rs. 24,46,875/- and the said amount is far more than the income,
Page 4 of 8
Following the decision of hon’ble Delhi Court in the case of Keshav Social and Charitable Foundation (2005) 278 ITR 152 (Del)
the ld. CIT(A) held that the invoking of section 68 of the Act cannot be upheld. Since details of names and addresses have been maintained along with details of PAN and copies of ITR and confirmations have been furnished, the said amount can also not be considered as anonymous donation within the purview of section 115BBC of the Act. Therefore, the addition of Rs. 1,99,25,000/- made u/s 68 was deleted.
Having perused the order of the ld. CIT(A), we find no reason to interfere with the findings of the ld. CIT(A). We, therefore, uphold his order and direct the Assessing Officer to delete the addition made u/s 68 amounting to Rs. 1,99,25,000/-. Ground 1 is dismissed.
With respect to the fabrication charges in ground 2, we find that the CIT(A) found that the AO has not disputed the purchase of Page 5 of 8
4.2.1 From the details pertaining to addition to vehicles it was noted that the assessee had purchased three vehicles against which fabrication charges of Rs. 8,15,625/- for each bus had been claimed to have been paid to Neo Bus Technology. On being asked to produce the bills/vouchers, it was submitted the bills were not traceable and that the fabrication charges were covered under section 194C and tax had been deducted at source for which Form no. 16A was furnished. Since the Form no. 16A filed by the assessee was in the name of Ms. Alka Gupta bearing a New Delhi address and the fabrication charges were from Neo Bus Technology and also in view of the fact that the assessee failed to establish the connection between Ms. Alka Gupta and Neo Bus Technology, the amount of Rs. 24,46,875/- was not allowed as application of income. The appellant has submitted that Ms. Alka Gupta is the proprietor of Neo Bus Technology and tax was deducted at source under the PAN of Ms. Alka Gupta. Copy of work order and commercial terms issued in favour of Neo Bus Technology and bank statement evidencing payment made to Neo Bus Technology have also been submitted.
4.2.2 I have considered the assessment order and the submissions of the appellant. From the assessment order it is apparent that the purchase of buses from Himgiri Automobiles Private Limited is not in doubt. The only reason why disallowance has been made is because the assessee could not establish the connection between Ms. Alka Gupta, whose name the TDS certificate was issued regarding deduction tax at source on fabrication charges paid. The appellant has contended that Ms. Alka Gupta is the proprietor of Neo Bus technology and hence the TDS certificate was issue in the name of the PAN holder who was also the proprietor of Neo Bus technology. The fact that the expenditure was incurred, and payment was made is borne out of the bank statements, copies of which have been furnished. The Assessing Officer has not doubted the purchase of buses or the fact that fabrication charges were paid for the bus. The expenditure incurred has not been allowed as application only because the name on the TDS certificate did not match the name of the concern through which the fabrication was done.
4.2.3 In view of the discussion above and in view of the fact that the expenditure incurred is substantiated by Form 16A regarding fabrication charges paid and the payment made is reflected in the bank statement, the addition made is deleted. Ground of appeal No. 4 is allowed.
Page 6 of 8 [A.Y 2015-16] DCIT Vs. Guru Gobind Singh Edu. Charitable Trust 14. Having perused the order of the ld. CIT(A), we find no reason to interfere with the findings of the ld. CIT(A). We, therefore, uphold his order and direct the Assessing Officer to delete the addition made on account of fabrication charges. Ground 2 is dismissed.
The order is pronounced in the open court on 21.01.2026.
Sd/- Sd/- [YOGESH KUMAR U.S.] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 21st JANUARY, 2025.
VL/