2026 (7) TMI 1163

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....an amount of Rs. 2.28 crores as part of CSR funds from M/s Lohia Corp. Limited. Thereafter Rs. 33 lakhs was returned/refunded by the assessee to M/s Lohia Corp ostensibly on the ground that this amount was required to be spent through another charitable organization. This activity happened before the close of the financial year being 31.03.2023. The Ld. AO treated this exercise as a violation of Section 13(1)(c)(ii) of the Act, r.w.s. 13(3)(b) of the Act. Thereafter, the Ld. AO made an addition of Rs. 176 crores by treating the entire receipts of the assessee during the year as taxable. 1.1 The aggrieved assessee approached the Ld. CIT(A) where he could succeed on the basis of findings given on pages 5 to 6 of the impugned order. In brie....

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....ount as corpus donation. 5. That the Ld. CIT(A) erred to rely upon the fact that transactions were routed through banking channels, without appreciating that the substance of the transaction must prevail over its form, and mere banking mode does not legitimize a transaction prohibited under section 13. 6. That the order of the Ld. CIT(A) is erroneous, contrary to law, and prejudicial to the interest of Revenue. Hence, the order of Ld. CIT (A) be cancelled and the order of the AO be upheld." 2. Before us the Ld. DR argued with the help of the assessment order and stated that the donor M/s Lohia Corp Limited had made a substantial contribution to the assessee within the meaning of Section 13(3)(b) of the Act, and due to t....