ACIT, MEERUT vs. M/S. KASTOORI DEVI FOUNDATION, MEERUT

This appeal filed by the Revenue is directed against the order of the CIT(A)-Meerut, dated 20/07/2012 passed in first appeal No. 273/11-12 for A.Y 2009-10.

The Revenue has raised the following grounds of appeal:

Ground Nos. 1 and 2 involve same issue. Hence these are being taken up for adjudication together.

Briefly stated, the facts as emanating from the orders of the authorities below are that during the course of assessment proceedings, the AO noticed that donations amounting to Rs. 68,77,206/- were received by the assessee. The AO issued notices u/s 133(6) of the Income-tax Act, 1961 [hereinafter referred to as, ‘the Act’] to all the 55 donors. Confirmation was received from 11 donors amounting to Rs. 3,09,701/-, but these persons did not file the copy of bank account or copy of ITR. Notices issued u/s 133(6) of the Act to 11 other persons amounting to Rs. 4,34,000/- were returned back with the remarks incomplete address’. 28 donors did not confirm the amount of Rs. 35,33,000/- as having been donated by them. Not satisfied with the explanation tendered by the assessee, the AO held those donations to be ingenuine and accordingly the donation of Rs. 42,76,701/- was added to the total income of the assessee as unexplained cash credits u/s 68 of the Act.

Aggrieved, the assessee went in appeal before the ld. CIT(A) against this addition made by the AO and made various submissions. The ld. CIT(A), after considering the submissions of the ld. AR, arrived at the following conclusion: “I have gone through the order of AO as well as the remand report sent by AO and considered the written submissions, paper book, rejoinders and arguments of the AR carefully. I have also gone through the case laws referred to by the AR. I find that the appellant had disclosed the donation of Rs.68,77,206/- as its income. There was thus full disclosure of income, and the section 68 of the Income-tax Act, 1961 had no application on the facts of the case of appellant, because the appellant had in fact disclosed the donation of Rs.68,77,206/- as its income. In the remand report, the AO has not commented anything on the plethora of evidences/written submissions/case laws submitted by the AR. The appellant has kept complete details of donors such as name, address, PANos., etc. The AR also relied on the provisions of sections 11 of the Income- tax Act. In his submissions, he stated that the trust was granted the exemption u/s 12A and 80G of the Income-tax Act. The Trust received the funds and used as per law. A certificate of M/s V.K. Rekhi & Associates, Chartered Accountants was filed wherein it is certified that the trust has utilized more than 99% of the receipts towards the objects of the Trust and thereby complied with the basic requirements of section 11(2) of the Income-tax Act.

Before us, the both the rival representatives reiterated their stand taken before the authorities below. The ld. DR relied on the orders of the assessing authority and submitted that the ld. CIT(A) was not justified in giving relief to the assessee. On the other hand, the ld. AR relied on the order the ld. CIT(A) and his submissions made before him.

Having heard the rival submissions and perused the relevant material available on record, we find that when the donors’ details and genuineness of the donations was established by way of filing sufficient evidence on record, then these donations cannot be held as anonymous donations and thus the provisions of section 115BBC of ht Act can be applied. Moreover, when 85% of the amount of donations received was utilize for the purpose and objects of the trust, then no disallowance can be made. Accordingly, finding no merit in the submissions of the ld. DR, we dismiss Ground Nos. 1 and 2 raised by the Revenue.

Coming to Ground No. 3, the brief facts are that during the course of assessment proceedings, it was noticed by the AO that the assessee had received unsecured loan from the following parties:

Before us also, the rival representatives reiterated the submissions made before the authorities below.

We have heard the rival submissions and have perused the relevant material on record. We find that the ld. CIT(A) has gone through the order of the AO and after considering the written submissions, arguments of both the sides and case laws cited by the AO and the ld. AR came to the conclusion that the AO himself in the remand report has stated that the details as required have been file and he has also stated that he has nothing else to state in the matter of unsecured loans. The AO has thus accepted the unsecured loans. Accordingly the AO deleted the addition of Rs. 32,70,000/-. We also find no infirmity in the finding of the ld. CIT(A) which is quite justified. In the absence of any merits in the ground of appeal raised by the Revenue, we dismiss ground No. 3.

In the result, the appeal of the Revenue stands dismissed. The order is pronounced in the open court on 07.01.2016.