The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that no addition could be made on sponsorship contributions received from friends and relatives.
Assessee Bhagyashree Manohar Sawant is engaged in mountaineering summit and received sponsorship contributions from various organizations, friends and relatives in the financial year 2010-11. Assessee has not filed the return of income for assessment year 2011-12.
The Assessing Officer (“AO”) has received information from the bank that the assessee during the financial year 2010-11 has made cash deposits aggregating to Rs.19,55,700/- in the saving bank account maintained with State Bank of India and the contract receipts of Rs.3,00,000.
The AO issued notice under Section 148 of the Income Tax Act. After getting the notice assessee filed return of income for assessment year 2011-12 disclosing a total income of Rs.2,960/-.
Thereafter the AO issued notice for calling information. Thereafter AO found that assessee has disclosed the income under “income from other sources” and the assessee has not produced the evidences in respect of sources of cash deposits in the bank account to the extent of Rs.19,55,700.
Assesee explained that the assessee was engaged in mountaineering summit and has received sponsorship contributions from various organizations, friends and relatives.
AO further noted that the assessee did not provide any evidence regarding contributions received from friends and relatives.
Thus AO made addition without satisfying the explanation filed by the assessee.
Aggrieved by the assessment order assessee filed appeal before the CIT(A). The CIT(A) confirmed the action of the AO and dismissed the appeal of the assessee.
Malav Sheth, counsel for the assessee submitted that CIT(A) has erred in confirming the addition made by the AO overlooking the factual information filed in the proceedings.
Further, the counsel submitted that the assessee has a good case on merits and has filed an application for admission of additional evidence Under Rule 29 of the Income Tax Rules, 1962 and prayed for allowing the appeal.
Anil Gupta, counsel for the revenue submitted that cash deposits transactions are not established with the evidence before the lower authorities.
It was observed by the tribunal that e assessee is filling the application for admission of additional evidences under Rule 29 of ITAT rules with the sponsorship confirmation from ICICI Lombard General Insurance, Sponsorship amount confirmation from Central Bank Of India, and confirmations of friends and relatives who have sponsored the mountaineering event, which were not available earlier and could not produce before the lower authorities.
It was also pointed out that evidence plays an important role in decision making in the adjudicating proceedings.Thus the bench opinion that the assessee should not suffer for non filing of material information, as the evidence played a vital role in decision making and we admit the additional evidence.
Therefore, the two member bench of Pavan Kumar Gadale, (Judicial Member) and Padmavathy S, (Accountant Member) restored the entire disputed issues along with the additional evidence to the file of the assessing officer and allowed the appeal.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
