Amount given for Admission is not Donation to Charitable Trust: ITAT Confirms Income Tax Addition [Read Order]

The Income Tax Appellate Tribunal (ITAT) Pune Bench, confirmed the income tax addition of 6 Lakhs given for the admission in college is not donation to charitable trust and thus is taxable.

The assessee Society for Computer Technology and Research is a Charitable Trust engaged in Educational activities. It is registered under Section 12A of the Income Tax Act,1961. Return was filed for the year under consideration declaring Nil income.

During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee claimed to have received donation of Rs.42,48,738 (non corpus).

On being called upon to furnish the details of the donors, the assessee submitted the necessary details. One of the donors, namely, Ms. Suprabha D. Galakatu who had given donation of Rs.6.00 lakh as per the list provided by the assessee, furnished her response in the form of a letter to the AO stating that “no voluntary donation was given. A sum of Rs.6.00 lakh was paid towards admission of her sister’s son Mr. Soham Deshmukh of Aurangabad”.

The AO treated such amount as chargeable to tax and made the addition. Aggrived by the order, the assessee filed an appeal before Commissioner of Income Tax (Appeals) [CIT(A)] but no relief was allowed in the first appeal, against which the assessee. Further aggrieved the assessee filed an appeal before the ITAT.

The Bench comprising of R.S. Syal, Vice President, observed that it is clear from the letter of Ms. Suprabha D. Galakatu, who gave specifically complete narration of the circumstances of entering the college, that she did payed a sum of Rs.6.00 lakh to the assessee but that was in lieu of admission of her sister’s son, Mr. Soham Deshmukh and not as donation.

In the letter she states, “I have given Rs.6,00,000/- for seeking admission and have not given donation to any other charitable institution”.

Thus, there was no merit in the contention of the assessee and therefore, confirms the addition made by the lower authorities.

Kiran Sanmane appeared as Authorised Representative on behalf of assessee and  Mugdha Sardeshpande as Departmental Representative.

To Read the full text of the Order CLICK HERE

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