The ITO, Ward-4(1)(2), Ahmedabad V. Sun Automate Controls Pvt. Ltd, Ahmedabad

ITA 1654/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6824 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 133A; 143(1)

Judgement Text

आयकर अपील य अ धकरण, अहमदाबाद यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH ‘SMC’ BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.1654/Ahd/2019 नधा रण वष /Asstt. Year: 2014-15 ITO, Ward-4(1)(2) Ahmedabad. Vs. Sun Automate Conrols P.Ltd. 11, Steel Mould Estate Nagarvel Hanuman Road Rakhial, Ahmedabad. PAN : AAMCS 9177 P अपीलाथ / (Appellant) त ् यथ / (Respondent) Revenue by : Shri Kamlesh Makwana, Sr.DR Assessee by : None स ु नवाई क तार ख/Date of Hearing : 11/11/2021 घोषणा क तार ख /Date of Pronouncement: 08/12/2021 आदेश/O R D E R PER RAJPAL YADAV, VICE-PRESIDENT Present appeal is directed at the instance of the Revenue against order of the ld.CIT(A)-8, Ahmedabad dated 8.8.2019 for the Asstt.Year 2014-15, by which Revenue has challenged order of the ld.CIT(A) in deleting disallowance of Rs.52,50,000/- under section 35(1)(iii) of the Income Tax Act, 1961. 2. Facts in brief are that the assessee has filed return of income on 22.9.2014 declaring total loss of (-) Rs.20,97,859/-. The return was processed under section 143(1) of the Act and thereafter selected for scrutiny assessment under section 143(3) of the Act. During the assessment proceedings, the ld.AO AO noticed that the assessee has ITA No.1654/Ahd/2019 2 given donation of Rs.30.00 lakhs to one School of Human Genetics & Population Health (SHG&PH) which was claimed as deduction under section 35(1)(ii). In this connection, a survey under section 133A of the Act was carried out, and on the basis of the survey carried out by the Investigation wing of the Department at some of the institutions, the department has received an information from DDIT(Invt), Ahmedabad, that assessee was one of the beneficiaries indulged in giving bogus donations to one School of Human Genetics & Population Health (SHG&PH), Kolkata. This concern was misusing benefit of notification issued by the Income Tax Department and getting donations from various sources, and after deducting certain amount of commission, these donations were refunded in cash after deducting commission charge and provided accommodation entries. As per the information, the donation made by the assessee to the above Institution in the financial year 2013-14 relevant to Asstt.Year 2014-15 were bogus, and claim of weighted deduction under section 35(1)(ii) of the Act at Rs.52.50 lakhs was also bogus. During the survey, a statement was recorded on oath of the concerned person by the survey team. On the basis of that survey report registration granted to its favour was cancelled. On the basis of the outcome of that survey report, and statement on oath of the concerned person, it was revealed that the assessee has taken the accommodation entry in form of giving bogus donation, and accordingly the ld.AO construed that the donation given by the assessee was bogus. Appeal to the ld.CIT(A) did not bring any relief to the assessee. Hence, assessee is now before the Tribunal. 4. Before us, none appeared on behalf of the assessee. Thereafter, after hearing the ld.DR and considering material available on record, we proceed to dispose of the appeal ex parte qua the assessee-respondent. 5. We have duly considered rival contentions and gone through the record carefully. The case of the assessee is that claim under section ITA No.1654/Ahd/2019 3 35(1)(ii) of the Act for making donation to the institution notified by the Government of India in this behalf. When the assessee made the impugned donation, permission/approval granted by the Govt. of India with regard to provisions of sections 35(1)(ii) and 80G(5)(iv) was very much in force, and based on which, the assessee has made the donation to this institution. The assessee has provided sufficient evidence to prove its case before both the authorities below, and based on which, the ld.CIT(A) rightly allowed claim of the assessee. We find that recent judgment of Hon’ble Gujarat in the case of PCT Vs. Thakkar Ganpatlal HUF, wherein Hon’ble High Court has dealt with the similar issue, and while allowing claim of the assessee, referred to the decision of ITAT, Ahmedabad Bench in the case of S.G. Vat Care P.Ltd. Vs. ITO, ITA No.1943/Ahd/2017 order dated 15.01.2019, which was authored by one of us. The Hon’ble Gujarat High Court recorded observation and finding of the Tribunal on this issue in page no.3 to 5 of the judgment, and thereafter came to the conclusion that the onus placed on the assessee has been discharged and no interference in the order of the ITAT is required. The Hon’ble Court, thus allowed claim of donation made to M/s.Herbicure Healthcare Bio-Herbal Research Foundation). For the consideration of the issue on hand, it is imperative upon us to reproduce the relevant part of the Hon’ble Gujarat High Court’s order as under: “6. Learned Senior Advocate Mr.M.R.Bhatt for the appellant submitted that there no appeal is filed by the Revenue against the decision of the Tribunal in the case of S.G.Vat Care Private Limited (Supra). It would therefore be germane to refer to the following findings, given by the Tribunal in the case of S.G.Vat Care Private Limited (Supra):- "2. In the first ground of appeal, the grievance of the assessee is that the ld.CIT(A) has erred in confirming addition of Rs.8,75,000/- on account of alleged bogus donation to Herbicure Heathcare Bio-Herbal Research Foundation. 3. Brief facts of the case are that the assessee has filed return of income on 20.11.2014 declaring total income at Rs.4,47,910/-. On scrutiny of the accounts, it revealed that the assessee-company has given donation to ITA No.1654/Ahd/2019 4 Herbicure Healthcare Bio-Herbal Research Foundation, Calcutta. A survey action was carried out at the premises of the donee wherein it revealed to the Revenue that this concern was misusing the benefit of notification issued by the Income Tax Department. It has been getting donation from various sources, and after deducting certain amount of commission, these donation were refused in cash. On the basis of that survey report registration granted to its favour was cancelled. On the basis of the outcome of that survey report, the ld.AO construed the donation given by the assessee as bogus. Appeal to the ld.CIT(A) did not bring any relief to the assessee. 4. Before us, the ld. Counsel for the assessee contended that donations were given on 25.03.2014. At that point of time, donee was notified as eligible institution and fall within the statutory eligibility criterion. Certificate for receiving donation was cancelled on 6.9.2016. There is no mechanism with the assessee to 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 in 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 gone through the record carefully. The AO is harping upon an information supplied by the survey tern of Calcutta. He has not specifically recorded statement of representative of the donee. He has not brought on record a specific evidence wherein donee has deposed that donations received from the assessee was paid back in cash after deducting commission. 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/881/2019 ORDER 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 which the assessee no mechanism to check the veraci, can be doubted, more particularly, when certificate to obtain donation has been cancelled after two years of the payment of donation. It is fact which has been unearthed subsequent 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(Appeals) has given the finding of the fact that the amount of donation was transferred to the Herbicure through Bank channel and there is no evidence that the same is returned back in cash. 8. It is also found that the Herbicure Foundation has 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. ITA No.1654/Ahd/2019 5 9. In view of the aforesaid findings of the fact given by both the authorities below, no interfere in the impugned order passed by the Tribunal 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.” There is nothing before us as to how the issue on hand differs from the issues raised in the cases cited (supra), so as to take a different view on the issue. Therefore, since the issue is covered in favour of the assessee by the judgment cited (supra), following principle of consistency, we find merit in the claim of the assessee and delete disallowance of deduction made of deduction under sections 35(1)(ii) of the Act. 7. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 8 th December, 2021 at Ahmedabad. Sd/- Sd/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT Ahmedabad; Dated 08/12/2021