TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 317
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....ed in the audited books of account and supported by donor lists and records filed before Ld. AO. The CIT(A) wrongly concluded that the absence of written directions from individual donors invalidated the corpus nature, ignoring that the donors' intention and the trust's consistent treatment established their corpus character. The addition was made merely due to non-compliance of a show cause notice and without any specific adverse finding or contrary material. The confirmation of such addition is unjustified, contrary to settled judicial principles, and deserves to be deleted. 2. The Ld. CIT(A) has erred in confirming the addition of Rs. 70,69,780/- made u/s 69A of the Act by treating cash deposits as unexplained money. The appellant had clearly explained that the deposits represented regular fee collections from students of its educational institutions, duly recorded in the audited books of account. The Ld. AO as well as Ld. CIT(A) failed to appreciate that the source of cash deposits was from the trust's normal charitable activities and not from any undisclosed source. The addition was sustained merely due to non-production of certain registers and without po....
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....the said figure. 6. Before the Ld. CIT(A), the assessee filed all evidences to prove the genuineness of its claim and pleaded with the Ld. CIT(A) to admit the same for deciding its appeal. Ld. CIT(A) admitted the evidence filed by the assessee, forwarded the same to the AO directing him to submit a remand report on the same. The AO submitted his remand report justifying the addition made during the assessment proceedings. Copy of the remand report was forwarded to the assessee who, in turn, filed their rejoinder to the remand report. Thereafter, considering both the AO's report and assessee's reply to the same, Ld. CIT(A) confirmed the addition made by the AO finding merit in the remand report submitted by the AO justifying the addition made during assessment proceedings. 7. Aggrieved by the order of the Ld. CIT(A), the assessee has come up in appeal before us raising the above grounds. 8. Taking up Ground No.1 pertaining to the addition made of corpus donation received by the assessee, Ld. CIT(A) we have noted, has confirmed the addition made finding that the assessee failed to establish the identity of the actual donors and no written direction from any donor specifying ....
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....e its submission dated 16. 09. 2019 before Ld. CIT(A)-9, has submitted the list of 55 donors from whom the assessee has claimed to have received the corpus donation. The detailed analysis of the submission made by the assessee in respect of the claim of corpus donation is as follows: Note- The sum total of the amount of donation, claimed to be corpus donation by assessee, is mentioned as Rs. 48,38,724/-. " It is pertinent to note that a letter 22-12-2015 signed by Smt. A.A. Shaikh, Principal F. D.High School For Girls, Jamalpur Darwaja (E), Ahmedabad, 380001 has been submitted by the assessee. This letter comprises of the name of students of standard 11B for which the assessee has claimed that they are in nature of corpus donation. The assessee has not submitted the receipts issued in respect of the donation received. Further, on perusal of the said letter i t is found that it is mentioned that the students have collected donations voluntarily for Jamalpur Building Fund (Corpus Donation). This makes it evident that the amount mentioned against the name of students in the said letter is actually the amount of donation collected by the students and not the amount of....
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....reated as voluntary donation meant for corpus donation." 12. Referring to the above, he pointed out that out of the total corpus donation of Rs. 48.38 Lakhs received by the assessee, the AO in his remand report noted anomaly with respect to the donations listed at Sr. Nos. 8 to 55. He pointed out that there was no anomaly noted in the corpus donations listed at Sl. Nos.1 to 7 which in all amounted to Rs. 42,33,543/-. He, therefore, contended that there was no case at all for disallowing assessee's claim of exemption u/s.11(1)(d) of the Act with respect to these corpus donations. 13. Ld. DR was unable to controvert these factual contentions made by the Ld. Counsel for the assessee before us. 14. In view of the above, we hold that the disallowance of exemption claimed by the assessee u/s 11(1)(d) of the Act towards corpus donation made to the tune of Rs. 42,33,543/-, pertaining to donations received from parties listed at S. Nos. 1-7 of the list of donors reproduced above, is not sustainable, being admittedly made without giving any basis or reasons. The disallowance of corpus donation of Rs. 42,33,543/- is therefore directed to be deleted. 15. Thereafter, Ld. Counsel for....
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....(1)(d) of the Act, is factually incorrect. The assessee, we have noted, had filed letters from the said two donors clearly indicating the donations to have been made for towards the corpus of the assessee trust. Ld. CIT(A)'s order disallowing the assessee's claim of exemption of corpus donation made by donors listed at S.No.8 & 9 of the list of donors reproduced above is, therefore, we hold, incorrect and the AO is directed to allow the said claim of exemption to the assessee. 20. Our attention thereafter was drawn to the remand report of the AO and it was pointed out therefrom that the AO had further noted anomaly with respect to donation listed at Sl. Nos. 10 to 49. He pointed out that the AO noted these donations to have been collected by the students of the School run by the assessee i.e. F.D. High School for Girls, Jamalpur Darwaja (E), Ahmedabad, of standard 11B. The AO, he pointed out noted the said fact from a letter dated 22.12.2015 signed by Smt. A. A. Shaikh, Principal of the said School. The AO found that the assessee had not submitted receipts issued in respect of the said donations received and noting that the amounts were collected by the students, he found that t....
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....s stated that such real donors are unknown as details and specific direction from that unknown donor for treating it as corpus is not furnished by the assessee. It is submitted that such contention of AO is self- contradictory to his understanding as he, earlier in his para. mention that students have collected donations voluntarily for Jamalpur Building Fund which itself shows the specific direction for donations received from the students and therefore i t is clear regarding directions and person donated are duly known. * Further, it is required to mention that such donations received in cash are accounted as Corpus donations in the name of Students of Std. 11 B of F. D. High School for girls. They have collected said donations from different donors, with specific direction for Jamalpur Building Fund during the AY 2016 -17, and appellant has maintained Name and Address of Donor, which is required as per the provisions of the Act. * Therefore, contention of the AO about identity of real donors is not correct as appellant has duly maintained record of the identity of donor indicating name and address of the person making donations, as not to attract Anonymous dona....
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....e total corpus donations. The impugned donations being 2 lacs constitute barely 5% of the total donations. The AO having accepted 88% of the total corpus donations and the impugned donations being barely 5% of the total corpus donations with respect to which the fact of the same having been collected for the corpus of the assessee trust by students of the school run by the assessee trust is not disputed, we see no reason to disallow assesses claim of exemption to the said donation u/s 11(1)(d) of the Act. 25. In view of the above, we hold that the denial of grant of exemption u/s 11(1)(d) of the Act to donations collected in cash by students of the School run by the assessee trust amounting in all to Rs. 2 Lakhs as unjustified. The AO is accordingly directed to grant exemption of the same. 26. Thereafter, Ld. Counsel for the assessee pointed out from the remand report of the AO that the AO treated the donation listed at Sl. No.50 as not qualifying for exemption due to discrepancy in respect of PAN. 27. He pointed out that in response to the remand report of the AO as above, the assessee furnished its reply pointing out the correct PAN number of donor therein. He drew our a....
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....onation have specific stamp, stating that ' This donations is given for specific direction that it shall be form part of Trust Corpus. * Further, Ld. AO failed to appreciate that such donations are directly credited in SBI- FCRA Saving Bank Account (Account No.10458553700), which shows that it is a foreign donation and letter/ correspondence from the donor is not possible at the time of assessment scrutiny. And the same has not be asked by the Ld. AO while issuing letter dated 13/05/2024 during remand proceeding. Further, during remand proceeding, appellant has duly submitted bank statement of SBIFCRA account, duly highlighting such donations. * Considering the circumstances of the case, kindly appreciate the same that donation receipts as well as extract of bank statement submitted before Ld. AO during the remand proceedings which proves that these donations are correctly credited in FCRA Bank account and duly accounted as corpus in our audited books of account." 31. Referring to the above, he pointed out that the donation receipts of these donations carried a specific stamp that the donation was given for specific direction that they shall form corpus of ....
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....w fulfills the conditions stated in law and as noted by the Ld. CIT(A) of there being a specific direction by the donor of the donation being made towards corpus of the trust. 34. In the light of the same, having noted the facts on record to have demonstrated sufficiently the foreign donations received by the assessee to have been made towards the corpus of the trust, we see no reason for denying the assessee's claim of exemption of such donation u/s.11(1)(d) of the Act to the same. The AO, accordingly, is directed to allow the assessee's claim of exemption u/s.11(1)(d) of the Act of foreign donation received by it. 35. It was common ground that the above were the only infirmities noted by the AO/CIT(A) in the corpus donation received by the assessee to disallow the entire corpus donation received by the assessee of Rs. 48,38,779/-. Since, we have dealt with each anomaly noted by the Ld. CIT(A) and have found the same to be not sufficient or have found the denial of the exemption to be incorrect, we direct the AO to allow the assessee's claim of exemption of corpus donation u/s.11(1)(d) of the Act to the entire extent claimed by it amounting to Rs. 48,38,779/-. 36. Ground ....
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....ith bank statement and supporting extract of audited financial statement. * Further, for cash deposited in State Bank of India (Rs. 58,77,500/-), the appellant has duly submitted summary of transactions, Bank book of FD (Mubin) Institute of Engg & Tech, along with supporting extract of audited financial statement. * These documents are filed before your good self to substantiate the fact that these cash deposits are in relation to the fees received from students in cash. * It is further mentioned that during the remand proceeding, the Ld. AO not asked any details or documents regarding cash deposited during the year under consideration and now the Ld. AO objecting the same in remand report stating that certain documents like receipt issued for fees received in cash, cash book and Bank statements of FD (Mubin) Institute of Engg. & Tech. are not provided by assessee. Hence, the said contention of the Ld. AO has not correct. * The Appellant has filed sufficient documents to substantiate the fact of the case that all those cash deposits are in nature of fees received and if your goodself require any further information, we can provide the same based ....
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....ave noted, the assessee submitted a list of students from whom the fees were received alongwith the copy of cash book and even bank statement. The assessee also submitted its audited financial statement pointing out there was no adverse comments made by the Auditor with respect to any transaction carried out by the assessee. Undeniably, the assessee is running educational institutions. It has submitted the list of students from whom the fees have been collected in cash. The assessee has reflected the said receipts in cash in its cash book and the fees received have been duly accounted for as income of the assessee. The books of accounts of the assessee are duly audited and no discrepancy has been pointed out in the same. In the light of the above, we do not find any merit in the orders of the authorities below rejecting assessee's explanation merely for the reason that the cash receipts of the fees were not submitted or even in one case the cash book was not produced. It is not disputed that the books of accounts of the assessee are audited and there is no reason pointed out by the AO to doubt the assessee's explanation of fees have been received in cash especially when the assesse....
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....medabad Corpus Donation List In the F.Y. 2015-16 A.Y. 2016-17 Dener's Name Address of Dorer Amens Sana Parveen Ma Aslan 1000-00 CAP ThÆ°Æ¡ng fund Gris Vad-11 @ Lowalpyr, Abergelabad CAO Bulông fund 22 0c 2043 1000-00 Students of f. D. Haber Secondary School for hÆ°Æ¡ng Fund 5000 00 PalỨng fund 23 Students of F D Higher Secondary Schoolfor 1000 0 CASH 5000-00 CATH huffing fund - 5000 09 22-040-2015 1000-06 31 Dec 3011 100000 22 0m 2015 1000-00 tuhăng fund 24 20 De 2015 Students of r D wigtues Secondary School for - $006-00 CAMP 22 Der 2015 Mamuri Sanıbaru Ma Saim Saudinats of I.D. magher Secondary School for 22:00-2015 9000 00 tÆ°á»ng fund Ihudents of F.D. Higher Secondary School for for 9000 00 CASH 23 00-2015 Students of F.D. Higher Secondary School Balding rund Jamalpur, Ahmedabad Corpus Donation List In the F.Y. 2015-16 A.Y. 2016-17 Ihudents of F.D. Higher Secondary School for for Document 3 99 ANNEXURE- A ANNEXURE- A F.D. EDUCATION SOCIETY PAN :- AAATFOGYSI Jamalpur, ....