TaxTMI 
TaxTMI 
2024 (10) TMI 71
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....aid down under said sub section have been complied by the appellant. 2. Without prejudice to the above, the Id learned CIT Appeal erred both in law and on facts in confirming an addition of Rs. 15,12,601/- on account of alleged unexplained cash credit under section 69A. The addition is confirmed by Hon. CIT(A) not accepting the submission made during the course of appeal proceeding. 3. Appellant Craves leave to add, alter or amend any of the grounds of Appeal mentioned above, either at or before the time of hearing." Facts of the Case: 3. The assessee is a charitable trust registered under the Bombay Public Trust Act, 1950, established primarily for providing education. The assessee is running a school in the name "Ideal School." For the AY 2011-12, the assessee did not file the original return of income. Later on, notice u/s.148 of the Act was issued to the assessee, after recording the reasons for reopening and the assessee filed its return of income on 27.08.2018, in response to a notice issued u/s.48 of the Act, declaring total income of Rs.21,530/-. Notices under section 143(2) and 142(1) of the Act were issued to the assessee and those notices were com....
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....e of Rs. 4,79,803/-. Copies of their income tax returns, and profit & loss accounts were submitted for verification. 6. The assessee trust did not file a return of income as its surplus of Rs.21,531/- was below the taxable limit. 7. The case was reopened under Section 148 of the Income Tax Act, 1961, on account of cash deposits of Rs.72,73,050/- reported in the Annual Information Return (AIR), which were attributed to the trust based on its PAN linked to the bank account. The assessee submitted that the cash deposits in question did not exclusively belong to the trust but also included funds from Ideal Hostel and Naman Hostel. 8. The assessee trust is not registered under Section 12AA of the Income Tax Act, 1961, and, therefore, its status is considered as "AOP" (Association of Persons) rather than "AOP Trust." 9. A student-wise list of fees collected by the trust and both hostels was furnished, along with supporting evidence. 10. In response to the auditor's observation that no receipts were issued for fees and fines, the assessee clarified that the fee register was maintained in digital form and had been made available during the audit....
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....0/- as unexplained cash/cheque credit under section 69A of the Act, adding it to the total income of the assessee. (iv) Cash Deposit of Rs.38,107/-:- The assessee explained that Rs.38,107/- was out of a cash withdrawal that was subsequently deposited into the bank account. However, the assessee did not provide any documentary evidence to support this claim. In the absence of such evidence, the AO did not accept the explanation and treated the amount of Rs.38,107/- as unexplained cash/cheque credit under section 69A of the Act, adding it to the total income of the assessee. 3.2.2. Based on the above findings, the AO concluded that the assessee had fabricated data to reconcile the difference of Rs.15,12,601/- between the cash/cheque deposited in the bank account and the corresponding entries. Accordingly, a total sum of Rs.14,84,248/- (Rs.10,46,141/- + Rs.4,00,000/- + Rs.38,107/-) was treated as unexplained cash/cheque credit under section 69A of the Act, and added to the total income of the assessee. In addition, the interest income of Rs.28,353/- was also added, making a cumulative addition of Rs.15,12,601/-. 3.3. In response to the show-cause notice dated 22.11.2018, the ....
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....count, thereby substantiating the assessee's claim that the income in question was rightly reflected in the ITR of Shri Thakorbhai Patel. The Ld.CIT(A) concluded that the addition made by the AO in the hands of the assessee was unwarranted and unjustified, as the income had already been accounted for in the ITR of the rightful owner, Shri Thakorbhai Patel. The Ld.CIT(A) also addressed the AO's disallowance of expenses related to the hostel fees. It was found that the AO did not bring forth any specific facts or reasons for disallowing the expenses connected to the hostel income. In the absence of any such justification, the Ld.CIT(A) held that the disallowance was not legally sustainable, as the income and related expenses should ordinarily be assessed together unless specific grounds for disallowance are established. Moreover, the Ld.CIT(A) observed that the AO had accepted the disclosure of hostel fees in the hands of Smt. Shakuntalben Patel in respect of Naman Hostel. Therefore, when it is established that the hostel fees for IDEAL Hostel were duly reported in the ITR of Shri Thakorbhai Patel, there was no justifiable reason for the AO to reject the assessee's claim. Sin....
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.... to. As observed from the Trust Deed, one of the initial trustees is Shri Kalpitkumar Thakorbhai Patel and the receipts relating to Ideal Hostel are attributable to Shri Thankorbhai Manubhai Patel. The Ld.AR could not explain the relationship and arrangements between trust and such persons. 8.1. In our considered opinion, the cash deposited in the Bank Account of Trust must be accounted for in the books of Trust and the surplus/profit should have been taxed in the hands of assessee in absence of any express agreement between Trust and such persons in whose hands the receipts and corresponding income is taxed. It is also not clear that in whose names the Receipts of cash deposits are issued. Accepting the income (relating to cash deposits in the bank account of trust) in the hands of persons who have declared as income is not supported by any documentation except the return of income filed by those persons. 8.2. We also note that the Ld.CIT(A) has not decided on the first ground of assessee, relating to exemption u/s.10(23C)(iiiad) of the Act in both the appeals before him and before us. It is also observed that the assessee is granted registration u/s.12AA of the Act with eff....