Shri Jignesh Ratilal Shah, Ahmedabad V. DCIT, Circle-4(2), Ahmedabad

ITA 2387/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1435 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHYAM PRASAD
• Assessee Lawyers: S R SHAH
• Keywords: Question of law; Accommodation entries
• Section: 143(3); 13; 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER SHRI JIGNESH RATILAL SHAH, 4-B, ANAND SOCIETY PART-II, JAYMALA BUS STOP, BHADUAT NAGAR, GHODASAR ROAD, ISANPUR, AHMEDABAD-380050 PAN: ABIPS3240B (APPELLANT) VS DY. COMMISSIONER OF INCOME TAX CIRCLE-4(2), AHMEDABAD (RESPONDENT) REVENUE BY: DR. SHYAM PRASAD, SR. D.R. ASSESSEE BY: SHRI S.R. SHAH, A.R. DATE OF HEARING : 09-06-2021 DATE OF PRONOUNCEMENT : 25-06-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2012-13, ARISES FRO M ORDER OF THE CIT(A)-4, AHMEDABAD DATED 23-10-2018, IN PROCEEDIN GS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN S HORT THE ACT. 2. THE SOLITARY ISSUE IN THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE DECISION OF LD. CIT(A) IN UPHOLDING THE DISALLOWANC E OF RS. 5,25,000/- BEING ITA NO. 2387/AHD/2018 ASSESSMENT YEAR 2012-13 I.T.A NO. 2387/AHD/2018 A.Y. 2012-13 PAGE NO SHRI JIGNESH RATILAL SHAH VS. DY. CIT 2 DEDUCTION CLAIMED U/S. 35(1)(II) OF THE ACT IN RESP ECT OF DONATION OF RS. 3 LACS. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME OF RS . 18,45,500/- WAS FILED ON 13 TH SEP, 2012. SUBSEQUENTLY, THE CASE WAS REOPENED U /S. 147 OF THE ACT BY ISSUING OF NOTICE U/S. 148 ON 10 TH MARCH, 2016 ON THE REASON THAT SURVEY WAS CONDUCTED BY THE INVESTIGATION WING CALCUTTA ON 27 TH JANUARY, 2015 AT THE ADMINISTRATIVE OFFICES OF THE INSTITUTION NAMED SCHOOL OF HOME GENETICS AND POPULATION HEALTH (SHG&PH) MATRVANI INSTITUTION OF EXPERIMENTAL RESEARCH AND EDUCATION (MIER&E) AND HERBICURE HEALT HCARE BIO-HERBAL RESEARCH FOUNDATION (HHBRF). DURING THE COURSE OF SURVEY IT WAS NOTICED THAT THESE INSTITUTIONS WERE INDULGED IN PROVIDING ACCOMMODATION ENTRIES IN THE FORM BOGUS DONATION U/S. 35(1)(II) OF THE ACT. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS ISSUED SHOW C AUSE NOTICE TO THE ASSESSEE IN RESPECT OF DISALLOWANCE OF DEDUCTION CL AIMED U/S. 35(1)(II) OF THE ACT OF RS. 5,20,000/- IN RESPECT OF DONATION OF RS . 3 LACS MADE TO SCHOOL OF HOME AND GENETICS AND POPULATION HEALTH (SHG&PH). THE ASSESSEE EXPLAINED THAT HE HAS GIVEN THE DONATION TO THE AFO RESAID INSTITUTE AND THE SAME HAS NOT COME BACK TO THE ASSESSEE AND FILED SU PPORTING EVIDENCES OF GIVING DONATION BEFORE THE ASSESSING OFFICER. HOWE VER, THE ASSESSING OFFICER HAS NOT AGREED WITH THE EXPLANATION OF THE ASSESSEE STATING THAT THE AFORESAID INSTITUTION AS PER THE SURVEY INFORMATION WAS ENGAGED IN PROVIDING THE BOGUS DONATION ENTRIES IN LIEU OF COMMISSION. THE BOGUS DONATION WAS TAKEN BY CHEQUES AND THE SAME WAS ROUTED BACK TO TH E DONOR IN THE FORM OF CASH. THEREFORE, THE ASSESSING OFFICER HAS DISALLO WED THE CLAIM OF I.T.A NO. 2387/AHD/2018 A.Y. 2012-13 PAGE NO SHRI JIGNESH RATILAL SHAH VS. DY. CIT 3 DEDUCTION U/S. 35(1)(II) OF RS. 5,25,000/- AND ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE STA TING THAT VIDE NOTIFICATION NO. 82/2016 (FN 203/64/2009/ITA11) DATED 15 TH SEP, 2016, THE CBDT HAS WITHDRAWN THE APPROVAL GRANTED TO THE INSTITUTION R ETROSPECTIVELY. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, AT THE OUTSET, THE LD. COUNSEL HAS SUBMITTED THAT THE ISSUE IN THE APP EAL OF THE ASSESSEE IS SQUARELY COVERED BY SEVERAL JUDGMENTS PASSED BY HON BLE TRIBUNAL IN THE CASE OF S.G. VAT CARE P. LTD. IN ITA NO. 1943/AHD/2 017, IN THE CASE OF THE THAKKAR GOVINDBHAI GANPATLAL HUF IN ITA NO. 2318/A HD/2017, IN THE CASE OF H.N. METAL CORPORATION IN ITA NO. 1315/AHD/2018 AND IN THE CASE OF BIPIN PRABHUDAS SHAH HUF IN ITA NO. 1149/AHD/2018 AND THE JUDGMENT PASSED BY THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF THAKKAR GOVINDBHAI GANPATLAL HUF IN R/TAX APPEAL NO. 881 OF 2019. THE LD. DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH NOT TO C ONTROVERT THESE UNDISPUTED FACTS THAT IDENTICAL ISSUE ON SIMILAR FA CT HAS BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID REFERRED JU DICIAL PRONOUNCEMENTS. 6. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE JUDICIAL PRONOUNCEMENTS REFERRED BY THE LD. COUNSEL. THE RELEVANT PART OF THE JUDICIAL PRONOUNCEMENTS IS REP RODUCED AS UNDER:- I.T.A NO. 2387/AHD/2018 A.Y. 2012-13 PAGE NO SHRI JIGNESH RATILAL SHAH VS. DY. CIT 4 S.G. VAT CARE P. LTD. VS. ITO IN ITA NO. 1943/AHD/2 017 DATED 15.01.2019 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. THE AO IS HARPING UPON AN INFORMATION S UPPLIED BY THE SURVEY TEM OF CALCUTTA. HE HAS NOT SPECIFICALLY RECORDED STATEME NT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT ON RECORD A SPECIFIC EVI DENCE WHEREIN DONEE HAS DEPOSED THAT DONATIONS RECEIVED FROM THE ASSESSEE W AS PAID BACK IN CASH AFTER DEDUCTING COMMISSION. ON THE BASIS OF A GENERAL IN FORMATION 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 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, 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. ACIT VS. THAKKAR GOVINDBHAI GANPATLAL HUF IN ITA N O. 2318/AHD/2017 DATED 17.07.2019 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. IN THE CASE OF S.G.VAT CARE P.LTD. (SUPRA), THE TRIBUNAL H AS 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/- O N ACCOUNT OF ALLEGED BOGUS DONATION TO HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDAT ION. 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 ASSESSEE-COMPANY HAS GIVEN DONATI ON TO HERBICURE HEALTHCARE BIO- HERBAL RESEARCH FOUNDATION, CALCUTTA. A SURVEY ACT ION 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 DE PARTMENT. 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 T HAT SURVEY REPORT REGISTRATION GRANTED TO ITS FAVOUR WAS CANCELLED. ON THE BASIS OF THE O UTCOME OF THAT SURVEY REPORT, THE LD.AO CONSTRUED THE DONATION GIVEN BY THE ASSESSEE AS BOG US. 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 OF TIME, DONEE WAS NOT IFIED AS ELIGIBLE INSTITUTION AND FALL WITHIN THE STATUTORY ELIGIBILITY CRITERION. CERTI FICATE FOR RECEIVING DONATION WAS CANCELLED ON 5.9.2016. THERE IS NO MECHANISM WITH THE ASSESS EE TO VERIFY WHETHER SUCH DONEE WAS A GENUINE INSTITUTE OR NOT, WHICH CAN AVAIL DONATIO N FROM THE SOCIETY. I.T.A NO. 2387/AHD/2018 A.Y. 2012-13 PAGE NO SHRI JIGNESH RATILAL SHAH VS. DY. CIT 5 5. THE LD.DR, ON THE OTHER HAND, CONTENDED THAT IN THE INVESTIGATION IT CAME TO KNOW ABOUT BOGUS AFFAIRS CONDUCTED BY THE DONEE. H ENCE, 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 S UPPLIED BY THE SURVEY TEM OF CALCUTTA. HE HAS NOT SPECIFICALLY RECORDED STATEME NT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT ON RECORD A SPECIFIC EVIDENCE WHERE IN DONEE HAS DEPOSED THAT DONATIONS RECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH AF TER DEDUCTING COMMISSION. ON THE BASIS OF A GENERAL INFORMATION COLLECTED FROM THE D ONEE, THE DONATION MADE BY THE ASSESSEE CANNOT BE DOUBTED. NEITHER REPRESENTATIVE S OF THE DONEE HAVE BEEN PUT TO CROSS- EXAMINATION, NOR ANY SPECIFIC REPLY DEPOSING THAT S UCH 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 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 YEA RS OF THE PAYMENT OF DONATION. IT IS FACT WHICH HAS BEEN UNEARTHED SUBSEQUENT TO THE DON ATIONS. THEREFORE, THERE CANNOT BE ANY DISALLOWANCE ON THIS ISSUE. WE ALLOW THIS GROU ND. 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 AS SESSEE ALSO. THEREFORE, THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. RESPEC TFULLY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF S.G.VAT CARE P.LTD., WE DO NOT FIND ANY MER IT IN THE APPEAL OF THE REVENUE. IT IS DISMISSED. H.N. METAL CORPORATION VS. DCIT IN ITA NO. 1315/AHD /2018 DATED 13- 01-2020 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. THE AO IS HARPING UPON AN INFORMATION SUPPLIED BY THE S URVEY TEAM OF KOLKATTA. HE HAS NOT SPECIFICALLY RECORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT ON RECORD ANY SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOSED THAT DO NATIONS RECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH AFTER DEDUCTING COMMISSION. ON THE BA SIS 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 SPECIFI C REPLY DEPOSING THAT SUCH DONATION WAS NOT RECEIVED, OR IF RECEIVED THE SAME WAS REPAID IN CAS H, HAS BEEN BROUGHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES, DONATION GIVEN BY THE ASSESS EE TO THE DONEE, ON WHICH THE ASSESSEE NO MECHANISM TO CHECK THE VERACITY, CAN BE DOUBTED, MO RE 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. HONBLE HIGH COURT OF GUJARAT IN THE CASE OF THAKKA R GOVINDBHAI GANPATLAL HUF IN R/TAX APPEAL NO. 881 OF 2019 7 . IN THE FACTS OF THE PRESENT CASE, THE CIT (APP EALS) HAS GIVEN THE FINDING OF THE FACT, THAT THE AMOUNT OR DONATION WAS TRANSFERRED T O THE HERBICURE THROUGH BANK CHANNEL AND THERE IS NO EVIDENCE THAT THE SAME IS R ETURNED BACK IN CASH. I.T.A NO. 2387/AHD/2018 A.Y. 2012-13 PAGE NO SHRI JIGNESH RATILAL SHAH VS. DY. CIT 6 8. IT IS ALSO FOUND THAT THE HERBICURE FOUNDATION H AS CONFIRMED THAT THE AMOUNT HAS BEEN UTILIZED FOR SCIENTIFIC RESEARCH VIDE CONF IRMATION 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 TR IBUNAL 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. IN LIGHT OF THE DECISION OF THE JURISDICTIONAL HON BLE HIGH COURT OF GUJARAT AND THE FINDINGS OF THE CO-ORDINATE BENCHES IN A NUMBER OF DECISIONS AS SUPRA WE CONSIDER THAT THE ISSUE IN DI SPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE SINCE THERE IS NO DISPARI TY ON THE ISSUE AND FACTS OF THE CASE OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE ORDERS OF THE ITAT AND DECISION OF HONBLE JURISDICTIONAL HIGH COURT AS RE FERRED ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-06-2021 SD/- SD/- (MADHUMITA ROY) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 25/06/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 2387/AHD/2018 A.Y. 2012-13 PAGE NO SHRI JIGNESH RATILAL SHAH VS. DY. CIT 7 BY ORDER/ , / ,