Gowardhan Ayurfarma Private Limited, Pune V. Deputy Commissioner of Income tax, Pune

ITA 1092/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4925 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHABANA PARVEEN
• Keywords: Accommodation entries; Reassessment proceedings
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E BEFORE SHRI R.S. SYAL, VP AND SHRI VIKAS AWASTHY, JM / ITA NO.1092/PUN/2017 / ASSESSMENT YEAR : 2012-13 GOWARDHAN AYURFARMA PRIVATE LIMITED. 1341, SHUKRAWAR PETH, PUNE-411 002 PAN : AAECG1740L ....... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2), PUNE. / RESPONDENT ASSESSEE BY : SHRI ABHAY SHASTRI REVENUE BY : SMT. SHABANA PARVEEN / DATE OF HEARING : 11.02.2019 / DATE OF PRONOUNCEMENT : 14.02.2019 / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEAL), PUNE-1 DATED 21.04.201 7 FOR THE ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE RAISED IN APPEAL BY THE ASSESSEE IS DIS ALLOWANCE OF DEDUCTIONS RS.50,06,102/- CLAIMED IN RESPECT OF DONATIONS MA DE U/S.35 AND 80G OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2 ITA NO. 1092/PUN/2017 A.Y.2012-13 3. SHRI ABHAY SHASTRI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE COMPANY IS ENGAGED IN MANUFACTURING AND DIS TRIBUTION OF HERBAL BISCUITS AND KULP (AYURVEDIC). THE ASSESSEE MADE DON ATION OF RS. 25 LAKHS TO SCHOOL OF HUMAN GENETICS & POPULATION HEALTH (S HG & PH) AND CLAIMED DEDUCTION IN RESPECT OF SAID DONATION U/S. 35(1)(II) OF TH E ACT. THE ASSESSEE ALSO MADE DONATION OF RS.40 LAKHS TO SHREEYASH PRATISTHAN DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL AN D CLAIMED DEDUCTION U/S.80G OF THE ACT ON SUCH DONATION. THE ASSESSMENT FOR ASSESSMENT YEAR 2012-13 WAS REOPENED ON THE BASIS OF INFORMATION COLLECTED IN SURVEY U/S.133A OF THE ACT IN THE CASE OF SHG & PH AND OTHER SIMILAR INSTITUTIONS. THE STATEMENT OF FOUNDER DIRECTOR OF SHG & PH, SHRI SAMA DRITA MUKHERJEE SARDAR WAS RECORDED, WHEREIN HE ALLEGEDLY ADMITTED THAT INSTITUTION HAS BEEN RECEIVING DONATIONS AND THE SAME HAS BEEN RETURNED BAC K TO THE DONERS IN CASH. THE LD. AR FURTHER ASSERTED THAT THE ASSESSEE WA S NEVER PROVIDED WITH THE STATEMENT ON THE BASIS OF WHICH ASSESSMENT WAS REO PENED AND DEDUCTIONS CLAIMED QUA DONATIONS WERE DISALLOWED. THE ASSE SSEE HAD MADE DONATIONS THROUGH ITS BANK ACCOUNT AND HAD PRODUCED DONATION RECEIPTS AND BANK STATEMENT BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER BRUSHED ASIDE THE SAME AND MADE ADDITION. THE LD. AR ALS O FILED WRITTEN SUBMISSIONS REITERATING CONTENTIONS MADE BEFORE THE LOWER AUTHORITIES AND BEFORE THE TRIBUNAL. TO FURTHER BUTTRESS HIS SUBMISSIONS, T HE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) DELHI VS. VATIKA TOWNSHIP PVT. LTD. REPORTED AS 376 ITR 466 II) RAJDA POLYMERS VS. DCIT, IN ITA NO.333/KOL/2017 FOR ASSESSMENT YEAR 2013-14 DATED 08.11.2017. III) SAIMED INNOVATION VS. ITO, IN ITA NO.2231/KOL/2016 FOR ASSESSMENT YEAR 2013-14 DATED 13.09.2017 IV) MS. PR ROLLING VS. DCIT, IN ITA NO. 529/JP/2018 FOR ASSESSMENT YEAR 2014-15 DATED 05.07.2018. 3 ITA NO. 1092/PUN/2017 A.Y.2012-13 4. ON THE OTHER HAND, SMT. SHABANA PARVEEN REPRESENTIN G THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING AND DISTRI BUTION OF BISCUITS. THE ASSESSEE MADE DONATION TO SHG & PH THAT IS ENGAGED IN HUMA N GENETICS AND POPULATION HEALTH. THE OBJECTS OF THE ASSESSEE AND T HE RESEARCH ACTIVITIES CARRIED OUT BY SHG & PH ARE ABSOLUTELY UNRELAT ED. THE LD. DR FURTHER POINTED THAT A PERUSAL OF STATEMENT OF MS. BHAGYA SHREE RAMDAS CHOUNDE, MANAGING DIRECTOR OF THE COMPANY RECORDED U/S.1 31 DURING ASSESSMENT, REPRODUCED AT PAGE NO.10 AND 11 OF THE A SSESSMENT ORDER SHOWS THAT BEFORE MAKING DONATIONS, THE ASSESSEE HAS NO T BOTHERED TO ENQUIRE WHAT TYPE OF RESEARCH ACTIVITIES ARE BEING CARR IED OUT BY SHG & PH. THE ASSESSEE HAS ALSO NOT VERIFIED THE GENUINENESS OF THE RESEARCH ACTIVITIES BEING CARRIED OUT BY THE SAID INSTITUTIONS. FURTHER, THE AS SESSEE HAS FAILED TO PROVIDE DETAILS OF THE PERSONS TO WHOM DONATIONS WERE MA DE. HUGE DONATIONS MADE WITHOUT PROPER VERIFICATION CLEARLY INDICATES THAT THE DONATIONS WERE NOT MADE FOR SCIENTIFIC RESEARCH BUT MEREL Y TO CLAIM BENEFIT U/S.35 AND 80G OF THE ACT ON BOGUS DONATIONS. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIV ES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE HAS PURPORTEDLY MADE DONATIONS TO THE TUNE OF RS.25 LAKHS TO SHG & PH FOR SCIENTIFIC RESEARCH AND HAD CLAIMED DEDUCTION U/S.35(1)(II). A SURVEY ACTION U/S.133A OF THE ACT WAS CARRIED OUT BY THE DEPARTMENT IN THE OFFICE PREMISES OF THE SAID INSTITUTION, WHE REIN IT WAS FOUND THAT THE INSTITUTION IN CONNIVANCE WITH DONERS AND B ROKERS WAS PROVIDING ACCOMMODATION ENTRIES. NO SCIENTIFIC OR SOCIAL RES EARCH WAS CARRIED 4 ITA NO. 1092/PUN/2017 A.Y.2012-13 OUT BY THE SAID INSTITUTION. THE ASSESSEE COMPANY IS ONE OF THE DONERS AND CONTRIBUTED RS.25 LAKHS AS DONATION TO SHG & PH. ADMITTE DLY, THE DONATIONS WERE MADE THROUGH BANKING CHANNELS. HOWEVER, D URING THE COURSE OF SURVEY, STATEMENT OF FOUNDER DIRECTOR OF SHG & PH, SAM ADRITA MUKHERJEE SARDAR WAS RECORDED WHEREIN HE ADMITTED RECEIVING DONAT IONS AND RETURNING THE SAME BACK TO THE DONERS IN CASH. DURING THE COURS E OF REASSESSMENT PROCEEDINGS, STATEMENT OF THE ASSESSEE WAS ALSO RECORDE D. A PERUSAL OF THE STATEMENT QUESTION NO.10 AND 11 WOULD SHOW THAT THE AS SESSEE MADE DONATIONS WITHOUT VERIFYING THE GENUINENESS OF THE INSTITUT ION. MERE TRANSFER OF FUNDS THROUGH BANKING CHANNELS ARE NOT SUFFICIENT TO PRO VE THE GENUINENESS OF THE DONATIONS. SIMILARLY, WHILE MAKING DONATION OF RS.40 LAKHS TO SHREEYASH PRATISTHAN FOR WHICH CLAIM OF DEDUCTION U/S.80G WAS MADE, T HE ASSESSEE DID NOT MAKE ANY ENQUIRIES TO ASCERTAIN THE GENUINENESS OF THE INSTITUTION AND THE FACT WHETHER THE DONATION MADE TO THE INSTITUTIONS A RE ELIGIBLE FOR DEDUCTION U/S.80G OF THE ACT. 6. A PERUSAL OF THE DOCUMENTS ON RECORD REVEAL THAT TH E ASSESSEE HAS FAILED TO FURNISH COGENT EVIDENCE REGARDING GENUINENESS OF T HE ACTIVITIES OF THE INSTITUTION TO WHOM DONATIONS WERE MADE. FURTHER, THE ASSESSEE HAS FAILED TO GIVE DETAILS OF THE PERSONS WHO COLLECTED DONATIONS AND ISSUED RECEIPTS. IT IS A MATTER OF PRUDENCE THAT BEFORE MAKING H UGE DONATIONS CREDENTIALS OF RECIPIENT ENTITIES SHOULD BE ASCERTAINED. THUS , IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE D O NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER. THE SAME IS UPHELD. CONSEQU ENTLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. 5 ITA NO. 1092/PUN/2017 A.Y.2012-13 7. IN SO FAR AS THE CASE LAWS RELIED UPON BY THE ASSESS EE ARE CONCERNED, WE HAVE EXAMINED THE SAME. THEY DO NOT SUPPORT THE C AUSE OF THE ASSESSEE, AS THEY ARE ON DIFFERENT ISSUES, UNRELATED TO THE ISSUES IN HAND. 8. THE ASSESSEE HAS RAISED ADDITIONAL GROUND THAT OPPOR TUNITY TO CROSS EXAMINE THE DONEE WHOSE STATEMENT WAS MADE BASIS TO M AKE ADDITION WAS NOT PROVIDED. WE FIND THAT DURING ASSESSMENT PROCEEDINGS OR EVEN DURING FIRST APPELLATE STAGE, THERE IS NO DOCUMENT ON RECORD TO SHOW THAT THE ASSESSEE RAISED SUCH OBJECTION OR MADE REQUEST FOR CRO SS EXAMINATION. THE LD. AR FAIRLY ADMITTED THAT NO WRITTEN REQUEST WAS MADE B EFORE THE AUTHORITIES BELOW SEEKING CROSS EXAMINATION. IN THE LIGHT OF THE FACTS OF THIS CASE, WE DO NOT FIND MERIT IN THE ADDITIONAL GROUND. ACCORDIN GLY, THE SAME IS DISMISSED SANS MERIT. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED ON THURSDAY, THE 14TH DAY OF FEBRUARY, 201 9. SD/- SD/- R. S. SYAL VIKAS AW ASTHY VICE-PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 14 TH FEBRUARY, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEAL), PUNE-1. 4. THE PR. CIT-1, PUNE. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, A BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER , %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NO. 1092/PUN/2017 A.Y.2012-13 DATE 1 DRAFT DICTATED ON 11.02.2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 12.02.2019 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER