Shri Viral Kishorkumar Shah, Rajkot V. The Assistant Commissioner of Income Tax, Circle-3(1), Rajkot

ITA 22/RJT/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2471 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 12-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NAMITA KHURANA
• Assessee Lawyers: N O N E
• Section: 143(3); 201; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER ./ ITA NO. 2 2 /RJT/201 9 / ASSE SSMENT YEAR: 201 3 - 1 4 VIRAL KISHORKUMAR SHAH B - 7 2 ND FLOOR, YUGDHAMA SUKUL APPT. BHAKTI NAGAR CIRCLE, NR. JAYNATH HOSPITAL, RAJKOT VS ACIT CIRCLE - 3(1), RAJKOT PAN NO. BIG PS3 953 M / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NON E REVENUE BY : MRS. NAMITA KHURANA , SR. DR / DATE OF HEARING : 2 6 / 02 /20 20 / DATE OF PRONOUNCEMENT : 28 / 02 / 20 20 PER BENCH : THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R DATED 13 . 12 .201 8 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , RAJKOT ARISING OUT OF THE ORDER DATED 27 . 10 .201 7 PASSED BY THE AC IT , CIRCLE - 3(1) , RAJKOT UNDER SECTION 14 3 (3) R.W.S. 147 OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT ) FOR THE ASSESSMENT YEAR (A.Y.) 20 1 3 - 1 4 . 2. IN THIS PARTICULAR CASE THE ASSESSEE HAS CHALLENGED THE REASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT AND MAINLY THE DISALLOWANCE OF CLAIM UNDER S ECTION 35(1)(II) OF THE ACT TO THE TUNE OF RS. 3,50,000/ - . 3. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. ITA NO . 2 2 /RJT/201 9 AY 201 3 - 1 4 - 2 - 4 . THE CASE OF THE REVENUE IS THIS THAT I T BY THE LD. AO IT WAS FOUND THAT DURING THE SURVEY ACTION THAT THE DONORS/BENEFI CIARIES IN CONNIVANCE OF THREE INSTITUTIONS AND WITH THE ACTIVE HELP OF CERTAIN BROKERS/ENTRY PROVIDERS/BOGUS BILLERS WERE INDULGED IN BOGUS DONATION SYNDICATE AND THE DONATIONS WERE RETURNED TO THE DONORS IN LIEU OF COMMISSION. D URING THE A.Y. 201 3 - 1 4 THE ASSESSEE WAS DONATED RS. 2,00,000/ - TO SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH (SHG&PH) AND CLAIMED DEDUCTION OF RS. 3,50,000/ - UNDER SECTION 35(1)(II) OF THE ACT IN THE RETURN OF INCOME . HENCE, THE CLAIM OF THE ASSESSEE WAS DISALLOWED BY THE LD. AO, NEGATING THE PLEA THAT WITH BONA FIDE BELIEF THE ASSESSEE DONATED THE SAID AMOUNT THROUGH BANKING CHANNEL. THE SAME WAS IN TURN CONFIRMED BY THE LD. CIT(A). HENCE, THE APPEAL BEFORE US. T HE LD. AR AT THE TIME OF THE HEARING OF THE INSTANT APPEAL SUB MITTED BEFORE US THAT THE ISSUE IS SQUARELY COVERED BY SEVERAL JUDGMENTS PASSED BY THE HON BLE TRIBUNAL IN FAVOUR OF THE ASSESSEE. COPY OF THE SAID JUDGMENTS HAVE ALSO BEEN SUBMITTED BEFORE US. 5 . WE HAVE ALSO CAREFULLY CONSIDERED THE JUDGMENT PASSED BY THE LD. TRIBUNAL IN INCLUDING ITA NO. 2318/AHD/2017 FOR A.Y. 2014 - 15, THE RELEVANT PORTION DEALING THE IS S UE IS AS FOLLOWS: - 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. IN THE CASE OF S.G. VAT CARE P.LTD. (SUPRA), THE TRIBUNAL HAS RECORDED THE FOLLOWING FINDING: 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 HEALTHCARE BIO - HERB AL 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 HERBICURE H EALTHCARE 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 DONATIONS FROM VARIOUS SOURCES, AND AFTER DEDUCTING CERTAIN AMOUNT OF COMMISSION, THESE DONATIONS WERE REFUNDED IN CASH. ON THE BASIS OF THAT SURVEY REPORT REGISTRATION GRANTED TO ITA NO . 2 2 /RJT/201 9 AY 201 3 - 1 4 - 3 - 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 25.3.2014. AT THAT POINT OF TI ME, DONEE WAS NOTIFIED AS ELIGIBLE INSTITUTION AND FALL WITHIN THE STATUTORY ELIGIBILITY CRITERION. CERTIFICATE FOR RECEIVING DONATION WAS CANCELLED ON 5.9.2016. THERE IS NO MECHANISM WITH THE ASSESSEE TO VERIFY WHETHER SUCH DONEE WAS A GENUINE INSTITUTE O R 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 RI GHTLY 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 TEM OF CALCUTTA. HE HAS NOT SPECIFICALLY RECORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HA S 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 A GENERAL INFORMATION COLLECTED FROM THE DONEE, THE DONATION MADE BY THE ASSES SEE 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 THE SAME WAS REPAID IN CASH, HAS BEEN BROUGHT ON RECORD. IN THE ABSENCE OF S UCH CIRCUMSTANCES, DONATION GIVEN BY THE ASSESSEE TO THE DONEE, ON WHICH THE ASSESSEE NO MECHANISM TO CHECK THE VERACITY, 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. 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 ASSESSEEALSO. THEREFORE, THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. 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 REV ENUE. IT IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. FROM THE ABOVE JUDGMENTS IT APPEARS THAT THE CASE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND IN THE ABSENCE OF ANY CHANGED FACTS AND CIRCUMSTANCES OF THE CASE WE FIND I T FIT TO ALLOW THE APPEAL PREFERRED BY THE ASSESSEE. THUS, ADDITION IS HEREBY DELETED. 6 . IN THE RESULT, ASSESSEE S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 28 TH FEBRUARY , 2020 AT RAJKOT . SD/ - SD/ - ( WASEEM AHMED ) ACCOUNTANT MEMBER ( MADHUMITA ROY ) JUDICIAL MEMBER RAJKOT ; DATED, 28 / 02 /20 20 TANMAY DATTA , SR.PS TRUE COPY ITA NO . 2 2 /RJT/201 9 AY 201 3 - 1 4 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, RA JKOT 6. / GUARD FILE . / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, RAJKOT 1. DATE OF DICTATION - 2 7 / 02 /20 20 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2 8 /02 /20 20 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. - /02/2020 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT /02/2020 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28 /02/202 0 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER .. 8. DATE OF DESPATCH OF THE ORDER