Riddhi Buildcon Pvt. Ltd., Ahmedabad V. The DCIT, Circle-3(1)(2), Ahmedabad

ITA 124/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6293 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 10-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Assessee Lawyers: M K PATEL
• Keywords: Question of law
• Section: 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER RIDDHI BUILDCOM PVT. LTD. 409, ABHISHREE COMPLEX, OPP. STAR INDIA BAZAR, SATELLITE, AHMEDABAD PAN: AADCR4772J (APPELLANT) VS THE DY. CIT, CIRCLE-3(1)(2), AHMEDABAD-380015 (RESPONDENT) REVENUE BY: SHRI S.S. SHUKLA, SR. D.R. ASSESSEE BY: SHRI M.K. PATEL, A.R. DATE OF HEARING : 22-03-2021 DATE OF PRONOUNCEMENT : 09-04-20 21 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2014-15, ARISES FRO M ORDER OF THE CIT(A)-7, AHMEDABAD DATED 03-10-2017, IN PROCEEDIN GS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS PERTAINED TO THE ISSUE OF CONFIRMING THE ADDITION OF RS. 10 LACS ON ACCOUN T OF DISALLOWANCE OF CLAIM MADE U/S. 35(1)(II) OF THE ACT IN RESPECT OF DONATION MADE TO HERBICURE HEALTHCARE BIO RESEARCH FOUNDATION (HHBRF) THE ASS ESSEE HAS FILED ITA NO. 124/AHD/2018 ASSESSMENT YEAR 2014-15 I.T.A NO. 124/AHD/2018 A.Y. 2014-15 PAGE NO RIDDHI BUILDCOM PVT. LTD. VS. DCIT 2 RETURN OF INCOME ON 29 TH OCTOBER, 2014 DECLARING TOTAL INCOME OF RS. 1,14,77,830/-. THE CASE WAS SUBJECT TO SCRUTINY AS SESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 2 ND SEP, 2015. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER STATED THAT INFOR MATION WAS RECEIVED FROM THE OFFICE OF DDIT INVESTIGATION, CALCUTTA INFORMIN G THAT ASSESSEE WAS A BENEFICIARY OF BOGUS DONATION U/S. 35(1)(II) OF THE ACT. THE ASSESSEE HAS MADE CLAIM OF DEDUCTION U/S. 35(1)(II) OF THE ACT O F GIVING THE DONATION TO HERBICURE HEALTHCARE BIO RESEARCH FOUNDATION (HHBRF ) IN THIS REGARD, THE ASSESSING OFFICER STATED THE DONATION MADE BY T HE ASSESSEE TO HERBICURE HEALTHCARE BIO RESEARCH FOUNDATION (HHBRF) WAS NO LONGER VALID IN VIEW OF THE NOTIFICATION OF MINISTRY OF FINANCE DATED 6 TH SEP, 2016 WHICH HAD WITHDRAWN APPROVAL GIVEN U/S. 35(1)(II) OF THE ACT TO HHBRF, THEREFORE, DEDUCTION TO THE AMOUNT OF RS. 10 LACS CLAIMED BY T HE ASSESSEE OF GIVING DONATION TO THE AFORESAID INSTITUTE OF THE ASSESSEE . 3. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE REI TERATING THE FACTS REPORTED BY THE ASSESSING OFFICER. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, AT THE OUTSET, THE LD. COUNSEL HAS REPORTED THAT IDENTICAL ISSUE ON ID ENTICAL FACTS HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY ITAT AHMEDABAD IN THE CASE OF ACIT VS. M/S. THAKKAR GOVINDBHAI GANPATLAL VIDE ITA NO. 2318/AHD/2017 DATED 17-07-2019. THE LD. COUNSEL HAS REPORTED THAT AFOR ESAID DECISION OF THE ITAT WAS ALSO CONFIRMED BY THE HONBLE HIGH COURT O F GUJARAT IN THE CASE OF PRINCIPAL CIT-3 VS. M/S. THAKKAR GOVINDBHAI GANP ATLAL HUF, TAX I.T.A NO. 124/AHD/2018 A.Y. 2014-15 PAGE NO RIDDHI BUILDCOM PVT. LTD. VS. DCIT 3 APPEAL NO. 881 OF 2019 DATED 20-01-2020. THE LD. D EPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THESE UNDISPUTE D FACTS REPORTED BY THE LD. COUNSEL THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID DECISION OF THE ITAT AND HONBLE HIGH COURT OF GUJA RAT. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE DECISIONS OF ITAT AND HONBLE GUJARAT HIGH COURT AS REFERRED AB OVE BY THE LD. COUNSEL. THE RELEVANT PART OF THE DECISION OF THE ITAT AHMED ABAD IN THE CASE OF M/S. THAKKAR GOVINDBHAI GANPATLAL HUF IS REPRODUCED AS U NDER:- 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. IN THE CASE OF S.G. VAT CARE P. LTD. (S UPRA), THE TRIBUNAL HAS RECORDED FOLLOWING FINDING:- 2. IN THE FIRST GROUND OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS. 8,75,00/- ON ALLEGED BOGUS DONATION, TO HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED RETURN OF INCOME ON 20.11.2014 DECLARING TOTAL INCOME AT RS.4,47,910/-. ON SCRUTIN Y OF THE ACCOUNTS, IT REVEALED THAT THE ASSESSEE-COMPANY HAS GIVEN DONATION TO HERBICURE HE ALTHCARE BIO-HERBAL RESEARCH FOUNDATION, CALCUTTA. A SURVEY ACTION WAS CARRIED O UT AT THE PREMISES OF THE DONEE WHEREIN IT REVEALED TO THE REVENUE THAT THIS CONCER N WAS MISUSING THE BENEFIT OF NOTIFICATION ISSUED BY THE INCOME TAX DEPARTMENT. I T HAS BEEN GETTING DONATIONS FROM VARIOUS SOURCES, AND AFTER DEDUCTING CERTAIN AMOUNT OF COMMISSION, THESE DONATIONS WERE REFUNDED IN CASH. ON THE BASIS OF THAT SURVEY REPOR T REGISTRATION GRANTED TO ITS FAVOUR WAS CANCELLED. ON THE BASIS OF THE OUTCOME OF THAT SURV EY REPORT, THE ID.AO CONSTRUED THE DONATION GIVEN BY THE ASSESSEE AS BOGUS. APPEAL TO THE ID.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT DONATIONS WERE GIVEN ON 25.3.2014. AT THAT POINT OF TIME, DONEE WAS NOTIFIE D AS ELIGIBLE INSTITUTION AND FALL WITHIN THE STATUTORY ELIGIBILITY CRITERION. CERTIFICATE FO R RECEIVING DONATION WAS CANCELLED ON 5.9.2016. THERE IS NO MECHANISM WITH THE ASSESSEE T O VERIFY WHETHER SUCH DONEE WAS A GENUINE INSTITUTE OR NOT, WHICH CAN AVAIL DONATION FROM THE SOCIETY. 5. THE LD. DR, ON THE OTHER HAND, CONTENDED THAT I N THE INVESTIGATION IT CAME TO KNOW ABOUT BOGUS AFFAIRS CONDUCTED BY THE DONEE. HENCE, THESE DONATIONS ARE RIGHTLY BEEN TREATED AS BOGUS, AND ADDITION IS RIGHTLY MADE. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE AO IS HARPING UPON AN INFORMATION SUPPLIED BY THE S URVEY TERN OF CALCUTTA. HE HAS NOT SPECIFICALLY RECORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT ON RECORD A SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOSE D THAT DONATIONS RECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH AFTER DEDUCTING COMM ISSION. ON THE BASIS OF A GENERAL INFORMATION COLLECTED FROM THE DONEE, THE DONATION MADE BY THE ASSESSEE CANNOT BE DOUBTED. NEITHER REPRESENTATIVES OF THE DONEE HAVE BEEN PUT TO CROSS-EXAMINATION, NOR I.T.A NO. 124/AHD/2018 A.Y. 2014-15 PAGE NO RIDDHI BUILDCOM PVT. LTD. VS. DCIT 4 ANY SPECIFIC REPLY DEPOSING THAT SUCH DONATION WAS NOT RECEIVED, OR IF RECEIVED THE SAME WAS REPAID IN CASH, HAS BEEN BROUGHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES, DONATION GIVEN BY THE ASSESSEE TO THE DONEE, ON WHI CH THE ASSESSEE NO MECHANISM TO CHECK THE VERACITY, CAN BE DOUBTED, MORE PARTICULAR LY, WHEN CERTIFICATE TO OBTAIN DONATION HAS BEEN CANCELLED AFTER TWO YEARS OF THE PAYMENT O F DONATION. IT IS FACT WHICH HAS BEEN UNEARTHED SUBSEQUENT TO THE DONATIONS. THEREFORE, T HERE CANNOT BE ANY DISALLOWANCE ON THIS ISSUE. WE ALLOW THIS GROUND.' 6. THERE IS NO DISPARITY ON THE FACTS. ON THE BASIS SAME SURVEY REPORT, THE GENUINENESS OF THE DONATION HAS BEEN DOUBTED IN THE CASE OF THE AS SESSEE ALSO. THEREFORE, THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESS EE. RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF S.G.VAT CARE P. LTD., WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. IT IS DISMISSED. 5. WE HAVE ALSO GONE THROUGH THE DECISION OF HONBL E HIGH COURT OF GUJARAT WHEREIN THE AFORESAID FINDING OF THE ITAT I S CONFIRMED. THE SAME IS DISCUSSED AS UNDER:- 4. BEFORE US, THE ID. COUNSEL FOR THE ASSESSEE CON TENDED THAT DONATIONS WERE GIVEN ON 25.03.2014. AT THAT POINT OF TIME, DONEE WAS NOTIFI ED AS ELIGIBLE INSTITUTION AND FALL WITHIN THE STATUTORY ELIGIBILITY CRITERION. CERTIFICATE FO R RECEIVING DONATION WAS CANCELLED ON 6.9.2016. THERE IS NO MECHANISM WITH THE ASSESSEE T O VERIFY WHETHER SUCH DONEE WAS A GENUINE INSTITUTE OR NOT, WHICH CAN AVAIL DONATION FROM THE SOCIETY. 5. THE ID. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, CONTENDED THAT IN THE INVESTIGATION IT CAME TO KNOW ABOUT BOGUS AFFAIRS CONDUCTED BY THE DONEE. HENCE, THESE DONATIONS ARE RIGHTLY BEEN TREATE D AS BOGUS AND ADDITION IS RIGHTLY MADE. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. THE AO IS HARPING UPON AN INFORMATION SUPPLIED BY T HE SURVEY TERN OF CALCUTTA. HE HAS NOT SPECIFICALLY RECORDED STATEMENT OF REPRESENTATI VE OF THE DONEE. HE HAS NOT BROUGHT ON RECORD A SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOSE D THAT DONATIONS RECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH AFTER DEDUCTING COMM ISSION. ON THE BASIS OF GENERAL INFORMATION COLLECTED FROM THE DONEE, THE DONATION MADE BY THE ASSESSEE CANNOT BE DOUBTED. NEITHER REPRESENTATIVES OF THE DONEE HAVE BEEN PUT TO CROSS-EXAMINATION, NOR ANY SPECIFIC REPLY DEPOSING THAT SUCH DONATION WAS NOT RECEIVED, OR IF RECEIVED C/TAXAP/88/209 ORDER THE SAME WAS REPAID IN CASH, H AS BEEN BROUGHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES, DONATION GIVEN B Y THE ASSESSEE TO THE DONEE, ON WHICH THE ASSESSEE NO MECHANISM TO CHECK THE VERACI, CAN BE DOUBTED, MORE PARTICULARLY, WHEN CERTIFICATE TO OBTAIN DONATION HAS BEEN CANCELLED A FTER TWO YEARS OF THE PAYMENT OF DONATION. IT IS FACT WHICH HAS BEEN UNEARTHED SUBSE QUENT TO THE DONATIONS. THEREFORE, THERE CANNOT BE ANY DISALLOWANCE ON THIS ISSUE. WE ALLOW THIS GROUND.' 7. IN THE FACTS OF THE PRESENT CASE, THE CIT(APPEAL S) HAS GIVEN THE FINDING OF THE FACT THAT THE AMOUNT OF DONATION WAS TRANSFERRED TO THE HERBI CURE THROUGH BANK CHANNEL AND THERE IS NO EVIDENCE THAT THE SAME IS RETURNED BACK IN CA SH. I.T.A NO. 124/AHD/2018 A.Y. 2014-15 PAGE NO RIDDHI BUILDCOM PVT. LTD. VS. DCIT 5 8. IT IS ALSO FOUND THAT THE HERBICURE FOUNDATION H AS CONFIRMED THAT THE AMOUNT HAS BEEN UTILIZED FOR SCIENTIFIC RESEARCH VIDE CONFIRMATION DATED 29.09.2016. ACCORDINGLY, THE ONUS PLACED UPON THE ASSESSEE WAS DISCHARGED. 9. IN VIEW OF THE AFORESAID FINDINGS OF THE FACT GI VEN BY BOTH THE AUTHORITIES BELOW, NO INTERFERE IN THE IMPUGNED ORDER PASSED BY THE TRIBU NAL IS REQUIRED TO BE MADE. NO SUBSTANTIAL QUESTION OF LAW ARISE FROM THE ORDER OF THE TRIBUNAL. THEREFORE, THE APPEAL FAILS AND IS HEREBY, DISMISSED. RESPECTFULLY FOLLOWING THE DECISION OF ITAT AND HON BLE HIGH COURT OF GUJARAT AS ELABORATED ON THE SIMILAR ISSUE AND I DENTICAL FACTS, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09-04-2021 SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 09/04/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,