Appeal allowed by ITAT, deletion of bogus donation addition, lack of concrete evidence, speculation rejected

The ITAT allowed the assessee's appeal, ruling in favor of the assessee and deleting the addition of the donation amount deemed bogus by the Commissioner of Income Tax Appeals. The ITAT found that the addition lacked concrete evidence and was based on speculation, ultimately setting aside the lower authorities' orders.

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Issues:
Appeal against addition of donation as bogus.

Analysis:
The case involved appeals by the assessee against orders of the Commissioner of Income Tax Appeals for assessment years 2013-14 and 2014-15, where an addition of Rs. 500,000 each as donation was deemed bogus. The background revealed a survey action under section 132 of the Income Tax Act on a charitable trust, which was found to be booking bogus expenditure. The assessee had made a donation to this trust, leading to the reopening of the assessment. The assessing officer, relying on findings regarding the trust, added the donation amount to the assessee's income. The Commissioner of Income Tax Appeals upheld this addition, prompting the assessee to appeal to the ITAT.

During the ITAT proceedings, the main issue was the challenge to the addition of Rs. 500,000 donation to the charitable trust, as it was suspected to have been received clandestinely due to the trust's dubious financial activities. The ITAT noted that the assessee had submitted donation receipts and made payments through banking channels, with no evidence of receiving the amount back from the trust. The ITAT concluded that the addition was based on speculation and not supported by concrete evidence, leading to the decision to set aside the lower authorities' orders and delete the addition.

Ultimately, the ITAT allowed the assessee's appeal, ruling in favor of the assessee and deleting the addition of the donation amount. The judgment was pronounced on 12.6.2019.

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