M/s. Prakash Ply Centre Pvt. Ltd., Kolkata V. ACIT, Central Circle-3(3), Kolkata, Kolkata

CO 79/KOL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9895 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-09-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 07-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Search and seizure; Document seized; Bonafide belief; Question of law; Deemed dividend; Accommodation entries; Assessment record; Tax effect; Documents seized; Set aside
• Section: 143(3); 133A; 153A; 2(22)(e); 14A; 80IB; 250; 143(2); 264; 131; 68; 263; 132; 154; 15

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER IT (SS) A NO. 24 - 25 / KOL / 2017 & ITA NO.1313-1314/KOL/2017 C.O. NO.79-82.KOL/2017 ASSESSMENT YEARS :2009-10 & 2012-13 ACIT, CENTRAL CIRCLE- 3(3), AAYKAR BHAWAN POORVA, E/.M. BYE PASS,110, SHANTI PALLY, 4 TH FLOOR, KOLKATA-107 V/S . M/S PRAKASH PLY CENTRE PVT. LTD., 4 TH FLOOR, 41, B.B. GANGULY STREET, CENTRAL PLAZA, KOLKATA-700 012 [ PAN NO. AADCP 7132 J ] /APPELLANT .. / RESPONDENT IT (SS) A NO. 07 / KOL / 2017 ASSESSMENT YEAR :2013-14 PRAKASH PLY CENTRE PVT. LTD., CENTRAL AVENUE, BOWBAZAR, CROSSING, KOLKATA-700 012 [ PAN NO.AADCP 7132 J ] V/S . DCIT, CENTRAL CIRCLE- 3(3), AAYKAR BHAWAN POORVA, E/.M. BYE PASS,110, SHANTI PALLY, 4 TH FLOOR, KOLKATA-107 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI S.M. SURANA, ADVOCATE /BY REVENUE SHRI RADHAY SHYAM, CIT-SR-DR /DATE OF HEARING 11-09-2019 /DATE OF PRONOUNCEMENT 18-09-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THE INSTANT BATCH OF NINE CASES PERTAINS TO A SING LE ASSESSEE M/S PRAKASH PLY CENTRE PVT. LTD. THE REVENUE AND ASSESS EE HAVE FILED IT(SS)24- 25/KOL/2017 ITA 1313-1314/KOL/2017 ALONGWITH LATTER S CROSS OBJECTION(S) IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 2 NO.79-82/KOL/2017 FOR ASSESSMENT YEAR(S) 2009-10 TO 2012-13 AND LATTERS APPEAL IT(SS) NO.07/KOL/2017 FOR ASSESSMENT YEAR 2 013-14; AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-21 KOLKATAS S EPARATE ORDERS; ALL DATED 23.03.2017 PASSED IN CASE NO.86-90/DCIT.CC-3( 3)/CIT(A)-21/2016-17 AND ( ASSESSMENT YEAR-WISE ); INVOLVING PROCEEDINGS U/S 153C/143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THE REVENUES T WO APPEAL(S) IT(SS)A NO.25/KOL/2017 & ITA NO.1314/KOL/2017 FOR ASSESSMENT YEAR(S) 2010-11 AND 2012-13 INVOLVE TAX EFFECT LESS THAN 50 LAKHS PRESCRIBED IN REVISED THRESHOLD LIMIT IN CBDTS LATEST CIRCULAR NO17/2019 DATED 08.08.2019. 3. ON PERUSAL OF THE CIRCULAR NO. 17/2019 DATED 08. 08.2019 AND THE MATERIALS AVAILABLE ON RECORD, WE DO NOT SEE THESE CASE(S) FALLING UNDER ANY OF THE EXCEPTIONS CONTEMPLATED THEREIN. WE ALSO FIND THAT THIS CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONETARY LIMITS SHALL A PPLY RETROSPECTIVELY TO PENDING APPEALS AS WELL. H ONBLE APEX COURT IN COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION LTD REPORTED IN 267 ITR 272 (SC) HAS SETTLED THE LAW THAT CBDTS CIRCULARS ARE VERY MUCH BINDING ON REVE NUE AUTHORITIES. WE THEREFORE DECLINE THE REVENUES INSTANT TWO APPEAL( S) AS INVOLVING LOWER THAN THE PRESCRIBED TAX EFFECT. LEARNED AUTHORIZED REPRE SENTATIVE IS EQUALLY FAIR IN NOT PRESSING FOR ASSESSEES CROSS OBJECTION CO NOS. 80 & 82/KOL/2017. THESE ASSESSEES CROSS OBJECTIONS ARE DISMISSED AS NOT PR ESSED THEREFORE. 4. WE NOW COME TO THE COMMON ISSUE OF LEGALITY OF T HE IMPUGNED ASSESSMENT PROCEEDINGS INITIATED IN ASSESSMENT YEAR (S) 2009-10 AND 2011-12 U/S. 153C R.W.S. 143(3) OF THE ACT. THE CIT(A) HAS DECIDED THE ISSUE IN ASSESSEES FAVOUR AS UNDER:- 5. I HAVE CONSIDERED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION AS WELL AS DIFFERENT CASE LAWS BROUGHT O N RECORD BY THE AR. THE MAIN ARGUMENT OF THE AR IS THAT ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 153A/143(3) ARE NOT BASED ON ANY INCRIMI NATING DOCUMENTS/PAPERS SEIZED DURING THE SEARCH OPERATION. THE AR HAS BROU GHT ON RECORD MANY CASE LAWS DECIDED BY THE JURISDICTIONAL KOLKATA BENCH OF ITAT AND JURISDICTIONAL CALCUTTA HIGH IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 3 COURT ON THIS ISSUE. CALCUTTA HIGH COURT HAS TIME A ND AGAIN REITERATED ITS VIEW THAT THE ADDITIONS IN CASE OF THE SEARCH ASSESSMENTS HAS TO BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. SOME OF THE RECENT DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT ARE DISCUSSED HEREUNDER. PCIT-2. KOLKATA VS. SALASAR STOCK BROKING LIMITED ( ITAT NO. 264 OF 2016) DATED 24.08.2016: (CALCUTTA) IN THIS CASE, THE HONORABLE HIGH COURT OBSERVED THA T THE LD. I.TAT. KOLKATA WAS OF THE OPINION THAT THE ASSESSING OFFICER HAD NO JURIS DICTION U/S 153A OF THE I.T. ACT TO REOPEN THE CONCLUDED CASES WHEN THE SEARCH & SEIZUR E DID NOT DISCLOSE ANY INCRIMINATING MATERIAL. IN TAKING THE AFORESAID VIE W, THE LEARNED ITAT RELIED UPON THE JUDGMENTS OF DELHI HIGH COURT IN THE CASE OF CIT(A) VS KABUL CHAWLA IN ITA NO. 707/2014 DATED 28.08.2014. THE COURT ALSO OBSERVED THAT MORE OR LESS AN IDENTICAL VIEW HAS BEEN TAKEN BY THIS BENCH ITA NO. 661/2008 IN THE CASE OF CIT VS. VEERPRABHU MARKETING LIMITED. CONSIDERING THE ABOVE FACTS, THE HONORABLE HIGH COURT DID NOT ADMIT THE APPEAL FILED BY THE DEPARTM ENT. 'CIT, KOLKATA-III VS. VEERPRABHU MARKETING LTD.[201 61 73 TAXMANN.COM 149 (CALCUTTA) : IN THIS CASE THE HONORABLE CALCUTTA HIGH COURT EXPR ESSED THE FOLLOW VIEWS: 'WE ARE IN AGREEMENT WITH THE VIEWS OF 'THE KARNATA KA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE-REQUISITE BEFORE PO WER COULD HAVE BEEN EXERCISED UNDER SECTION 153C READ WITH SECTION 153A . IN THE CASE BEFORE US, THE ASSESSING OFFICER HAS MA DE DISALLOWANCE OF THE EXPENDITURE, WHICH WERE ALREADY DISCLOSED, FOR ONE REASON OR THE OTHER. BUT SUCH DISALLOWANCES WERE NOT CONTEMPLATED BY THE PRO VISIONS CONTAINED UNDER SECTION 153C READ WITH SECTION 153A. THE DISALLOWA NCES MADE BY THE ASSESSING OFFICER WERE UPHELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELETED THOSE DISALLOWANCES.' THE HON'BLE KOLKATA HIGH COURT IN THE ABOVE CASES R ELIED ON THE FOLLOWING JUDGMENTS. CIT VS. KABUL CHAWLA (2016) 380 ITR 0573 (DEL) SEARCH AND SEIZURE-NEW SCHEME OF ASSESSMENT IN SEAR CH CASES- SEARCH WAS CARRIED OUT U/S. 132 ON A LEADING REAL ESTATE D EVELOPER OPERATING ALL OVER INDIA AND SOME OF ITS GROUP COMPANIES-SEARCH WAS AL SO CARRIED OUT IN THE PREMISES OF THE ASSESSEE-PURSUANT TO THE SEARCH A N OTICE U/S 153A(1) WAS ISSUED TO ASSESSEE AND THEREAFTER HE FILED RETURNS AS ON THE DATE OF THE SEARCH, NO ASSESSMENT PROCEEDINGS WERE PENDING FOR RELEVANT AYS AND FOR SAID AYS, ASSESSMENTS WAS ALREADY MADE U/S 143(1), ASSESSEE FILED AN APPLICATION U/S 154 SEEKING RECTIFICATION OF THE AS SESSMENTS ON THE GROUND THAT THE ACCUMULATED PROFITS OF THE COMPANIES PAYIN G THE DIVIDEND WERE LESS THAN THE AMOUNT OF LOAN OR ADVANCE GIVEN BY THEM TO THE RECIPIENT COMPANIES- AO DECLINED TO RECTIFY THE ASSESSMENTS-C IT ALSO HELD THAT ADDITION NEED NOT BE RESTRICTED ONLY TO THE SEIZED MATERIAL-ITAT ON APPEAL HOWEVER DELETED ADDITION ON GROUNDS THAT THE ADDITI ONS MADE FOR RELEVANT AY'S U/S 2(22)(E) WERE NOT BASED ON ANY INCRIMINATI NG MATERIAL FOUND DURING SEARCH OPERATION AND SAME WAS NOT SUSTAINABLE IN LA W-ISSUE WAS WHETHER THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE FOR TH E SAID AYS U/S 2(22)(E) WAS NOT SUSTAINABLE BECAUSE NO INCRIMINATING MATERI AL CONCERNING SUCH IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 4 ADDITIONS WERE FOUND DURING THE COURSE OF SEARCH AN D FURTHER NO ASSESSMENTS FOR SUCH YEARS WERE PENDING ON THE DATE OF SEARCH-H ELD, PRESENT APPEALS CONCERNED AYS,200203, 200506 AND 200607-ON THE D ATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED-SINCE NO I NCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED-QUESTION FRAMED BY THE COUR T WAS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE-REVE NUE'S APPEAL DISMISSED. 6. I FURTHER FIND THAT IN THIS REGARD THE HON'BLE I TAT KOLKATA HAS TIME AND AGAIN REITERATED ITS VIEW THAT THE ADDITIONS IN CASE OF T HE SEARCH ASSESSMENTS HAS TO BE MADE ON THE BASIS OF INCRIMINATING MATERIAL AND ANY DEVIATION FROM THE SAME WOULD RENDER THE ASSESSMENT ORDER INVALID. SOME OF THE RE CENT DECISION OF THE HON'BLE JURISDICTIONAL TRIBUNAL IS DISCUSSED HEREUNDER M/S ADHUNIK GASES LTD. & OTHERS VS. DCIT CC-XXX, IT (SS)A NO. 47/KOL/2015, IT(SS)A NO. 49/KOL/2015, IT(SS)A NO. 50-2/KOL/2015, IT(SS)A NO. 54/KOL/2015, IT(SS)A NO. 55/KOL/2015, IT(SS)A NO. 94-96/KOL/2015 ORDER DATED 06.01.2017( ITAT KOLKATA ) IN THIS CASE IT IS HELD THAT NO ADDITION U/S 68 OF THE I.TAX ACT FOR THE SHARE CAPITAL CAN BE MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL. THE CONCLUDING PARA OF THE HON'BLE ITAT'S ORDER IS AS UNDER. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MAT ERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS WE ARE OF THE PROPOSITIONS CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE JUDGMENTS OF JURISDICTIONAL ITAT A ND HON'BLE HIGH COURTS. LD. AR HAS POINTED OUT THAT NO INCRIMINATING DOCUME NTS WAS FOUND EITHER DURING SURVEY OR DURING SEARCH PROCEDURE. THE STATE MENT OF SHRI NARESH KUMAR CHHAPERIA SHOULD NOT BE RELIED ON, BECAUSE HE IS A DOUBLE SPEAKING PERSON. THE ASSESSMENT PROCEEDINGS WERE COMPLETED BEFORE TH E DATE OF SEARCH. BESIDES, THE TIME LIMIT TO ISSUE NOTICE U/S 143(2) WAS ALSO EXPIRED. IN ORDER TO INITIATE ASSESSMENT PROCEEDING S U/S153A, THERE SHOULD BE A NEW OR INCRIMINATING DOCUMENT. THE ASSE SSMENT WHICH IS ALREADY COMPLETED U/S 143(3)/143(1) SHOULD NOT BE R EOPENED. THEREFORE, CONSIDERING THE SCHEME OF SECTION 132 AND SECTION 1 53A, WE ARE OF THE VIEW THAT THERE SHOULD BE SOME NEW DOCUMENT/INCRIMI NATING DOCUMENT TO INVOKE THE PROVISIONS OF SECTION 153A. LD. DR FOR THE REVENUE HAD POINTED OUT THAT THERE IS A DIRECT NEXUS AMONG THE COMPANIES} WHICH HAS BEEN ESTABLISHED BY THE STATEMENT OF MR. NARESH KUM AR CHHAPPERIA, WHICH CANNOT BE RELIED ON} AS HE WAS A DOUBLE SPEAKING PE RSON. THEREFORE, CONSIDERING THE FACTUAL POSITION AND THE JUDGMENTS CITED BY ID. AR} WE ARE OF THE VIEW THAT THE ADDITIONS MADE BY THE AD U/ S 153 A AND CONFIRMED BY THE ID. CIT(A) NEEDS TO BE DELETED. THEREFORE} WE DELET E THE ADDITION.' FURTHERMORE, THE DECISION OF THE JURISDICTIONAL TRI BUNAL IN THE CASE OF M/S TANUJ HOLDINGS PVT LTD VS. DCIT CC-L(2), KOLKATA VIDE ITAT NO. 360 TO 363/KOL/2015 DATED 20.01.2016 IS IMPORTANT. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED AS UNDER: WE ALSO FIND THAT NO INCRIMINATING MATERIALS WERE F OUND DURING THE SEARCH IN THE RESPECT OF THE ISSUE OF DEEMED DIVIDEND. HENCE IT CANNOT BE THE SUBJECT MATTER OF ADDITION IN 153C PROCEEDINGS IN RESPECT O F COMPLETED ASSESSMENTS. WE HOLD THAT WHEN AN ADDITION COULD NOT BE MADE AS PER LAW IN SECTION IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 5 153C PROCEEDINGS, THEN THE SAID ORDER CANNOT BE CON STRUED AS ERRONEOUS WARRANTING REVISION JURISDICTION U/S 263 OF THE ACT. ' SHRI. MANISH MUNDHRA VS. ACIT-CC-XXX IN ITA-469-470 /KO1!2013 DT. 16.12.2015 (ITAT KOLKATA) ; WE ALSO ARE OF THE VIEW THAT IN THE LIGHT OF THE AD MITTED FACT THAT NO INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF S EARCH THE IMPUGNED ADDITION COULD NOT HAVE BEEN MADE IN THE PROCEEDING S U/ S 153A OF THE ACT. THE DECISION OF THE ITAT} DELHI BENCH IN THE CASE O F ACIT VS M/ S. DELHI HOSPITAL SUPPLY PVT. LTD. (SUPRA) FOLLOWED THE DECI SION OF HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) SUPPORTS THE PLEA OF THE ASSESSEE IN THIS REGARD ..... ACIT-CC-XXVII VS KANCHAN OIL INDUSTRIES LTD. IN ITA -725/KOL/2011 DT. 09.12.2015 (ITAT KOLKATA ); IN VIEW OF THE AFORESAID FINDINGS AND JUDICIAL PREC EDENT RELIED UPON, WE HOLD THAT THE DENIAL OF DEDUCTION U/S 80IB OF THE ACT IN THE ASSESSMENTS FRAMED U/S 153A OF THE ACT FOR THE ASST YEARS 2003-04 AND 2004 -05 WITHOUT ANY INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH WITH RESPECT TO THOSE ASSESSMENT YEARS IS NOT WARRANTED AND HELD, A S NOT IN ACCORDANCE WITH LAW. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE N THIS REGARD FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 ARE DISMISSED. WE HOLD THAT THE SAME DECISION WOULD BE APPLICABLE FOR THE DISALLOWANCE MADE BY THE LEARNED AO U/S 14A OF THE ACT AND ACCOR DINGLY NO DISALLOWANCE U/S. 14A OF THE ACT COULD BE MADE FOR THE ASST YEAR 2004-05 BY THE LEARNED AO IN THE ASSESSMENT FRAMED U/S. 153A OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIALS FOUND DURING THE CURSE OF S EARCH WITH REGARD TO THE RELEVANT ASSESSMENT YEAR AND WITH REGARD TO THE REL EVANT ISSUE. WITH REGARD TO THE CLAIM OF DEDUCTION U/S 80IB OF T HE ACT FOR THE ASST YEARS 2007-08 AND 2008-09 ARE CONCERNED, WE FIND THAT THE SAME IS ONLY CONSEQUENTIAL IN NATURE AND ONCE THE ASSESSEE HAS B EEN GRANTED DEDUCTION U/ S 80IB OF THE ACT FOR THE INITIAL ASSESSMENT YEA R I.E. ASST YEAR 2003-04, THE GRANT OF DEDUCTION UNDER THE SAID SECTION IN RESPEC T OF THE SAME UNIT IS ONLY ACADEMIC AND HENCE THE ASSESSEE IS ENTITLED FOR DED UCTION U/ S 80IB OF THE ACT FOR THE ASST YEARS 2007-08 AND 2008-09. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IN TH IS REGARD FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 ARE DISMISSED. ' SINCE THE DECISIONS ARE RENDERED BY US ON LEGAL GRO UNDS, WE REFRAIN TO GIVE OUR DECISION ON THE MERITS OF THE ISSUES .' BUDHIYA MARKETING PVT. LTD. & ORS. VS. ACIT IN ITA NOS-1545-1546/KOL./2012 [REPORTED IN (2015) 44 CCH 03441 DT. 10.07.2015 (IT AT KOLKATA) 'THE ISSUE WHETHER THE ADDITION IN AN ASSESSMENT FR AMED UNDER SECTION 153A CAN BE MADE ON THE BASIS OF THE INCRIMINATING MATER IAL FOUND DURING THE COURSE OF THE SEARCH WHERE THE ASSESSMENT HAS NOT B EEN ABATED, HAS NOT BEEN CONSIDERED OR DECIDED BY THIS TRIBUNAL. THEREF ORE, THIS DECISION, IN OUR OPINION WILL NOT ASSIST THE REVENUE WHILE DISPOSING OF THE PLEA OF THE ASSESSEE THAT SINCE NO INCRIMINATING MATERIAL IS FOUND DURIN G THE COURSE OF THE SEARCH RELATING TO THE SHARE CAPITAL AND THE SHARE PREMIUM , THEREFORE, NO ADDITION CAN BE MADE WHILE MAKING AN ASSESSMENT UNDER SECTION 15 3A OF THE INCOME TAX ACT. NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLE DGE BY THE LD. D.R. IN IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 6 VIEW OF THE AFORESAID DISCUSSION AND THE DECISION O F THE HON'BLE SPECIAL BENCH, BOMBAY HIGH COURT, AS WELL AS HON'BLE DELHI HIGH COURT, WE CONFIRM THE ORDER OF THE CIT(APPEALS) DELETING THE ADDITION MADE IN EACH OF THE ASSESSMENT YEARS AS WE HOLD THAT THE ASSESSING OFFI CER WAS NOT CORRECT IN LAW IN MAKING THE ADDITION IN THE ASSESSMENT MADE U NDER SECTION 153A READ WITH SECTION 143(3) WHEN NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH IN RESPECT OF THE ADDITION MAD E BY HIM. WE ACCORDINGLY PARTLY ALLOWED THE CROSS OBJECTIONS TAKEN BY THE AS SESSEE. ' ACIT VS. SHANTI KUMAR SURANA & ORS. IN IT(SS}A NOS. 12 TO 20 AND CO NOS. 13 TO 20 (REPORTED IN 44 CCH 241) ORDER DT. 22.06.2015(IT AT KOLKATA) IN VIEW OF THE FACTS IN. ENTIRETY AND THE LEGAL PR INCIPLES ENUNCIATED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHO USING CORPORATION (NHAVA SHEVA) LTD., SUPRA, OF HON'BLE ALLAHABAD HIG H COURT IN THE CASE OF SHAILA AGARWAL, SUPRA AND MUMBAI SPECIAL BENCH DECI SION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS, SUPRA, WE ARE OF THE VIEW T HAT THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH IN THE PRESENT CASE FOR THESE ASSESSMENT YEAR, EXCEPT THE STATEMENT IN HIS REMAND REPORT DATED 23.09.2011 AND DESPITE NUMBER OF OPPORTUNITIES REVE NUE COULD NOT PRODUCE ANY INCRIMINATING MATERIAL BEFORE THE BENCH AND THE ASSESSMENTS ARE ALREADY COMPLETED FOR THESE ASSESSMENT YEARS ORIGINALLY, TH E ASSESSMENT S FRAMED U/S. 153A OF THE ACT IS IN VALID AND HENCE, QUASHED . TRISHUL HITECH INDUSTRIES LTD VS. DCIT-CC-XI. IT(SS )A 84-86/KOL/2011 DT. 24.09.2014 (ITAT KOLKATA) ; FROM THE ABOVE VARIOUS DISCUSSIONS AND PRECEDENCE W E ARE OF THE CONSIDERED VIEW THAT ASSESSMENT IN THE IMPUGNED ASS ESSMENT YEARS HAVE BEEN COMPLETED U/ S 143(3) OF THE ACT. HENCE THE AS SESSMENT FOR THE CONCERNED ASSESSMENT YEAR DOES NOT ABATE. HENCE DE HORSE ANY INCRIMINATING MATERIAL, AO CANNOT MADE ANY ADDITION IN THESE CASES. ACCORDINGLY WE HOLD THAT ASSESSMENT U/S 153C OF THE ACT IN THESE CASES DE HORSE ANY INCRIMINATING MATERIAL IS NOT SUSTAINA BLE. HENCE WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DECID E THE ISSUE IN FAVOUR OF ASSESSEE . SINCE WE ARE QUASHING THE APPEALS ON JURISDICTION WE ARE NOT ADJUDICATING THE MERITS OF THE APPEAL AS THE SAME I S NOW ONLY OF ACADEMIC INTEREST. DCIT VS. MERLIN PROJECT LTD. IT(SS)A NO-138/KOL/201 1 DT. 14.11.2013 (ITAT KOLKATA) ; 'WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACT ABOUT THIS CASE IS THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3) IN WHI CH DEDUCT ION WAS ALLOWED IN ENTIRETY UNDER SECT ION 80IB OF THE ACT INTER ALIA ON THE AMOUNT OF INTEREST INCOME. IT IS ALSO UNDISPUTED THAT NO INCR IMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH CASTING DOUBT ABOUT THE ALLOWABILITY OR OTHERWISE OF SUCH DEDUCTION UNDER SECT ION 80IB. THIS FACT HA S BEEN FAIRLY ADMITTED BY ID. D.R. DURING THE COURSE OF PROCEEDINGS BEFORE US AS WELL. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ACI T VS. PRATIBHA INDUSTRIES (2013) 141 ITD 151 (MUM.) HAS HELD, INTER ALIA, THAT HAVIN G DONE ORIGINAL ASSESSMENT U/S 143(3), IF NO INCRIMINATING MATERIAL IS FOUND DURIN G THE COURSE OF SEARCH, THEN IT IS PERMISSIBLE TO MAKE ANY ADDITION IN THE ASSESSMENT UNDER SECTION 153A PURSUANT TO SEARCH ACTION. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF AL L CARGO GLOBAL LOGISTICS LIMITED VS. DCIT (2012) 137 ITD 217 (SB)( MUM.) HAS ALSO HELD TO THE SAME EXTENT . IN VIEW OF THE FOREGOING DISCUSSION, WE ARE OF THE CONSIDERED IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 7 OPINION THAT NO EXCEPTION CAN BE FOUND TO THE VIEW TAKEN BY CIT(APPEALS} FOR DECIDING THIS ISSUE IN ASSESSEE'S FAVOUR . BEFORE PARTING WITH THIS MATTER, WE WANT TO MAKE IT CLEAR THAT OUR DECISION IS BASED IN THE BACKDROP OF THE FACTS THAT THE DEDUCT ION UNDER SECT ION 80IB COULD NOT HAVE BEEN TINKERED WITH BECAUSE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH ON THIS ISSUE WHEN ORIGINAL ASSESSMENT AMOUN TING DEDUCT ION ON THIS ISSUE WAS COMPLETED UNDER SECTION 143(3). WE HAVE NOT EXP RESSED ANY OPINION ON THE MERITS OF THE CASE ABOUT THE ALLOWABILITY OR OTHERW ISE OF DEDUCT ION UNDER SECTION BOIB ON INTEREST INCOME ARISING THE PRESENT FACTS A ND CIRCUMSTANCES. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAN DS DISMISSED .' LMJ INTERNATIONAL LTD VS. DCIT(2008) 119 TTJ (KOT) 214. (ITAT KOLKATA) ; ' WHERE NOTHING INCRIMINATING IS FOUND IN THE COURSE OF SEARCH RELATING TO ANY ASSESSMENT YEARS, THE ASSESSMENTS FOR SUCH YEAR S CANNOT BE DISTURBED; ITEMS OF REGULAR ASSESSMENT CANNOT BE AD DED BACK IN THE PROCEEDINGS UNDER S. 153A/153C WHEN NO INCRIMINATIN G DOCUMENTS WERE FOUND IN RESPECT OF THE DISALLOWED AMOUNTS IN THE SEARCH PROCEEDINGS. FURTHERMORE, THE HON'BLE SUPREME COURT HAS DISMISSE D DEPARTMENT'S SPECIAL LEAVE PETITION (SLP) AGAINST THE JUDGMENT DT.06-07 -2015 OF THE DELHI HIGH COURT IN ITA NO.369 OF 2015 WHERE THE HIGH COURT HELD THAT NO SU BSTANTIAL QUESTION OF LAW AROSE SINCE THERE WAS FACTUAL FINDINGS THAT NO INCRIMINAT ING EVIDENCE RELATE TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH. THE A R HAS FILED A WRITTEN SUBMISSION ON THIS ISSUE WHICH IS AS UNDER: 'WHETHER SECTION 68 COULD BE INVOKED WHERE NO INCRI MINATING EVIDENCE RELATED TO SHARE CAPITAL FOUND. 7-12-2015 : THEIR L ORDSHIPS MADAN B LOKUR AND S A BOBDE JJ DISMISSED THE DEPARTMENT'S SPECIAL LEAVE PETITION AGAINST THE JUDGMENT DATED JULY 6, 2015 OF THE DELHI HIGH C OURT IN ITA NO.369 OF 2015, WHEREBY THE HIGH COURT HELD THAT NO SUBSTANTI AL QUESTION OF LAW AROSE SINCE THERE WAS A FACTUAL FINDING THAT NO INCRIMINA TING EVIDENCE RELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AND THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING SEC TION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CA PITAL PR. CIT V KURELE PAPER MILLS P LTD, SLP (C) NO.34554 OF 2015'. 7. THE AR HAS ALSO BROUGHT ON RECORD THE CASE LAW O F CIT, KOLKATA-III VS VEERPRABHU MARKETING LTD [2016] 73 TAXMANN 149 KOLKATA IN THIS CASE THE HONORABLE CALCUTTA HIGH COURT EXPRESSED THE FOLLOWING VIEWS: ' WE ARE IN AGREEMENT WITH THE VIEWS OF THE KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE-REQUISITE BEFORE PO WER COULD HAVE BEEN EXERCISED UNDER SECTION 153C READ WITH SECTION 153A . IN THE CASE BEFORE US, THE ASSESSING OFFICER HAS MA DE DISALLOWANCES OF THE EXPENDITURE, WHICH WERE ALREADY DISCLOSED, FOR ONE REASON OR THE OTHER. BUT SUCH DISALLOWANCES WERE NOT CONTEMPLATED BY THE PROVISIONS CONTAINED UNDER SECTION 153C READ WITH SECTION 153A . THE DISALLOWANCES MADE BY THE ASSESSING OFFICER WERE UP HELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELETED THOSE DISALLOWANCE S.' IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 8 THE HON'BLE KOLKATA HIGH COURT IN THE ABOVE CASES R ELIED ON THE FOLLOWING JUDGMENTS. CIT VS KABUL CHAWLA (2016) 380 ITR 0573(DEL) SEARCH AND SEIZURE-NEW SCHEME OF ASSESSMENT IN SEAR CH CASES- SEARCH WAS CARRIED OUT U/S 132 ON A LEADING REAL ES TATE DEVELOPER OPERATING ALL OVER INDIA AND SOME OF ITS GROUP COMP ANIES-SEARCH WAS ALSO CARRIED OUT IN THE PREMISES OF THE ASSESSEE-PURSUANT TO THE SEARCH A NOTICE U/S153A(1) WAS ISSUED TO ASSESSEE AND THEREAFTER HE FILED RETURNS- AS ON THE DATE OF THE SEARCH, NO ASSESSMENT PROCEEDINGS WERE PENDING FOR RELEVANT AY S AND FOR SAID AYS, ASSESSMENTS WAS ALREADY MADE U/S 143(1),ASSESSEE FI LED AN APPLICATION U/S 154 SEEKING RECTIFICATION OF THE ASSESSMENTS ON THE GRO UND THAT THE ACCUMULATED PROFITS OF THE COMPANIES PAYING THE DIVIDEND WERE LESS THAN THE AMOUNT OF LOAN OR ADVANCE GIVEN BY THEM TO THE RECIPIENT COMPANIES- AO DECLIN ED TO RECTIFY THE ASSESSMENTS- CIT ALSO HELD THAT ADDITION NEED NOT BE RESTRICTED ONLY TO THE SEIZED MATERIAL-ITAT ON APPEAL HOWEVER DELETED ADDITION ON GROUNDS THAT THE ADDITIONS MADE FOR RELEVANT AY'S U/S 2(22)(E} WERE NOT BASED ON ANY INCRIMINATI NG MATERIAL FOUND DURING SEARCH OPERATION AND SAME WAS NOT SUSTAINABLE IN LAW- ISSU E WAS WHETHER THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE FOR THE SAID AYS U/S 2(22)(E) WAS NOT SUSTAINABLE BECAUSE NO INCRIMINATING MATERIAL CONCE RNING SUCH ADDITIONS WERE FOUND DURING THE COURSE OF SEARCH AND FURTHER NO ASSESSME NTS FOR SUCH YEARS WERE PENDING ON THE DATE OF SEARCH-HELD, PRESENT APPEALS CONCERN ED AYS,2002-03, 2005-06 AND 2006-07-0N THE DATE OF THE SEARCH THE SAID ASSESSME NTS ALREADY STOOD COMPLETED- SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURIN G THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED-QUEST ION FRAMED BY THE COURT WAS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE-REVENUE'S APPEAL DISMISSED IT WAS ALSO INFORMED/BROUGHT ON RECORD THAT THE ORD ER PASSED BY THE HON'BLE CALCUTTA HIGH COURT HAS ATTAINED FINALITY AS THE CBDT IN IT' S LETTER NO.ADG(L&R)- II/EZ/PR.CIT(C)-1/KOLKATA/1184/2016/729 DT.07/08-02 -2017 HAS INTIMATED THAT THE PROPOSAL TO FILE SLP IN ABOVE CASE HAS NOT BEEN APP ROVED BY THE BOARD. APART FROM ABOVE MENTIONED CASE LAWS BROUGHT ON REC ORD, THE AR HAS ALSO FILED COPIES OF APPEAL ORDERS IN DIFFERENT CASES PASSED B Y MY THREE ESTEEMED PREDECESSORS ON THE SAME ISSUE WHEREIN THEY HAVE DI SCUSSED IN LENGTH AND ARRIVED AT CONCLUSION THAT ADDITIONS IN SEARCH ASSESSMENTS U/S 153AJ 153C CANNOT BE MADE EXCEPT ON THE BASIS OF THE INCRIMINATING MATERIAL F OUND IN THE SEARCH. (REFERENCE A) APPEAL NO.442/CC-3(1)/CIT(A)-21/14-15, DATE OF O RDER 05-12-2014, B) APPEAL NO.440/CC-3(1)/CIT(A)-21/14-15, DATE OF O RDER 15-01-2015 C) APPEAL NO.547/CC-3(1)/CIT(A)-21/14-15, DATE OF O RDER 10-04-2015 D) APPEAL NO. 129/CC-XVII/CIT(A)-21/9-10, DATE OF O RDER 23-09-2010 E) APPEAL NO.292/CC-VI/CIT(A)-C-VI/11-12, DATE OF O RDER 23-10-2013. I HAVE CONSIDERED THE FINDINGS OF THE AO IN THE ASS ESSMENT ORDER, DIFFERENT CASE LAWS BROUGHT ON RECORD AND APPEAL ORDERS PASSE D BY MY PREDECESSORS ON THIS LEGAL ISSUE. I FIND THAT IT SEEMS THAT DUR ING THE SEARCH AND SEIZURE OPERATIONS CONDUCTED U/S 132 OF THE I T ACT, 1961, IN THE CASE OF SRI BALAJI LOG PRODUCTS PVT LTD (SBLP) NO INCRIMINATING DOCUMENTS/ PAPERS RELATED/PERTAINING TO THE ASSESSEE WERE SEIZED. AT LEAST, ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 153C/143( 3) ARE NOT BASED ON ANY INCRIMINATING DOCUMENTS/PAPERS SEIZED DURING TH E SEARCH OPERATION UNDER IDENTIFICATION MARK SBLP-4. THERE WAS NEITHER ANY S EARCH NOR SURVEY IN THIS CASE. IT WOULD ALSO NOT BE OUT OF CONTEXT TO MENTIO N HERE THAT IN THIS CASE, ON THE DATE OF SEARCH, NO ASSESSMENT FOR THIS YEAR WAS PENDING. THEREFORE, IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 9 KEEPING IN VIEW THE RATIO DECIDED BY THE JURISDICTI ONAL BENCH OF KOLKATA TRIBUNAL IN CASES REFERRED ABOVE AND THE RATIO DECI DED BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD (SUPRA) IN THE LIGHT OF CBDT'S DECISION OF NOT FILING SLP IN THIS CASE IN T HE SUPREME COURT AND KEEPING IN VIEW THE APEX COURT'S DECISION TO DISMIS S SLP ON SIMILAR ISSUE IN THE CASE OF PR CIT VS KURELE PAPER MILLS PVT LTD : SLP (C) NO.34554 OF 2015 DT.07-12-2015, I AM OF THIS VIEW THAT IN ORDER TO M AINTAIN JUDICIAL CONTINUITY ON THIS ISSUE AND RESPECTFULLY FOLLOWING THE RATIO DEC IDED BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD (SUPRA), ASSESSEE'S APPEAL ON GROUNDS NO 1 AND 2 ARE ALLOWED. 5. IT HAS COME ON RECORD THAT THERE WAS NO INCRIMIN ATING MATERIAL FOUND OR SEIZED DURING THE COURSE OF THE IMPUGNED SEARCH DAT ED 21/22.11.2013. THIS CLINCHING FACT HAS GONE UNREBUTTED FROM THE REVENUE SIDE. WE THEREFORE HOLD THAT CIT(A) HAS RIGHTLY QUASHED THE IMPUGNED ASSESS MENT TO BE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING T HE CURSE OF SEARCH AS PER LAW SETTLED BY HON'BLE JURISDICTIONAL HIGH COURT IN VEER PRBHU MARKETING LTD. (SUPRA) AND OTHER JUDICIAL PRECEDENTS. 6. LEARNED CIT-DR NEXT PLACES ON RECORD THE RELEVAN T SATISFACTION DATED 16.03.2015 READING AS UNDER:- PRAKASH PLY CENTRE PVT. LTD. PAN: AADCP713 2J A.Y 208-09 TO 2013-14 AND A .Y 2014-15 16/03/15 A SEARCH & SEIZURE OPERATION WAS CONDUCTE D IN THE PRAKASH GROUP OF CASES ON 21/22-11-2013. THE ASSESSEE NAMED M/S PRAKASH PLY CENTRE PVT. LTD., IS CONNECTED WITH THIS GROUP. DURING THE CURSE OF SEARCH OPERATION, SEVERAL BOOKS OF ACCOUNT AND DOCUMENTS WERE FOUND AND SEIZE D SUCH AS SBLP/01 TO SBLP/05. ON PERUSAL OF THE SEIZED DOCUMENTS, SOME D OCUMENTS VIDE ID MARKED SBLP/04 ARE RELATED TO M/S PRAKASH PLY CENTRE PVT. LTD. THUS, IT IS REASON TO SATISFY THAT THIS CASE IS CON SIDERED TO BE A FIT CASE FOR ISSUING A NOTICE U/S.153C OF THE ACT. HENCE, ISSUED NOTICE U/ S.153C TO THE ASSESSEE FOR COMPLIANCE. 7. THE REVENUES CASE ACCORDINGLY IS THAT THE CIT(A ) HAS ERRED IN HOLDING THAT THE IMPUGNED ASSESSMENT(S) ARE ALSO INVALID ON ACCOUNT OF NO SATISFACTION HAVING BEEN RECORDED AT THE ASSESSING OFFICERS BEHEST. WE FIND THESE REVENUES ARGUMENTS TO BE NOT SUSTAINABLE SIN CE THE ASSESSING OFFICERS ABOVE EXTRACTED SATISFACTION NOTE HAS NOW HERE INDICATED THAT THE RELEVANT CATEGORY OF ASSETS OR BOOKS OF ACCOUNT ETC . BELONGS TO THE ASSESSEE / A THIRD PERSON THAN THAT SUBJECTED TO TH E SEARCH IN ISSUE. WE MAKE IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 10 IT CLEAR THAT THE LEGISLATURE HAS INCLUDED RELATES TO BY IN SEC. 153C WAY OF AN AMENDMENT BY THE FINANCE ACT, 2015 WITH EFFECT FROM 01.06.2015 WHEREAS THE SATISFACTION IN ISSUE WAS RECORDED MUCH EARLIER THA N THAT ON 16.03.2015. WE HOLD THAT THE CIT(A)S FINDINGS UNDER CHALLENGE TO THIS EFFECT DESERVE TO BE UPHELD. WE ORDER ACCORDINGLY. THE REVENUES APPEAL( S) IT(SS)A NO.24/KOL/2017 AND ITA NO.1313/KOL/2017 FOR ASSESSM ENT YEAR(S) 2009-10 AND 2011-12 FAIL ACCORDINGLY. THE ASSESSEES CROSS OBJECTION(S) CO NO.79 & 81/KOL/2017 ARE DISMISSED AS NOT PRESSED IN VIEW OF THE LEARNED COUNSEL FAIR STATEMENT MADE AT THE BAR DURING THE COURSE OF HEAR ING. 8. WE NOW COME TO THE TAXPAYERS APPEAL IT(SS)A NO. 07/KOL/2017 RAISING THE LATTER ISSUE OF DISALLOWANCE OF SEC. 35(1)(II) DEDUCTION ON ACCOUNT OF ITS CONTRIBUTION MADE TO THE SCHOOL OF HUMAN GENATICS AND POPULATION HEALTH . BOTH THE LOWER AUTHORITIES HOLD THE ABOVE RECIPIENT ORGANISATION TO BE ENGAGED IN ACCOMMODATION ENTRY PROVIDING BUSINESS THAN CARR YING OUT ANY SCIENTIFIC RESEARCH AND DEVELOPMENT. LEARNED CIT-DR REFERS TO THE LOWER AUTHORITIES RESPECTIVE FINDINGS IN SEEKING TO CONFIRM THE IMPUG NED DISALLOWANCE. WE FIND NO SUBSTANCE IN REVENUES INSTANT PLEA SINCE THIS T RIBUNALS CO-ORDINATE BENCH DECISION IN ITA NO.S 341-342/KOL/2019 M/S SHYAM SUNDER CO. JEWELLERS VS. ACIT, CIRCLE-2(2), KOLKATA DECIDED ON 26.04.2016 DELETES THE VERY DISALLOWANCE IN CASE OF THE ABOVE STATED RECIPIENT ITSELF IN ASSESSMENT YEARS 2013-14 AND 2014-15 AS UNDER:- 6. GROUND NO.2 TO 4 FOR THE ASSESSMENT YEAR 2013-1 4 AND GROUND NO.2 TO 4 FOR THE ASSESSMENT YEAR 2014-15 ARE ON THE ISSUE OF DISALLO WANCE OF CLAIM OF DEDUCTION U/S 35(1)(II) OF THE ACT OF DONATIONS GIVEN TO SHG &PH. THE ASSESSING OFFICER DISALLOWED THE CLAIM ON THE GROUND THAT SURVEY WAS CONDUCTED O N SHG &PH AND IT CAME TO LIGHT THAT THE DONATIONS RECEIVED BY CHEQUE/RTGS WERE RET URNED IN CASH TO THE DONORS. 7. SIMILAR ISSUES ON IDENTICAL FACTS AND ARGUMENTS WERE CONSIDERED BY DIFFERENT BENCHES OF THE TRIBUNAL WHICH ARE AS UNDER. 7.1 THE HONBLE KOLKATA ITAT, B BENCH IN THE CASE O F TUSHAR CHAWDA, IN ITA NO.2362/KOL/2017 DATED 21.03.2018 HAS HELD AS FOLLO WS: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-9, KOLKATA RELATING TO A.Y. 2014-15. 2. IN THIS CASE THE ASSESSEE HAD PAID AN AMOUNT OF RS.15,00,000/- AS DEDUCTION U/S 35(1)(II) OF THE I.T.ACT, 1961 (ACT) TO SCHOOL OF HUMAN GENETICS IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 11 AND POPULATION HEALTH AND CLAIMED WEIGHTED DEDUCTIO N U/S 35 OF THE ACT [ 175% OF 1500000 ] AMOUNTING TO RS.26,25,000/- FROM INCOME UNDER THE HEAD BUSINESS. 3. THE AO REJECTED THIS CLAIM BY OBSERVING AS FOLL OWS :- FROM THE SUBMISSIONS OF THE ASSESSEE, IT IS CLEAR THAT THE ASSESSEE MADE THE DONATION WITH A MOTIVE TO GET A HUGE DEDUC TION FROM BUSINESS INCOME ONLY TO REDUCE THE TOTAL INCOME FOR AVOIDING THE PAYMENT OF TAX. FURTHER, THE .ASSESSEE HAS FAILED T O SUBSTANTIATE THE PAYMENT OF DONATION SATISFACTORILY. IT IS CLEAR THA T THE DONATION, MADE BY THE ASSESSEE, WAS A BOGUS PAYMENT AND TO GET SOM E BENEFIT FOR WHICH THE ASSESSEE CHOSE THIS PARTICULAR ORGANIZATI ON AND PARTICULAR FY. THE ASSESSEE MUST HAVE GOT SOME BENEFIT IN LIEU OF DONATION PAYMENT OF RS.15,00,000/-. HENCE, THE WEIGHTED DEDU CTION CLAIMED U/S.35 AMOUNTING TO RS. RS.26,25,000/- FROM INCOME UNDER THE HEAD BUSINESS IS DISALLOWED AND ADDED TO THE TOTAL INCOM E OF THE ASSESSEE FOR THE AY 2014-15. 4. THE LD. CIT(A) HAD REJECTED THE CONTENTIONS OF T HE ASSESSEE BY OBSERVING AS FOLLOWS :- 4.1. 1 HAVE CONSIDERED THE SUBMISSION OF THE APPELL ANT AND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE M/S SCHOOL OF GENETICS AND POPULATION HEALTH, KOLKATA HAD BEEN GRANTED APPROVA L U/S 35(1)(II) OF THE I.T ACT, 1961 VIDE NOTIFICATION NO. 4/201O/F. O . 203/64/2009/ITAT DATED 28.01.2010 IN THE OFFICIAL GAZETTED BY THE CE NTRAL GOVERNMENT. ANY EXPENDITURE TO SUCH NOTIFIED .INSTITUTION WHICH HAS AS ITS OBJECT THE UNDERTAKING OF SCIENTIFIC RESEARCH IS ELIGIBLE FOR WEIGHTED DEDUCTION EQUAL ONE AND THREE FOURTH TIMES OF ANY SUM PAID. HOWEVER, THE MINISTRY OF FINANCE (DEPARTMENT OF REV ENUE ) (CENTRAL BOARD OF DIRECT TAXES) VIDE NOTIFICATION NO. 82/201 6/F.NO. 203/64/2009/IT A.I1 DATED 15.09.2016 IN THE GAZETTE OF INDIA: EXTRA ORDINARY HAD RESCINDED THE NOTIFICATION GRANTING AP PROVAL BY THE CENTRAL GOVERNMENT TO THE APPELLANT FOR THE PURPOSE OF CLAUSE (II) OF SUB SECTION (1) OF SECTION 35 OF THE I.T. ACT, 1961 , READ WITH RULE 5C AND 5E OF THE INCOME TAX RULE, 1962. THE NOTIFICATI ON READS AS FOLLOWS: '' MINISTRY OF FINANCE, (DEPARTMENT OF REVENUE) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION NEW DELHI, THE 15TH SEPT EMBER, 2016, S.O. 2961(E)-IN EXERCISE OF THE POWERS CONFERRED UNDER C LAUSE (II) OF SUB- SECTION (1) OF SECTION 35 OF THE INCOME-TAX ACT, 19 61 READ WITH RULE 5E AND 5E OF THE INCOME-TAX RULES, 1962, THE CENTRAL G OVERNMENT HEREBY RESCINDS THE NOTIFICATION OF THE GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE NUMBER 4/2010 DATED 28.01.2010 PUBLISHED IN GAZETTE OF INDIA , PART 11, SECTION 3, SUB-SECTION (II) DATED 28.01.2010 VIDE S.O. 348 WITH EFFECT FROM 1ST APRIL, 2007 AND SHALL BE DEEMED THAT THE SAID NOTIFICATION HAS NOT BEEN ISSUED FOR ANY TAX BENEFITS UNDER THE INCOME-TAX ACT, 1961 OR ANY OTHER LAW OF THE LIME BEING IN FORCE [ NOTIFICATION NO. 82/2016/F.NO.203/64/2009/ITA- LL ] DEEPSHIKHA SHARMA, DIRECTOR.' THE ABOVE NOTIFICATION MAKES CLEAR THAT THE EARLIER NOTIFICATION. NO. 4/2010 DATED 28.01.2010 SHALL BE DEEMED NOT TO HAVE BEEN ISSUED FOR ANY INCOME- TAX BENEFITS UNDER THE INCOME-TAX ACT. THEREFORE, THE PAYMENT OF RS.15,00,000/- FOR THE PURPOSE OF AVAILI NG WEIGHTED IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 12 DEDUCTION OF 175% U/S 35(1)(II) OF THE ACT MADE TO M/S SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, KOLKATA IS DE NIED. IT MAY BE CLARIFIED HERE THAT EXPLANATION TO SECTION 35(L)(II I) OF THE INCOME-TAX ACT SHALL NOT COME TO THE RESCUE OF THE APPELLANT AS IT RELATES, ONLY TO APPROVALS WHICH HAVE BEEN WITHDRAWN SUBSEQUENT TO T HE PAYMENT MADE TO INSTITUTIONS TO WHICH CLAUSE (II) OR CAUSE (III) APPLIES. IN THE CASE OF M/S SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, KOLKATA, THE NOTIFICATIONS HAD BEEN DEEMED NOT TO H AVE BEEN ISSUED FOR ANY TAX BENEFITS UNDER THE INCOME-TAX ACT, 1961 OR ANY OTHER LAW OF THE TIME BEING IN FORCE. THOUGH THE APPELLANT MADE A DONATION OF ONLY RS.15, ,00,000/-, HOWEVER, HE HAS CLAIMED U/S 35(1)(I) AND (II) WEIGH TED DEDUCTION AMOUNTING TO RS.26,25,,000/- FROM HIS RETURN INCOME . THE DISALLOWANCE IS, THEREFORE, RESTRICTED TO THE DEDUC TION CLAIMED AT RS.26,25,,000/-. 5. AFTER HEARING RIVAL CONTENTIONS, I AM OF THE VIE W THAT THE ASSESSEE CANNOT SUFFER ON ACCOUNT OF WITHDRAWAL OF NOTIFICAT ION GIVEN TO M/S. SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, KOL KATA GRANTING APPROVAL U/S 35 (1) (II) OF THE ACT. THIS RECOGNITI ON WAS ORIGINALLY GRANTED ON 28TH JANUARY, 2010 AND RENEWED ON 17TH J UNE, 2010 BY GOVERNMENT OF INDIA. MINISTRY OF SCIENCE AND TECHNO LOGY. IN RESPONSE TO LETTER DATED 03.02.2014 GIVEN BY M/S. SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, TO THE ASSESSEE, DONATION OF RS.15,00,000/- WAS MADE ON 31.03.2014 BY THE ASSESSEE. THE SAID AM OUNT WAS GIVEN TO THE DONEE ON 31.03.2014 AND WITHDRAWAL WAS ON 15.09.2016. I.E. AFTER 17 MONTHS FROM THE DATE OF DONATION MADE IN MARCH, 2014. SUCH WITHDRAWAL IN MY VIEW CANNOT TAKE AWAY THE VES TED RIGHT OF THE ASSESSEE FOR CLAIMING DEDUCTION UNDER SECTION 35 (1 ) OF THE ACT. 7.2 THE TRIBUNAL IN THE CASE OF RAJDA POLYMERS VIDE ITA NO.333/KOL/2017 ORDER DATED 08.11.2017 AT PAGE 7 HAS HELD AS FOLLOWS:- 5.6. WE FIND THAT THE LD CITA HAD MADE AN OBSERVAT ION WHICH HAS BEEN HEAVILY RELIED UPON BY THE LD DR THAT THE ASSESSEE S LINE OF BUSINESS HAS GOT NOTHING TO DO EVEN REMOTELY WITH THE HEALTHCARE OR HERBAL HEALTHCARE INDUSTRY MUCH LESS IN THE AREA OF RESEARCH THEREON AND ACCOR DINGLY THERE WAS NO NEED FOR THE ASSESSEE TO GIVE DONATION OF RS 14,00,000/- TO HHBRF . WE FIND THAT THIS ASPECT HAS BEEN DULY ADDRESSED BY THE ASSESSEE BY STATING THAT ONE CARDIOLOGIST DOCTOR HAD INTRODUCED THE ASSESSEE TO HHBRF AND DONATIONS WERE GIVEN AFTER DUE SATISFACTION OF THE ASSESSEE B ASED ON PERSONAL VISITS TO THE TWO RESEARCH CENTRES OF HHBRF AND ACTIVITIES CA RRIED ON BY THEM. MOREOVER, IT IS WELL SETTLED THAT IT IS ALWAYS THE PREROGATIVE OF THE ASSESSEE TO GIVE OR NOT TO GIVE ANY DONATION TO A PARTICULAR IN STITUTION, WHICH WISDOM CANNOT BE QUESTIONED BY THE REVENUE. THE QUESTION O F BUSINESS EXPEDIENCY OF AN EXPENDITURE HAD TO BE VIEWED FROM THE POINT O F VIEW OF THE BUSINESSMAN AND NOT FROM THE VIEW POINT OF THE REVENUE. THE BUS INESSMAN KNOWS HIS INTEREST BEST. HOWEVER, IT CANNOT BE DENIED THAT TH IS DONATION PAID TO HHBRF IS FREE FROM ANY SUSPICION. IT DEFINITELY LEADS TO FURTHER PROBE BY THE REVENUE, WHICH HAS BEEN CARRIED OUT BY THE REVENUE BY SUMMON ING THE DIRECTOR OF HHBRF. THE SAID DIRECTOR SHRI SWAPAN RANJAN DASGUPT A, THOUGH COULD NOT APPEAR IN PERSON BEFORE THE LD AO FOR CROSSEXAMINAT ION (WHICH WAS SOUGHT BY THE ASSESSEE) BUT HAD CONFIRMED IN WRITING THAT THE DONATIONS GIVEN BY THE ASSESSEE TO HHBRF WERE GENUINE IN NATURE AND HAD FU RTHER CONFIRMED THAT IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 13 HHBRF HAD NOT PAID ANY CASH BACK TO ASSESSEE IN LIE U OF CHEQUE DONATIONS PAID TO THEM. THE REVENUE HAD LEFT THE MATTER AT TH IS STAGE ITSELF AND DID NOT FURTHER PROBE INTO IT TO CHECK THE VERACITY OF THE CONFIRMATION MADE BY SHRI SWAPAN RANJAN DASGUPTA. THEREFORE, THE LD AO PROCEE DED TO MAKE THE ADDITION ONLY BASED ON THE STATEMENT RECORDED FROM SWAPAN RANJAN DASGUPTA AT THE TIME OF SURVEY. IT MAY BE TRUE THAT IN THE SAID STATEMENT, SWAPAN RANJAN DASGUPTA MAY HAVE DEPOSED TO THE FACT THAT HHBRF WERE IN RECEIPT OF VARIOUS DONATIONS FROM VARIOUS PERSONS I N CHEQUES AND THE SAME WERE ROUTED BACK TO THE DONORS IN CASH AFTER RETAIN ING CERTAIN PORTION AS THEIR COMMISSION AND INTERMEDIARIES COMMISSION. THIS IS ONLY A GENERAL STATEMENT GIVEN BY SWAPAN RANJAN DASGUPTA ABOUT THE MODUS OPE RANDI CARRIED OUT BY HHBRF. BUT NOWHERE IN THE SAID STATEMENT OR IN THE SUBSEQUENT ENQUIRES / INVESTIGATION, IT CAME TO LIGHT THAT THE ASSESSEE H EREIN HAD INDEED RECEIVED BACK THE CASH IN LIEU OF CHEQUE DONATIONS GIVEN TO HHBRF. THIS SERVES AS A CLINCHING MISSING EVIDENCE IN THE ENTIRE GAMUT OF T HIS CASE. 7. RESPECTFULLY APPLYING THE PROPOSITION OF LAW LAI D DOWN IN THIS CASE LAW TO THE FACTS OF CASE ON HAND AND AS THE DONATION TO SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH WAS MADE WHILE IT WAS HOLDIN G THE APPROVAL IN QUESTION, WE DIRECT THE AO TO GRANT THE SAID DEDUCT ION AS CLAIMED. IN THE RESULT THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSES SEE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 7.3 THE KOLKATA ITAT IN THE CASE OF ZENITH CREDIT C ORPORATION IN ITA NO.718/KOL/2018 PRONOUNCED ON 20TH JULY, 2018 HELD AS FOLLOWS:- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATA, ( HEREINAFTER THE LD. CIT(A)), DT. 23/02/2017, PASSED U/S 250 OF THE INC OME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEA R 2014-15, ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE LD. CIT(APPEALS) WAS WRONG AND UNJ USTIFIED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S 35(1)(II) OF RS.3,50, 000/- ON THE DONATION OF RS.2,00,000/- MADE TO SCHOOL OF HUMAN GENETICS & PO LLUTION HEALTH WITHOUT PROPERLY APPRECIATING THE SUBMISSION OF THE APPELLA NT. THE COURT DECISIONS CITED BY THE LD. CIT(APPEALS) ARE NOT APPLICABLE IN THE FACTS OF THE APPELLANTS CASE. 2. FOR THAT THE APPELLANT CRAVES LEAVE TO ALTER, AM END, MODIFY ANY OF THE GROUNDS AND/OR TAKE ADDITIONAL GROUND BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 2. HEARD BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT FROM THE STATEMENT RECORDED AND RELIED UPON BY THE ASSESSING OFFICER OF SHRI AV IJIT SINHA ROY, IT IS CLEAR THAT HE STATED THAT AFTER FEBRUARY, 2011, HE LEFT T HIS ACTIVITY OF PROVIDING BOGUS DONATIONS FOR COMMISSION. HE DREW THE ATTENTION OF THE BENCH TO PAGE 3 PARA 6.6. OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE DONATION IN QUESTION WAS MADE ON 03/06/2014. THUS, HE SUBMITS THAT RELIANCE PLACED ON THIS STATEMENT OF SHRI AVIJIT SINHAR ROY, FOR MAKING THIS ADDITION , IS WRONG. HE FURTHER SUBMITS THAT NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE FO R CROSS-EXAMINATION OF THE PERSONS ON WHOSE STATEMENTS THE REVENUE RELIED UPON TO MAKE THIS ADDITION. HE SUBMITTED THAT UNDER SIMILAR CIRCUMSTANCES THE K OLKATA SMC BENCH OF IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 14 THE TRIBUNAL IN THE CASE OF TUSHAR CHAWDA VS ITO IN ITA NO. 2362/KOL/2017 , ORDER DT. 21/03/2018, AND THE KOLKATA B BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. MACO CORPORATION INDIA (P) LTD. IN ITA NO. 378/KOL/2017 , ORDER DT.13/04/2018, ADJUDICATED THE ISSUE IN FAVOUR OF T HE ASSESSEE. 2.1. THE LD. D/R, ON THE OTHER HAND SUBMITTED THAT STATEMENTS WERE RECORDED FROM KEY PERSONS OF THE TRUST AND IN THESE STATEMEN TS, THESE PERSONS HAVE ADMITTED THAT SUCH ACCOMMODATION ENTRIES WERE PROVI DED FOR DONATIONS. HE SPECIFICALLY REFERRED TO QUESTION NO. 12 AT PAGE 7 OF THE ASSESSMENT ORDER, WHEREIN, SMT. SAMADRITA MUKHERJEE SARDAR, SECRETARY OF THE SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, HAD ADMITTED TO SUCH BOGUS ENTRIES. HE FURTHER REFERRED TO PAGES 11 OF THE ASSESSMENT O RDER AND SUBMITTED THAT SHRI AVIJIT SINHA ROY HAD SPECIFICALLY STATED THAT THIS AMOUNT OF RS.2 LAKHS FROM M/S. ZENITH CREDIT CORPORATION WAS A BOGUS TRA NSACTION. IN HIS REJOINDER, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, WH EN SHRI AVIJIT SINHA ROY HAS IN HIS SWORN STATEMENT STATED THAT HE HAS LEFT HIS WORK OF PROVIDING BOGUS DONATIONS FAR BACK IN THE YEAR 2011 AND HENCE, THE QUESTION OF HIS ARRANGING THESE DONATIONS IN THE YEAR 2014, DOES NOT ARISE. H E FURTHER POINTED OUT FROM THE STATEMENT AT PAGE 11 OF THE ASSESSMENT ORDER, I T IS CLEAR THAT THE LIST WAS PREPARED BY THE REVENUE AUTHORITIES AND THAT SHRI A VIJIT SINHA ROY HAS SIMPLY SIGNED THE LIST BY NOTING THAT HE HAS SEEN THE LIST . HE SUBMITTED THAT THE LIST CANNOT BE TAKEN AS EVIDENCE. HE SUBMITTED THAT OPPO RTUNITY OF CROSS- EXAMINATION HAS NOT BEEN PROVIDED IN THIS CASE AND HENCE NO RELIANCE CAN BE PLACED ON THE STATEMENTS, BASED ON WHICH THE REVENU E AUTHORITIES TO MAKE THIS ADDITION. 3. AFTER HEARING RIVAL CONTENTIONS, PERUSING THE PA PERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE-LAW CITED, I HOLD AS FOLLOWS:- I FIND THAT IN THE STATEMENT RECORDED FROM SHRI AVI JIT SINHA ROY U/S 131 OF THE ACT, ON 13/04/2015 HE STATES THAT AFTER THE MONTH O F FEBRUARY, 2011, HE LEFT THIS BOGUS DONATION WORK. ON THE OTHER HAND, HE HAS SIGNED A DECLARATION ON 30/07/2015. THE LIST PREPARED BY THE REVENUE WAS SI GNED WITH A REMARK THAT HE HAS SEEN THE LIST. THERE IS A CONTRADICTION IN T HESE TWO. IN SUCH CIRCUMSTANCES, IT HAS TO BE SEEN AS TO WHICH IS COR RECT. NO OPPORTUNITY OF CROSS-EXAMINING SHRI AVIJIT SINHA ROY HAS BEEN PROV IDED TO THE ASSESSEE. HENCE THE DECLARATION AS WELL AS THE STATEMENT CANN OT BE THE BASIS OF ADDITION. SIMILARLY, THE STATEMENT OF THE KEY PERSO NS OF THE TRUST CANNOT BE THE BASIS OF ADDITION AS NO CROSS-EXAMINATION OF WITNES S WAS PROVIDED. NO PROOF OF MONEY BEING RETURNED IS AVAILABLE WITH THE REVEN UE. 3.2. SIMILAR VIEW WAS TAKEN BY THE B BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. MACO CORPORATION (INDIA) PVT. LTD. IN ITA NO. 16/KOL/2017; ASSESSMENT YEAR 2013-14, ORDER DT. 14/03/2018. 4. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE ALLOW THIS APPEAL OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO GRANT THE NECESSARY DEDUCTIONS. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 7.3 WE ALSO FIND THAT SIMILAR ISSUE CAME UP BEFORE THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SAIMED INNOVATION VS ITO IN ITA NO. 2231/KOL/2016 FOR ASST YEAR 2013-14 DATED 13.9.2017, WHEREIN IT WAS HELD A S UNDER:- IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 15 9. WE NOTE THAT THE SOLE BASIS FOR MAKING THE ADDI TION IS ON THE BASIS OF THE STATEMENT RECORDED ON OATH DURING SURVEY AT M/S. HE RBICURE OF SHRI SWAPAN RANJAN DASGUPTA, OTHER THAN THE SAID STATEMENT THER E IS NO OTHER EVIDENCE TO SHOW THAT THE ASSESSEE HAS RECEIVED BACK THE DONATI ON AS SUGGESTED IN HIS GENERAL STATEMENT ABOUT PROVIDING ACCOMMODATION ENT RY BY SHRI SWAPAN RANJAN DASGUPTA. WE ALSO NOTE THAT THE SAID SHRI SW APAN RANJAN DASGUPTA HAS NOT STATED ANYWHERE THAT THE ASSESSEE INDULGED IN BOGUS DONATION OR THAT THE AMOUNT DONATED TO IT (M/S. HERBICURE) WAS GIVEN BACK TO THE ASSESSEE AFTER DEDUCTING THE COMMISSION. WE NOTE THAT THE ST ATEMENT RECORDED ON OATH DURING SURVEY CANNOT BE THE SOLE BASIS FOR MAKING T HE DISALLOWANCE AS DECIDED BY THE HON'BLE SUPREME COURT IN CIT VS. S. KADER KHAN SON (2013) 352 ITR 480 (SC). IN ANY CASE, IF THE AO WAS OF THE OPINION THAT THE STATEMENT OF SHRI SWAPAN RANJAN DASGUPTA, THE FOUND ER DIRECTOR OF M/S. HERBICURE HAS ADVERSELY AFFECTED THE VERACITY OF TH E DONATION MADE BY THE ASSESSEE THEN HE WAS DUTY BOUND TO SUMMON SHRI SWAP AN RANJAN DASGUPTA AND ALLOWED THE ASSESSEE TO HAVE CROSS EXAMINED HIM , FAILING WHICH THE STATEMENT OF SHRI SWAPAN RANJAN DASGUPTA COULD NOT BE USED AGAINST THE ASSESSEE TRUST AS HELD BY THE HON'BLE SUPREME COURT IN ANDAMAN TIMBERS LTD. VS. COMMISSIONER OF CENTRAL EXCISE 62 TAXMAN 3. WE NOTE THAT THE AO HAD IN FACT, RECORDED THE F ACT THAT THE PARTNERS OF THE ASSESSEE FIRM DESIRED TO CROSS EXAMINE THE FOUNDER DIRECTOR OF M/S. HERBICURE SHRI SWAPAN RANJAN DASGUPTA REGARDING THE PURPORTED DEPOSITION MADE AT THE TIME OF SURVEY. HOWEVER, AO DID NOT GRA NT HIM THAT OPPORTUNITY TO CROSS EXAMINE SHRI SWAPAN RANJAN DASGUPTA. WE ALSO NOTE THAT THE AO ISSUED NOTICE U/S. 131 OF THE ACT TO THE PARTNERS O F THE ASSESSEE FIRM AND HAS RECORDED THEIR STATEMENT ON OATH ON 28.12.2015. WE NOTE FOR QUESTION NO. 14 AS TO HOW THE PARTNER KNEW ABOUT M/S. HERBICURE, TH E PARTNER OF THE ASSESSEE FIRM HAS ANSWERED THAT DR. BHUBAN CHAKRABORTY, A CA RDIOLOGIST FRIEND INTRODUCED THEM TO M/S. HERBICURE AND TO QUESTION N O. 15 AS WHETHER THE PARTNERS HAVE VISITED THE OFFICE OF M/S. HERBICURE TO WHICH THE PARTNERS ANSWERED THAT THEY HAD VISITED THE PREMISES OF M/S. HERBICURE ON TWO OCCASIONS AND FOR QUESTION NO. 16 AS TO WHETHER THE PARTNERS WERE SATISFIED WITH THE WORK OF SCIENTIFIC RESEARCH CARRIED ON BY THE SAID M/S. HERBICURE, THE PARTNERS OF THE ASSESSEE FIRM HAD REPLIED THAT DURI NG THEIR VISIT AT PAILAN AND BARAL THEY WERE SATISFIED WITH THE SCIENTIFIC RESEA RCH WORK AND FOR QUESTION NO. 17 THE PARTNERS REPLIED THAT THEY HAD SEEN THE CERT IFICATE ISSUED BY GOVT. OF INDIA AND ALSO HAVE GONE THROUGH THE RESEARCH PAPER OF THE PEOPLE WORKING THERE. FOR QUESTION NO. 20 THEY HAVE GIVEN THE NAME OF THE DOCTOR WHO WAS A CARDIOLOGIST WHO INTRODUCED THEM TO M/S. HERBICURE. WE NOTE THAT THE AO ENQUIRED ABOUT DR. BHUBAN CHAKRABORTY'S ADDRESS FOR WHICH THE PARTNER REPLIED THAT THE DOCTOR RESIDES AT KSHUDIRAM SARANI , RATHTALA, KOLKATA. FOR QUESTION NO. 21 AS TO WHETHER THEY KNEW ABOUT THE D IRECTORATE OF INVESTIGATION, KOLKATA CARRIED OUT SURVEY U/S. 133A AND THAT ITS INVESTIGATION IS FOUND THAT THE ACTIVITIES WERE NOT GENUINE, THE PAR TNERS REPLIED THAT THEY WERE NOT AWARE OF THE SURVEY, HOWEVER, THEY ADDED THAT A FTER THEIR VISIT OF THE TWO CENTERS THEY WERE ON A BONAFIDE BELIEF THAT M/S. HE RBICURE WAS A COMPETENT INSTITUTE AND BASED ON THE RECOMMENDATION OF THE CA RDIOLOGIST DR. BHUBAN CHAKRABRTY THEY MADE DONATION TO THE SAID CONCERN. WE ALSO NOTE THAT THE AO ISSUED SUMMONS TO SHRI SWAPAN RANJAN DASGUPTA WHO D ID NOT APPEAR FOR CROSS EXAMINATION DUE TO ILL HEALTH BUT THE SAID SH RI DASGUPTA CONFIRMED THE DONATIONS MADE BY THE ASSESSEE FIRM TO M/S. HERBICU RE IN WRITING TO THE AO AND CLEARLY STATED THAT NO MONEY WAS REFUNDED BACK TO ASSESSEE FIRM, WHICH FACT HAS BEEN REPRODUCED BY THE AO AT PAGE 7 OF HIS ORDER AS UNDER: IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 16 'SHRI SWAPAN RANJAN DASGUPTA, DIRECTOR OF M/S HERBI CURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION HAD FILED A LETTER O N 28/01/2016 STATING 'REFERRING TO THE ABOVE AND YOUR COMMENTS O N MY REPLY DATED 22.01.2016, I WOULD FURTHER REQUEST YOUR GOOD OFFIC E TO ELABORATE THE FINANCIAL YEARS IN QUESTION TO ENABLE OUR ACCOUNTS DEPTT FOR VERIFICATION AND SUBMISSION. HOWEVER, WE APPARENTLY OBSERVE FROM OUR RECORDS THA T FOLLOWING DONATIONS WERE RECEIVED BY US FROM M/S. SAIMED INNOVATION, TH E ASSESSEE IN THE FINANCIAL YEARS MENTIONED AGAINST EACH: FYS AMOUNT MODE OF TRANSACTION DATE RECEIPT NO. 2012- 13 7,51,000/- RTGS:UTR NO. BARBH 13074606758 15.03.2013 HHBHRF/15-03-13/004 2012-13 7,51,000/- RTGS:YTR BI, VARVG 13985899500 26.03.2013 HHBHRF/26-03-13/004 FURTHER, IT IS SUBMITTED FOR YOUR KIND RECORD THAT NO MONEY WAS REFUNDED TO THE ABOVE NAMED ASSESSEE AGAINST DONATIONS GIVEN BY THEM. MEANTIME, I MAY SUBMIT THAT I AM CRITICALLY INDISPO SED DUE TO ACUTE LUMBER SCOLIOSIS AND AM NOT ABLE TO MOVE. I AM UNDER STRICT MEDICAL SUPERVISION. AS SUCH, MY PERSONAL APPEARANCE MAY KINDLY BE WAIVED ON COMPASS IONATE GROUND. I AM ATTACHING THE CURRENT MEDICAL PRESCRIPTION/ADVICE A LONG WITH MRI REPORTS FOR YOUR KIND RECORD. HOWEVER, THE INFORMATION AS SUBMITTED ABOVE MAY PLE ASE RECORDED AS MY WITNESS.' 10. THUS WE NOTE FROM THE ENTIRE FACTS AND CIRCUMST ANCES, THAT THE AO GOT SWAYED AWAY WITH THE STATEMENT RECORDED ON OATH OF MR. SWA PAN RANJAN DASGUPTA DURING SURVEY CONDUCTED AT THE PREMISES OF M/S. HERBICURE. WE HAVE REPRODUCED QUESTION NO. 22 AND 23 AND ANSWERS GIVEN BY SHRI SWAPAN RANJ AN DASGUPTA, WHEREIN HE ADMITS TO PROVIDE ACCOMMODATION ENTRIES IN LIEU OF CASH. THIS INFORMATION WE SHOULD SAY CAN BE THE TOOL TO START AN INVESTIGATION WHEN THE ASSESSEE MADE THE CLAIM FOR WEIGHTED DEDUCTION. THE GENERAL STATEMENT OF SHRI S WAPAN RANJAN DASGUPTA AGAINST DONATION MADE THE CLAIM OF ASSESSEE FOR DEDUCTION S USPICIOUS. HOWEVER, WHEN THE AO INVESTIGATED, SHRI SWAPAN RANJAN DASGUPTA HAS CO NFIRMED THAT M/S. HERBICURE WAS IN RECEIPT OF THE DONATION AND IT HAS NOT GIVEN ANY REFUND IN CASH, THEN THE SOLE BASIS OF DISALLOWANCE OF CLAIM AS A MATTER OF FACT DISAPPEARED. IT SHOULD BE REMEMBERED SUSPICION HOWSOEVER STRONG CANNOT TAKE T HE PLACE OF EVIDENCE. THE CONFIRMATION FROM SHRI SWAPAN RANJAN DASGUPTA FORTI FIES THE CLAIM OF THE ASSESSEE FOR WEIGHTED DEDUCTION U/S. 35(1)(II) OF THE ACT. T HE SOLE BASIS OF THE ADDITION/DISALLOWANCE BASED ON STATEMENT RECORDED O N OATH DURING SURVEY CANNOT BE ALLOWED AS HELD BY HON'BLE SUPREME COURT IN KADER K HAN & SONS (SUPRA). MOREOVER, WE NOTE THAT IF THE AO WAS HELL BENT DETERMINED TO DISALLOW THE CLAIM OF THE ASSESSEE, THEN HE SHOULD HAVE GRANTED AN OPPORTUNIT Y TO CROSS EXAMINE SHRI SWAPAN RANJAN DAS GUPTA AND SHRI KISHAN BHAWASINGKA AS HELD BY HON'BLE SUPREME COURT IN ANDAMAN TIMBER (SUPRA). 11. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMS TANCES, WE CANNOT SUSTAIN THE ORDER OF THE AUTHORITIES BELOW. THEREFORE, WE SET ASIDE T HE IMPUGNED ORDER AND DIRECT THE AO TO ALLOW THE DEDUCTION OF RS.26,28,500/- U/S. 35 (1)(II) OF THE ACT. 12. IN THE RESULT, APPEAL OF ASSESSEE IS ASSESSEE I S ALLOWED . IT(SS)A NO.24-25 & 07/KOL/2017, ITA 1313-1314/KOL/2 017 AYS 09-10 TO 13-14 ACIT CC-3(3) KOL VS. M/S PRAKASH PLY CENTRE PVT. LTD. PAGE 17 8. THE FACTS OF THIS CASE AS IDENTICAL WITH THE FAC TS OF THIS CASE DECIDED BY THE ITAT CITED ABOVE. COPY OF THE STATEMENTS WAS NOT CONFRON TED TO THE ASSESSEE. NO EVIDENCE OF THE MONEY BEING RETURNED IN CASH IS BRO UGHT ON RECORD. THE CERTIFICATE IS VALID AS ON THE DATE OF DONATION. HENCE, RESPECTFUL LY FOLLOWING OF THE JUDGMENT OF CO- ORDINATE BENCH OF THE TRIBUNAL, WE ALLOW THESE GROUNDS NO.2 TO 4 FOR ASSESSMENT YEAR 2013-14 & 2014-15 . WE ADOPT THE ABOVE DETAILED DISCUSSION MUTATIS MUTA NDIS TO DELETE THE IMPUGNED DISALLOWANCE. THIS ASSESSEES APPEAL IT(SS )A NO.07//KOL/2017 IS ALLOWED ON MERITS. 8. TO SUM UP, REVENUES ALL FOUR APPEAL(S) IT(SS)A NO.24-25/KOL/2017 & ITA NO.1313-1314/KOL/2017 ARE DISMISSED IN ABOVE TERMS WHEREAS ASSESSEES CROSS OBJECTIONS CO NOS.79-82/KOL/2017 ARE DISMISSED AS NOT PRESSED. THE ASSESSEES APPEAL IT(SS)A NO.07/KOL/2017 IS ALLOWED IN ABOVE TERMS. ORDERED ACCORDINGLY. A COPY OF THIS ORDER BE PLACED IN THE RESPECTIVE CASE FILES . ORDER PRONOUNCED IN THE OPEN COURT 18/09/2019 SD/- SD/- ( ) (( ) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP )- 18 / 09 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S PRAKASH PLY CENTRE PVT. LTD., 4 TH FL, 41, B.B.GANGHLY STREET CENTRAL PLAZA, KO LKATA-12 / PRAKASH PLY CENTRE PVT. LTD., 61, CENTRA L AVENUE, BOUBAZAR, CROSSING, KOLKATA-12 2. /REVENUE-ACIT/DCIT CENTRAL CIRCLE-3(3), 4 TH FLOOR, 110, SHANTIPALLY, KOLKATA-107 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ 4,