Ramawtar Devkinanden Gupta-HUF, Ahmedabad V. ITO, Ward-1(2)(5), Ahmedabad

ITA 2478/AHD/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4589 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 27-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PURSHOTTAM KUMAR
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Capital asset; Charitable institution; Question of law
• Section: 143(3); 12A; 147; 148

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH SMC BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.2478/AHD/2018 / ASSTT. YEAR: 2013-14 RAMAWTAR DEVKINANDEN GUPTA HUF C/O. HARESH ENTERPRISES PLOT NO.2111, PHASE-III NR.TRIKAMPURA BUS STOP GIDC, VATVA, AHMEDABAD. PAN : AAAHG 6929 A VS. ITO, WARD-1(2)(5) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI MEHUL K. PATEL, AR REVENUE BY : SHRI PURSHOTTAM KUMAR, SR.DR ! / DATE OF HEARING : 24/09/2021 '#$ ! / DATE OF PRONOUNCEMENT: 30/09/2021 %& / O R D E R PER RAJPAL YADAV, VICE-PRESIDENT THE ABOVE APPEAL IS FILED AT THE INSTANCE OF THE AS SESSEE AGAINST ORDER OF THE LD.CIT(A)-6, AHMEDABAD DATED 26.10.201 8 PASSED FOR THE ASSTT.YEAR 2013-14. 2. THE ASSESSEE HAS RAISED TWO GROUNDS. IN GROUND NO.1 ALONG WITH SUB-GROUNDS, ASSESSEE HAS CHALLENGED VALIDITY OF AS SESSMENT ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 147 O F THE INCOME TAX ACT, 1961. HOWEVER, AT THE TIME OF HEARING, THE LD .COUNSEL FOR THE ASSESSEE HAS NOT PRESSED THIS GROUND FOR ADJUDICATI ON, AND THEREFORE, THE SAME STANDS DISMISSED FOR WANT OF PROSECUTION. ITA NO.2478/AHD/2018 2 3. IN GROUND NO.2 ALONG WITH SUB-GROUNDS, THE SOLE ISSUE INVOLVED IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ORDER OF THE AO IN REJECTING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTI ON 35(1)(II) IN RESPECT OF DONATIONS GIVEN TO SCHOOL OF HUMAN GENET ICS AND POPULATION HEALTH, KOLKATA, WHICH IS A CHARITABLE INSTITUTION AND WAS HAVING REGISTRATION UNDER SECTION 12A OF THE INCOME TAX AC T, 1961. 4. FACTS IN BRIEF ARE THAT THE ASSESSEE EARNS INCOM E FROM BUSINESS AND OTHER SOURCES. IT HAS FILED RETURN OF INCOME O N 26.9.2013 SHOWING TOTAL INCOME OF RS.9,89,090/-. ON THE BASIS SURVEY CARRIED OUT BY THE KOLKATA DIRECTOR AT SOME OF THE INSTITUTIONS, THE D EPARTMENT HAS RECEIVED AN INFORMATION FROM DDIT(INVT), AHMEDABAD, THAT ASSESSEE WAS ONE OF THE BENEFICIARIES INDULGED IN GIVING BOG US DONATIONS TO ONE SCHOOL OF HUMAN GENETICS & POPULATION HEALTH (SHG&P H), KOLKATA 2013-14. AS PER THE INFORMATION, ASSESSEE HAS MAD E BOGUS DONATION OF RS.5 LAKHS IN THE ASSTT.YEAR 2013-14 TO THE SAID INSTITUTION, AND CLAIMED THE SAME AS ALLOWABLE DEDUCTION UNDER SECTI ON 35(1)(II) OF THE ACT. THEREAFTER, THE ASSESSMENT WAS REOPENED BY IS SUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. IN THE SURVEY ACTI ON WAS CARRIED OUT AT THE PREMISES OF THE DONEE IT REVEALED TO THE REVENU E THAT 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 AFTER DEDUCTING COMMISSION CHARGE. DURING THE SURVEY, A STATEMENT WAS RECORDED ON OATH OF THE CON CERNED PERSON BY THE SURVEY TEAM. ON THE BASIS OF THAT SURVEY REPORT REGISTRATION GRANTED TO ITS FAVOUR WAS CANCELLED. ON THE BASIS OF THE O UTCOME OF THAT SURVEY REPORT, AND STATEMENT ON OATH OF THE CONCERNED PERS ON, IT WAS REVEALED THAT THE ASSESSEE HAS TAKEN THE ACCOMMODATION ENTRY IN TERMS OF GIVING BOGUS DONATION, AND ACCORDINGLY THE LD.AO CONSTRUED THAT THE DONATION ITA NO.2478/AHD/2018 3 GIVEN BY THE ASSESSEE WAS BOGUS, WHICH WAS ACCORDIN GLY DISALLOWED BY THE AO AND ADDED TO THE TOTAL INCOME OF THE ASSESSE E. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. BEFORE US, AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ISSUE OF DONATION SO MADE TO THE INSTITUTIONS BASED IN KOLKATA HAS BEEN SETTLED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PCIT VS. THAKKAR GOVINDBHAI GANPATLAL HUF I N APPEAL NO.881 OF 2019 DATED 20.1.2020, WHICH WAS BASED ON THE DECISI ON OF ITAT, AHMEDABAD IN THE CASE OF SG VAT CARE PVT. LD. VS. I TO, ITA NO.1943/AHD/2017 DATED 15.1.2019. SINCE THE FACTS OF THE PRESENT CASE ARE IDENTICAL AND REASONS FOR DISALLOWANCE BY THE DEPARTMENT WERE ALSO SIMILAR, THE CLAIM OF THE ASSESSEE ALSO DESERV ES TO BE ALLOWED IN THAT TERM. FURTHER RELIANCE WAS PLACED ON THE DECIS ION OF ITAT, AHMEDABAD BENCH IN THE CASE OF KASTUBHBHAI DHIRAJLA L PATEL VS.DCIT, 210/AHD/2019 ORDER DATED 23.02.2021 WHEREIN SIMILAR CLAIM WAS ALLOWED BY THE TRIBUNAL. THEREFORE, THE ISSUE ON H AND NO MORE REMAINS RES INTEGRA . THE LD.COUNSEL HAS PLACED ON RECORD COPY OF ORDE R OF THE TRIBUNAL CITED (SUPRA). 6. THE LD.DR, ON THE OTHER HAND, CONTENDED THAT IN THE INVESTIGATION IT CAME TO KNOW ABOUT BOGUS AFFAIRS CONDUCTED BY TH E DONEE, AND IT WAS A TYPICAL CASE OF LAUNDERING OF UNACCOUNTED MONEY. THE ASSESSEE HAS FAILED TO FURNISH SPECIFIC QUERIES RAISED DURING TH E ASSESSMENT PROCEEDINGS. HENCE, THESE DONATIONS ARE RIGHTLY TRE ATED AS BOGUS, AND ADDITION IS RIGHTLY MADE. 7. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. WE ALSO GONE THROUGH THE JUDGMEN T OF HONBLE GUJARAT AND ALSO THE DECISIONS OF THE ITAT, AHMEDAB AD ON SIMILAR ISSUE. WE FIND THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF PCT VS. THAKKAR ITA NO.2478/AHD/2018 4 GANPATLAL HUF HAS DEALT WITH THE ISSUE, AND WHILE A LLOWING THE CLAIM OF THE ASSESSEE, HAS ALSO 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. IN THIS THE HONBLE GUJARAT HIGH COURT NOTE D THE OBSERVATION AND FINDING OF THE TRIBUNAL ON THIS ISSUE, AND RECORDED THE SAME IN PAGE NO.3 TO 5 OF THE HIGH COURTS ORDER, 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 REQ UIRED. THE HONBLE COURT, THUS ALLOWED CLAIM OF DONATION MADE TO M/S.H ERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION). FOR THE CONSIDERA TION OF THE ISSUE ON HAND, IT IS IMPERATIVE UPON US TO REPRODUCE THE REL EVANT PART OF THE HONBLE GUJARAT HIGH COURTS ORDER AS UNDER: 6. LEARNED SENIOR ADVOCATE MR.M.R.BHATT FOR THE AP PELLANT 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). I T WOULD THEREFORE BE GERMANE TO REFER TO THE FOLLOWING FINDINGS, GIVEN B Y 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 BI O-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 ASSESSEE-COMPANY HAS GIVEN DONATION TO HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION , CALCUTTA. A SURVEY ACTION WAS CARRIED OUT AT THE PREMISES OF TH E DONEE WHEREIN IT REVEALED TO THE REVENUE THAT THIS CONCERN WAS MISUS ING THE BENEFIT OF NOTIFICATION ISSUED BY THE INCOME TAX DEPARTMENT. I T 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 WA S 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. ITA NO.2478/AHD/2018 5 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT DONATIONS WERE GIVEN ON 25.03.2014. AT THAT POINT OF TIME, DO NEE 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 GO NE THROUGH THE RECORD CAREFULLY. THE AO IS HARPING UPON AN INFORMA TION SUPPLIED BY THE SURVEY TERN OF CALCUTTA. HE HAS NOT SPECIFICALLY RE CORDED STATEMENT OF REPRESENTATIVE OF THE DONEE. HE HAS NOT BROUGHT ON 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 GENERAL INFORMATION COLLECTED FROM THE DONEE, TH E DONATION MADE BY THE ASSESSEE CANNOT BE DOUBTED. NEITHER REPRESENTAT IVES OF THE DONEE HAVE BEEN PUT TO CROSS-EXAMINATION, NOR ANY SPECIFI C REPLY DEPOSING THAT SUCH DONATION WAS NOT RECEIVED, OR IF RECEIVED C/TA XAP/881/2019 ORDER THE SAME WAS REPAID IN CASH, HAS BEEN BROUGHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES, DONATION GIVEN BY TH E ASSESSEE TO THE DONEE, ON WHICH THE ASSESSEE NO MECHANISM TO CHECK THE VERACI, CAN BE DOUBTED, MORE PARTICULARLY, WHEN CERTIFICATE TO OBT AIN DONATION HAS BEEN CANCELLED AFTER TWO YEARS OF THE PAYMENT OF DONATIO N. IT IS FACT WHICH HAS BEEN UNEARTHED SUBSEQUENT TO THE DONATIONS. THEREFO RE, THERE CANNOT BE ANY DISALLOWANCE ON THIS ISSUE. WE ALLOW THIS GROUN D.' 7. IN THE FACTS OF THE PRESENT CASE, THE CIT(APPEAL S) 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 R ETURNED BACK IN CASH. 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 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, DISMISSE D. ITA NO.2478/AHD/2018 6 IT IS NOT DISPUTED BY THE LD.DR 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. THE FACTS IN THE PRESENT CASE A RE SIMILAR TO THAT OF THE CASE CITED SUPRA, AND HENCE, THERE IS NO DISPAR ITY, THAT IS TO SAY, ISSUE ON HAND IS NO MORE REMAIN RES INTEGRA . THEREFORE, FOLLOWING THE PRINCIPLE OF JUDICIAL PRECEDENCE, WE FIND MERIT IN THE SUBMISSIONS OF THE LD.COUNSEL FOR THE ASSESSEE AND ACCORDINGLY ALLOW T HE GROUND OF APPEAL. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER, 2021 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 30/09/2021