ITAT Dissects 'Gupt Daan' Mystery: Unraveling unexplained Cash in Religious Trust Lockers [Read Order]

The Delhi Bench of  Income Tax Appellate Tribunal ( ITAT ) dissected a ‘Gupt Daan’,a secret gift regarding unexplained cash in a Religious Trust locker. A detailed examination was conducted regarding a search and seizure operation carried out on 20.04.2017 at the Bajaj Group premises.

During this operation, cash totaling Rs. 63,00,000 was discovered in two bank lockers - Rs. 41,00,000 in Federal Bank and Rs. 22,00,000 in SBI, which the Assessing Officer initially added as unexplained income.

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The assessee, Vinod Kumar Bajaj, maintained that the cash belonged to the RNB Temple Trust and was collected as donations (gupt daan) for temple construction in Bikaner. He submitted detailed audited financial statements and explained that the donations were collected informally during social gatherings, meetings, and through personal networks.

The donations were collected in simple bags, as no formal donation box existed since the temple was yet to be constructed.

The Commissioner of Income Tax (Appeals) ,CIT(A) conducted a meticulous review of the case. After examining the statements of Vikram Bajaj and Vinod Kumar Bajaj, along with the submitted documentary evidence, the CIT(A) partially accepted the assessee's explanation. The appellate authority recognized Rs. 1,75,00,000 as cash legitimately belonging to the RNB Temple Trust, which was reflected in their financial statements.

However, the CIT(A) was not entirely convinced about the source of the entire amount. While accepting most of the claim, the authority confirmed an addition of Rs. 18,00,000 as unaccounted income and deleted the remaining Rs. 45,00,000 from the original addition.

The decision was based on several considerations, including the lack of comprehensive documentation for the entire cash amount and some inconsistencies in the statements.

The CIT(A) noted some peculiarities in the case, such as the timing of the trust's registration, the absence of a bank account, and the method of collecting donations. The authority observed that while the explanation about collecting donations seemed plausible, the assessee could not provide exhaustive details about each donation's source.

During the ITAT hearing, the assessee's representative highlighted critical aspects of their case. He drew attention to the balance sheet of RNB Temple Trust, which showed substantial funds set aside for temple construction.

The representative pointed out that the cash found in the locker closely matched the declared cash in hand for the financial year ending 31.03.2017.

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Two member Bench comprised of Saktijit Dey ( Vice President ) and Sifa Ur Rahman ( Accountant Member ) carefully considered the statements recorded during the search, particularly the statement of Vikram Kumar Bajaj, who explicitly mentioned that the cash belonged partly to RNB Temple Trust and partly to other group entities. Additional evidence, including the balance sheet of Ram Bajaj Foundation and corresponding cash books, was also examined.

Ultimately, the ITAT's approach reflected a balanced perspective, acknowledging the partial credibility of the assessee's claim while maintaining the rigorous standards of income tax investigations. The decision underscores the need for transparency, detailed record-keeping, and the ability to substantiate the origin of financial resources during tax proceedings.

To Read the full text of the Order CLICK HERE

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