Short Overview: Where corpus donation could not be verified as donor was not co-operating in providing details, it was rightly treated as unexplained cash credit under section 68.

Assessment was completed by making addition of corpus donation received from a society, treating as unexplained cash credit under section 68. CIT(A) deleted the alleged corpus donation. Tribunal set aside issue for verification of corpus donations. During course of reassessment proceedings, various queries were asked from donor, which was not provided. Therefore, AO made addition as an accommodation entry in form of alleged donation.

It is held that AO made enquiry from each and every aspect, but nothing new had come up during intervening period. All efforts to verify balance sheet of donor, had gone in vain as it had not cooperated to provide the desired information which could have helped reaching truth. Mode of transaction viz. depositing of cash equivalent to donations immediately before issuing of demand drafts raised doubt as to genuineness of transactions, enumerating therein fact that donor had no capacity to pay donation. Therefore, CIT(A) had rightly affirmed action of AO in treating corpus donation as undisclosed income under section 68.

Decision: Against assessee