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July 2014

Cash credit: Charitable trust: S/s. 11 and 68: A. Y. 2001-02: Exemption u/s. 11: Donations disclosed as income: Not to be added as cash credit:

By K.B.Bhujle Advocate
Reading Time 1 mins
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CIT vs. Uttaranchal Welfare Society; 364 ITR 398 (All):

The assessee is a charitable society eligible for exemption u/s. 11 of the Income-tax Act, 1961. For the A. Y. 2001-02, the Assessing Officer made an addition of Rs. 96,50,000/- being the donations received from different persons on the ground that the donations were not genuine. The Tribunal deleted the addition and held that section 68 is not applicable to the facts of the case and since the assessee had disclosed donations of Rs. 96,50,000/- in its income and expenditure account and all the receipts, other than corpus donations, were declared as income in the hands of the assessee, there was full disclosure of the income by the assessee.

On appeal by the Revenue, the Allahabad High Court upheld the decision of the Tribunal and held as under:

“The Tribunal was justified in treating the donations as voluntary and deleting the addition of Rs. 96,50,000/- made by the Assessing Officer u/s. 68 in allowing the exemption u/s. 11 of the Act.”

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