TaxTMI 
TaxTMI 
2025 (8) TMI 1018
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....s on facts in sustaining the addition of Rs. 43,00,000/- out of total addition of Rs. 85,25,200/- made on account of amounts received towards the corpus fund treating the same to anonymous donations u/s 115BBC which is arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax (Appeals) has further erred in sustaining addition of Rs. 8,85,00,000/- out of total addition of Rs. 29,08,41,007/- made on account of alleged unexplained unsecured loans treating the same to anonymous donations u/s 115BBC in utter disregard of the explanations rendered which is arbitrary and unjustified. 4. That the Ld. Commissioner of Income Tax (Appeals) has further erred in sustaining addition of Rs. 58,96,441/- out of total addition of Rs. 68,90,724/- made on account of alleged unexplained liabilities applying the provisions of Section 68 which is arbitrary and unjustified. 5. That the Ld. Commissioner of Income Tax (Appeals) has further erred upholding the action of Assessing Officer wherein he denied the benefit of Section 11 and 12 of the Act in utter disregard of the explanations rendered and as such the order passed is illegal, arbitrary and unjustified. ....
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....e of assessment proceedings, the AO on examination of balance sheet and Income & Expenditure Account observed that the assessee has received corpus fund amounting to Rs. 85,25,200/- and unsecured loans of Rs. 29,08,41,007/-. 7.2 As per the AO, though the assessee furnished the name of the persons but the assessee has not filed any confirmation from the persons who have contributed towards the corpus funds. And as regards the unsecured loans raised by the assessee, it has neither furnished the details of the persons nor the confirmation from the said persons. Accordingly the identity and genuineness of the corpus funds and unsecured loans could not be established. As per the AO, the assessee is an institution referred to in Section 11 being one that has been granted registration under section 12A of the Act and in absence of verification, the corpus funds and unsecured loans shown in the balance sheet takes the form of anonymous donation and liable to be taxed under the provisions of Section 115BBC of the Act. Thereafter referring to the provisions of Section 115BBC of the Act, the AO held that since the assessee did not produce the record of the identity of persons making such c....
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....ived by the appellant during the year as unsecured loan. No details in support of the same were filed during the assessment proceedings. The provisions of Sec 115BBC of the Act relate to the anonymous donation received by any trust or institution created for religious and charitable purpose. Sec 115BBC(3] has defined anonymous donation as any voluntary contribution referred to in sub clause (iia) of clause (24) of Sec 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed. With regard to additional evidence filed in support of the same during appellate proceedings, report was called from the AO. The AO in the remand report after considering the submission of the appellant as reproduced at Pg. 16-20 of this appellate order has discussed the evidence filed in support of each party from whom unsecured loan has been received and has found loans amounting Rs. 20,23,41,007 as acceptable. These mainly rela....
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....t maintained the particulars of the persons providing the unsecured loans but has also submitted the requisite particulars to the AO during the Remand proceedings and inspite of that the addition have been sustained by the Ld. CIT(A) and the relevant extract of the Remand Report read as under: "9. On the basis of details furnished and on the test of abovementioned criteria, comments in respect of the unsecured loans are offered in ensuing paragraphs 1.... 2.... 3.... 4. Amarnath Industries Pvt. Ltd. As per the Balance Sheet as on 31/03/2009, the assessee has shown taken loan of Rs. 78,00,000/- from the said Company. As per the details furnished, the said company is having PAN AALFA2995D The transaction has been confirmed however bank statement & details of the AO, Balance Sheet etc has not been enclosed. In view of the details furnished, the loan shown in the name of the said person cannot be considered as explained. 5.... 6. International Eletron Devices Ltd. As per the Balance Sheet as on 31/03/2009, the assessee has shown taken loan of Rs. 8,00,00,000/- from the said Company. As per the det....
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....nfirmation of advancing the funds to the assessee. Similarly, in respect of International Eletron Devices Ltd. from whom the assessee has taken loan of Rs. 8,00,00,000/-, its name, address, the PAN particulars have been duly furnished and besides that, the said company has also submitted the confirmation of advancing the funds to the assessee. Similar, in respect of Real Gas and Chemicals Pvt Ltd from whom the assessee has taken loan of Rs. 5,00,000/- and in respect of Xpert Distributors Pvt Ltd from whom the assessee has taken loan of Rs 2,00,000/-, their name, address, the PAN particulars have been duly furnished and besides that, these companies have also submitted the confirmation of advancing the funds to the assessee. It was submitted that the AO is himself accepting the said fact in the remand report that the assessee has provided the name and address, PAN and confirmation of these persons therefore in such circumstances, how can the unsecured loans be called as anonymous donation and provision of Section 115BBC of the Act be invoked and the additions sustained by the ld CIT(A). It was submitted that the ld CIT(A) has merely gone by the remand report and even as per the rema....
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....ons therefore in such circumstances, how can the donation be called as anonymous donation and provision of Section 115BBC of the Act be invoked. Further our reference was drawn to the details of the donation so received which is contained at page 193 of the assessee's paper book and the contents thereof reads as under: 15. It was submitted that as evident from the above details in respect of the addition sustained by the ld CIT(A) to the extent of Rs. 43,00,000/-, the assessee has provided the necessary details in terms of name, address and PAN of the persons making the donation and mode of payment which is through cheque towards the corpus fund. It was submitted that in respect of Shri Sanjay Singla who has donated an amount of Rs. 1,00,000/- as well as 10,00,000/- vide through separate cheque, his confirmation is already available on record at page 213 of the assessee's paper book and which was also submitted before the AO and even going by reasoning adopted to by the AO, the addition cannot be sustained. 16. Per contra the Ld. DR has relied on the orders of the lower authorities. 17. We have heard the rival contentions and purused the material available on record. As pe....
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....poses; (b) any trust or institution created or established wholly for religious and charitable purposes other than any anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust or institution. (3) For the purposes of this section, "anonymous donation" means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed. 19. As can be seen from the perusal of the aforesaid provisions, Section 115BBC can be invoked where the total income of the assessee, being a person in receipt of income on behalf of the trust or institution referred to in Section 11, includes any income by way of any anonymous donation. The term "anonymous donation" has been specifically defined under Sub-Section (3) to Section 115BBC of the Act as any voluntary contributions referred to in Subclause(iia) of clause(24) of section 2 where a p....
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....Ltd. from whom the assessee has received an amount of Rs. 8,00,00,000/-, Real Gas and Chemicals Pvt Ltd from whom the assessee has taken an amount of Rs. 5,00,000/- and in respect of Xpert Distributors Pvt Ltd from whom the assessee has received an amount of Rs 2,00,000/-, the assessee has furnished and thus maintained the necessary records in terms of establishing the identity of these entities in terms of name, address and the PAN particulars and the same is evident from the remand report so submitted by the AO and therefore, the amount so received from these entities cannot be termed as anonymous as the identity of these entities have been duly established and the provisions of Section 115BBC cannot be invoked and the action of the AO and that of the ld CIT(A) in sustaining the said action is hereby set-aside. 22. Similarly, in respect of corpus donation received from Mr P.K Jain, Mr Anil Kohli, Mr Rajesh Garg, Mr Sanjay Singla, Mr Rajender Jain, Mrs Sureka Thukral, M/s New Tech Engineers and M/s Jain Furnishing Pvt Ltd, the assessee has furnished and thus maintained the necessary records in terms of establishing the identity of these individuals/entities in terms of name, ad....
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.... "12. The AO also made addition in respect of current liability at Rs. 68,90,274/- as unexplained cash credits u/s 68 of the Act. On going through the details available in the Balance Sheet as on 31/03/2009, it is seen that the liabilities are on account of expenses debited but remained payable, deposits accepted, Govt. Dues payable etc. Apart from the deposits accepted, other amounts have appeared from the expenses debited to P & L account & as such cannot be an unexplained cash credit as envisaged u/s 68 of the Act. Therefore, other than the deposits appearing in the following names: Oasis Construction - Rs. 4,67,908/- Setya Builders - Rs. 3,99,392/- & MM Envro Rs. 1.26.983/- TOTAL - Rs. 9,94,283/- Other amounts cannot be considered as unexplained cash credits u/s 68 & doesn't deserve to be added." 29. It was submitted that out of total current liability of Rs. 68,90,274/-, only an amount of Rs. 9,94,283/- in respect of three parties has been held as unexplained cash credit by the AO and the Ld. CIT(A) has wrongly understood the said numbers as explained and the remaining amount as unexplained. It was further submitted tha....