S. G. Vat Care Pvt. Ltd., Gandhinagar V. The ITO, Ward-4, , Mehsana

ITA 1943/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7005 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 29-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B P SRIVASTAVA
• Assessee Lawyers: A C SHAH

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.1943/AHD/2017 / ASSTT. YEAR: 2014-15 S.G. VAT CARE P.LTD. 1, SECOND FLOOR J.P. COMMERCIAL CENTRE KALOL, DIST. GANDHINAGAR PAN : AATCS 0725 N. VS. ITO, WARD-4 SABARKANTHA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI A.C. SHAH, AR REVENUE BY : SHRI B.P. SRIVASTAVA, SR.DR ! / DATE OF HEARING : 11/01/2019 '#$ ! / DATE OF PRONOUNCEMENT: 15 /01/2019 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A), GANDHINAGAR DATED 21.7.2017 PASSED FOR T HE ASSTT.YEAR 2014-15. 2. IN THE FIRST GROUND OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF R S.8,75,000/- ON ACCOUNT OF ALLEGED BOGUS DONATION TO HERBICURE HEAL THCARE 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 ITA NO.1943/AHD/2017 2 SCRUTINY OF THE ACCOUNTS, IT REVEALED THAT THE ASSE SSEE-COMPANY HAS GIVEN DONATION TO HERBICURE HEALTHCARE BIO-HERBAL R ESEARCH FOUNDATION, CALCUTTA. A SURVEY ACTION WAS CARRIED OUT AT THE PREMISES OF THE DONEE WHEREIN IT REVEALED TO THE REVENUE THA T THIS CONCERN WAS MISUSING THE BENEFIT OF NOTIFICATION ISSUED BY THE INCOME TAX DEPARTMENT. IT HAS BEEN GETTING DONATIONS FROM VAR IOUS SOURCES, AND AFTER DEDUCTING CERTAIN AMOUNT OF COMMISSION, THESE DONATIONS WERE REFUNDED IN CASH. ON THE BASIS OF THAT SURVEY REPO RT REGISTRATION GRANTED TO ITS FAVOUR WAS CANCELLED. ON THE BASIS OF THE OUTCOME OF THAT SURVEY REPORT, THE LD.AO CONSTRUED THE DONATIO N 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 CONTE NDED THAT DONATIONS WERE GIVEN ON 25.3.2014. AT THAT POINT O F TIME, DONEE WAS NOTIFIED AS ELIGIBLE INSTITUTION AND FALL WITHIN TH E STATUTORY ELIGIBILITY CRITERION. CERTIFICATE FOR RECEIVING DONATION WAS CANCELLED ON 5.9.2016. THERE IS NO MECHANISM WITH THE ASSESSEE TO VERIFY W HETHER SUCH DONEE WAS A GENUINE INSTITUTE OR NOT, WHICH CAN AVAIL DON ATION 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 TH E 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 INFORM ATION SUPPLIED BY THE SURVEY TEM OF CALCUTTA. HE HAS NOT SPECIFICALLY RE CORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT O N RECORD A SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOSED THAT DONATIONS R ECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH AFTER DEDUCTING COMM ISSION. ON THE BASIS OF A GENERAL INFORMATION COLLECTED FROM THE D ONEE, THE DONATION ITA NO.1943/AHD/2017 3 MADE BY THE ASSESSEE CANNOT BE DOUBTED. NEITHER RE PRESENTATIVES OF THE DONEE HAVE BEEN PUT TO CROSS-EXAMINATION, NOR A NY 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 TH E DONEE, ON WHICH THE ASSESSEE NO MECHANISM TO CHECK THE VERACITY, CA N BE DOUBTED, MORE PARTICULARLY, WHEN CERTIFICATE TO OBTAIN DONAT ION HAS BEEN CANCELLED AFTER TWO YEARS OF THE PAYMENT OF DONATIO N. IT IS FACT WHICH HAS BEEN UNEARTHED SUBSEQUENT TO THE DONATIONS. TH EREFORE, THERE CANNOT BE ANY DISALLOWANCE ON THIS ISSUE. WE ALLOW THIS GROUND. 7. IN THE NEXT GROUND, THE ASSESSEE IS CHALLENGING DISALLOWANCE OF RS.1,33,018/-. 8. THE ASSESSEE FAILED TO MAKE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND WITHIN DUE DATE AS PROVIDED UNDER THIS ACT, HENCE, ITS CLAIM FOR DEDUCTION WAS DISALLOWED UNDER SECT6ION 36(1)(VA) OF THE ACT. THE LD.CIT(A) HAS CONFIRMED DISALLOWAN CE BY PUTTING RELIANCE UPON JUDGMENT OF HONBLE GUJARAT HIGH COUR T IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPORATION LTD., 366 ITR 170. CONSIDERING RELIANCE PUT FORTH BY THE LD.CIT(A) ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE VI EW THAT NO INTERFERENCE IS CALLED IN THE ORDER OF THE LD.CIT(A ) ON THIS ISSUE. THIS GROUND OF APPEAL IS REJECTED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 15 TH JANUARY, 2019 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15 /01/2019