The ACIT (OSD), Circle-3(3), Ahmedabad V. Shri Thakkar Govindbhai Ganpatlal , Ahmedabad

ITA 2318/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8404 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 16-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: A C SHAH
• Section: 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.2318/AHD/2017 / ASSTT. YEAR: 2014-15 ACIT, CIR.3(3) AHMEDABAD. VS. M/S.THAKKAR GOVINDBHAI GANPATLAL HUF PROP: NISHAN MARKETING B/204, KRISHNA COMPLEX OPP: DEVASHISH SCHOOL BODAKDEV, AHMEDABAD 380 054. PAN : AAAHT 8273 L ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI A.C. SHAH, AR REVENUE BY : SHRI L.P. JAIN, SR.DR / DATE OF HEARING : 17/07/2019 / DATE OF PRONOUNCEMENT: 17/07/2019 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF THE LD.CIT(A)-3, AHMEDABAD DATED 8.8.2017 PASSED FOR TH E ASSTT.YEAR 2014-15. 2. THOUGH THE REVENUE HAS TAKEN FOUR GROUNDS OF APP EAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE VIZ. THE LD.CIT(A) HAS ERR ED IN DELETING THE DISALLOWANCE OF DONATION AMOUNTING TO RS.96,25,000/ - WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 35(1)(II) OF THE ACT . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 9.9.2014 DECLARING TOTAL INCOME AT RS.31,23,870/ -. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND N OTICE UNDER SECTION 143(2) ITA NO.2318/AHD/2017 2 WAS ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTI NY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS CLAIMED DE DUCTION UNDER SECTION 35(1)(II) AT RS.96,25,000/- ON THE GROUND THAT IT H AS INCURRED THIS EXPENDITURE TOWARDS DONATION. HE OBSERVED THAT DONATIONS WERE GIVEN TO HERBICURE HEALTH CARE BIO-HERBAL RESEARCH FOUNDATION (HERBIC URE FOR SHORT). ACCORDING TO THE AO A SURVEY UNDER SECTION 133A WAS CONDUCTED BY THE DDIT(INVESTIGATION) UNIT-1 & 2, KOLKATTA ON 27.1.20 15 AT HERBICURE FOUNDATION. DURING THE COURSE OF SURVEY, IT WAS F OUND THAT DONORS/ BENEFICIARIES IN CONNIVANCE WITH DONEE AND WITH ACT IVE HELP OF CERTAIN BROKERS, ENTRY OPERATORS/BOGUS BILLERS WERE ENGAGED IN ARRANGING THESE ENTRIES OF BOGUS DONATION. ACCORDING TO THE AO AFTER AN IN QUIRY, HERBICURE WAS PROHIBITED FROM RECEIVING DONATION. ON THE STRENGT H OF THIS REPORT OF SURVEY TEAM, THE AO HAS TREATED THIS DONATION AS BOGUS AND DISALLOWED THE CLAIM OF DONATION MADE BY THE ASSESSEE. ON APPEAL, THE LD.C IT(A) HAS DELETED THE DISALLOWANCE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE AT TH E VERY OUTSET SUBMITTED THAT SIMILAR DONATIONS WERE GIVEN BY S.G. VAT CARE P.LTD. IT WAS DISALLOWED TO THE ASSESSEE, BUT THE TRIBUNAL HAS DELETED THE D ISALLOWANCE. HE PLACED ON RECORD COPY OF THE TRIBUNALS ORDER PASSED IN ITA N O.1943/AHD/2017. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, THE I SSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. ON THE OTHER HA ND, THE LD.DR WAS UNABLE TO CONTROVERT THIS CONTENTION OF THE LD.COUNSEL FOR TH E ASSESSEE. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. IN THE CASE OF S.G.VAT CARE P.LTD. (SUP RA), 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 R S.8,75,000/- ON ITA NO.2318/AHD/2017 3 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 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 DONATION GIV EN BY THE ASSESSEE AS BOGUS. APPEAL TO THE LD.CIT(A) DID NOT BRING AN Y 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 WHETHER SUCH DONEE WAS A GENUINE INSTITUTE OR NOT, WHICH CA N 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 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 SPECIFICALL Y RECORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGH T ON RECORD A SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOSED THAT DO NATIONS RECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH AFTER DEDUC TING COMMISSION. ON THE BASIS OF A GENERAL INFORMATION COLLECTED FRO M THE DONEE, THE DONATION MADE BY THE ASSESSEE CANNOT BE DOUBTED. N EITHER 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 BROU GHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES, DONATION GIVEN B Y THE ASSESSEE TO ITA NO.2318/AHD/2017 4 THE DONEE, ON WHICH THE ASSESSEE NO MECHANISM TO CH ECK THE VERACITY, CAN BE DOUBTED, MORE PARTICULARLY, 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 DONATION S. THEREFORE, THERE CANNOT BE ANY DISALLOWANCE ON THIS ISSUE. WE ALLOW THIS GROUND. 6. THERE IS NO DISPARITY ON THE FACTS. ON THE BASI S SAME SURVEY REPORT, THE GENUINENESS OF THE DONATION HAS BEEN DOUBTED IN THE CASE OF THE ASSESSEE ALSO. 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 T HE REVENUE. IT IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 17 TH JULY, 2019 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 17/07/2019