TaxTMI 
TaxTMI 
2012 (9) TMI 1037
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.... whose total income declared is very meager. The genuineness of such a huge donation from a meager income of donors is beyond human probability as per the ratio laid down by the Hon'ble Supreme Court in the case of Sumti Dayal Vs. CIT(1955) 125 CTR 124 and CIT Vs. P. Mohankala (2007) 210 CTR 20. 3. Ld. CIT(A) has erred in accepting the donations as genuine merely on the basis of bank entries ignoring the fact that the donors were having meager income as shown in their trading account submitted by the assessee by ignoring the decision of Hon'ble High Court of Chhattisgarh in the case of Kushal Prashad Manahar Vs. CIT (2010) 236 CTR 193. 4. Ld. CIT(A) has erred in law in relying on PAN and balance sheet filed by the assessee relating to the donors which are not sufficient in itself without supporting circumstantial evidences and ignoring the decision of Hon'ble Calcutta High Court in .CIT Vs. Precision Finance (P) Ltd. (1994) 208 ITR 465 wherein it was held that mere furnishing of particulars is not enough, mere payment by account payee cheques is not sacrosanct, nor can it make a non-genuine transaction genuine. 5. Ld. CIT(A) has failed to appr....
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....ti Institute of Technology. The return of income was filed on 31.10.2007 declaring nil income. The case was selected for scrutiny as per guidelines issued by CBDT. During assessment proceedings necessary details/explanation as called for by the Assessing Officer were submitted. The Assessing Officer during the assessment proceedings observed that assessee had accepted donations amounting to Rs. 1,80,87,000/- from 134 donors. The letters regarding calling for information u/s 133(6) were issued on 11.5.2009 in respect of donors having donated amount of Rs. 1 lakh and above in 25 cases. Out of the above 25 cases, 8 parties involving an amount of Rs. 18,00,000/- did not reply and five parties involving an amount of Rs. 13,00,000/- replied but the Assessing Officer observed that the reply was not complete. Therefore, the assessee was show cause vide notice dated 17.12.2009 wherein the assessee was appraised of the fact of having received incomplete information and or having received notice un-served. In view of the non compliance and part information available with Assessing Officer and in view of the fact that no donors were produced before Assessing Officer, the Assessing Officer harb....
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....of facts or opportunity to the assessee. c) That in any case the assessee applied the funds of the society including the donation received the benefit of application u/s 11 of the Act has to be considered and allowed. d) That in any case even if the issue of such donation is considered as unexplained, there is no case of any addition in the case of society in the absence of any finding that the same represent undisclosed income of the society. e) That Assessing Officer has computed the income on mechanical basis without considering the statutory benefit u/s 11 or taking into consideration excess of expenditure over income, the correctness of which is not disputed even by the Assessing Officer. f) That report of Valuation Cell is merely in the nature of estimate and same is of no evidentiary value. g) That contribution received with specific directions was part of corpus of the trust which were utilized for the purpose of construction of building and was not included in the receipt of trust. h) That during the year, the funds used in acquisition of fixed assets were Rs. 2,99,91,810/-. i) That out of total donation of Rs.....
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....eceived from two parties which was part of three parties discussed by the Ld CIT(A) therefore he had covered the major amounts to arrive at the conclusion. He further argued that the Ld CIT(A) had after obtaining remand report from Assessing Officer had considered all the facts and circumstances of the case and had rightly deleted the addition. He argued that even if the whole amount of Rs. 80 lakhs is considered as income of society even then taxable income of society will remain nil and the whole addition is of only academic nature. 13. As regards unexplained investment in building, the Ld AR submitted that Assessing Officer himself had allowed benefit of 50% and hence there remains very little difference. He submitted that complete books of accounts were maintained by the assessee and Assessing Officer had not found anything incriminating in the books of accounts and the Assessing Officer was not empowered to refer to Valuation Officer without finding any fault in the books of accounts. He further brought to our notice that in the next assessment year, the Assessing Officer had not made any addition on account of unexplained investment with respect to same building. Therefore....