Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCHES : SMC-3 : NEW DELHI
Before: SHRI J. SUDHAKAR REDDY
This appeal filed by the assessee for the assessment year 2010-11 is directed against the order of the CIT(A) dated 30.3.2015.
The assessee is a Trust and is imparting education in the fields of engineering, pharmacy, business administration and hotel management.
The issue before me is whether the AO was right in making an addition of donations of Rs.30 lacs u/s 115BBC of the Act. The AO held that there is no doubt that the assessee is not in a position to explain the credit entries of Rs.30 lacs shown in the books of account as donations from M/s Ellora Buildtech Pvt. Ltd., Delhi and M/s Visit India Voyages Pvt. Ltd., Delhi. He held that bogus entries were shown as donations.
He further held that the donors were not found existing on the addresses given by the assessee. He records that there was no option left for the authorized representative of the assessee, but, to agree for this surrender of Rs.30 lacs with the request that no penal action would be taken against him. On appeal, the first appellate authority held that the addition cannot be made u/s 68 of the Act as he treated the donations as anonymous as the identity of the donors were not proved and held that the provisions of section 115BBC are attracted. Aggrieved, the assessee is before me.
The ld. counsel for the assessee submitted that section 115BBC is not applicable as the donations received was from two companies and cannot be held as anonymous. He relied on the decision of Delhi Bench ‘G’ of the ITAT in the case Sunder Deep Educational Society vs. Addl.CIT, AY 2007-08, Order dated 6.12.2013.
The ld. DR, on the other hand, submitted that the assessee could not prove the identity of the donor. He pointed out that both these companies were fictitious companies and, hence, the ld.CIT(A) was right in holding that section 115BBC applies. On a query from the Bench, the ld. counsel for the assessee submitted that the issue may be set aside to the file of the AO to enable him to demonstrate that the donations are not anonymous donations and that both these companies which have donated Rs.15 lac each are in existence.
After considering the rival contentions, I am of the considered view that one more opportunity may be given to the assessee to demonstrate that the donations in question are not anonymous donations.
In case the assessee fails to do so, the AO will be at liberty to make the addition in accordance with the law. 3
In the result, the appeal of the assessee is allowed for statistical purposes.
The order pronounced in the open court on 08.09.2016.