INCOME TAX ACT, 1961

Section 11(1)(d)

Charitable trust - Exemption under section 11 - Corpus donation - Out of 11 donors, two stated to have made normal donation only--AO drew adverse inference against entire amount

Assessee-trust received corpus donation amounting to Rs. 2,95,000 from 11 persons. AO required assessee to produce 11 (eleven) donors being individuals/HUFs. Out of 11 donors as summoned by AO 2 donors stated that they donated the amount as normal donation and not as corpus donation, AO drew adverse inference against entire amount of corpus donation of Rs. 2,95,000 and treated the same as normal donation.Held: Out of 11 donors only 2 donors had submitted that they have donated not for corpus. All other donors had appeared and filed their respective covering letters stating that donations given to assessee was for the purpose of corpus. In such a scenario, AO erred in drawing adverse inference against persons who had appeared and corroborated by deposing before AO that they had made donations for corpus of assessee. However, since two (2) donors had submitted that donation of Rs. 60,000 was to be treated as donation not for corpus, addition was confirmed to the extent of Rs. 60,000.

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 11(1)(a)

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