Appeal details
Counselvise Citation
[2019] 115 COUNSELVISE.COM (IT) 8872 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-09-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Assessment Year
2014-2015
Appeal Filed On
20-12-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI O. P. MEENA, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 2888/AHD/2017 (ASSESSMENT YEAR: 2014-15) R.K. AGARWAL TRADING CO (P) LTD. 89, HIRABHAI MARKET, DIWAN BALLUBHAI ROAD, AHMEDABAD VS. DY. CIT CIR- 3(1)(2), AHMEDABAD [PAN NO. AAA CR7 480 A] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI MEHUL K. PATEL, AR RESPONDENT BY : SHRI L. P. JAIN, SR. D.R. DATE OF HEARING 19.09.2019 DATE OF PRONOUNCEMENT 20.09.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 28.11.2017 PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS) 9, AHMEDABAD UNDER SECTION 143(3) R.WS. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT ) ARISING OUT OF THE ORDER DATED 21.09.2016 PASSED BY THE DY. CIT, CIR-3 (1)(2), AHMEDABAD FOR ASSESSMENT YEAR 2014-15 WHEREBY AND WHEREUNDER THE REJECTION OF CLAIM OF BENEFIT OF DONATION OR RS. 10 LAKH GIVEN B Y THE ASSESSEE TO THE KOLKATA BASED COMPANY NAMELY HERBICURE HEALTHCARE B IO HERBAL RESEARCH FOUNDATION (HHBRF) ORDERED BY THE LD. AO H AS BEEN CONFIRMED. ITA NO.2888/AHD/2017 R.K. AGARWAL TRADING CO. (P) LTD. VS DCIT ASST.YEAR 2014-15 - 2 - 2. AT THE TIME OF THE HEARING OF THE APPEAL, THE LD . COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT REJECTION WAS MADE ON THE GROUND THAT BY AND UNDER A NOTIFICATION BEING NO. 7 9/2016 DATED 06.09.2016 ISSUED BY CBDT THE APPROVAL GRANTED TO S UCH FOUNDATION HAS BEEN WITHDRAWN. HENCE, IT WAS HELD THAT THE ASSESS EE IS THE BENEFICIARY OF SUCH BOGUS DONATION UNDER SECTION 35(1)(II) OF T HE INCOME TAX ACT. IT WAS FURTHER CONTENTED BY THE LD. AR THAT THE ASSESS EE DONATED RS. 10 LAKHS TO THE SAID TRUST NAMELY HERBICURE HEALTHCARE BIO HERBAL RESEARCH FOUNDATION (HHBRF) IN F.Y. 2012-14 MUCH BEFORE THE CANCELLATION DATED 06.09.2016 BY THE CBDT TOWARDS THE APPROVAL G RANTED TO SUCH FOUNDATION. 3. LD. COUNSEL APPEARING FOR THE ASSESSEE ALSO BROU GHT THIS FACT INTO OUR NOTICE THAT THE ISSUE IS SQUARELY COVERED BY AN D UNDER SEVERAL JUDGMENTS PASSED BY THE CO-ORDINATE BENCH INCLUDING ONE OF DATED 17.07.2019 PASSED IN ITA 2318/AHD/2017 FOR A.Y. 201 4-15 IN THE MATTER OF (ACIT VS. M/S. THAKKAR GOVINDBHAI GANPATLAL HUF) . THE SAID APPEAL PREFERRED BY THE REVENUE WAS REJECTED ON THE BASIS OF THE JUDGMENT PASSED IN THE MATTER OF S. G. VAT CARE PVT. LTD. VS . ITO PASSED BY THE CO-ORDINATE BENCH IN THE IDENTICAL ISSUE. IN THAT VIEW OF THE MATTER HE PRAYS FOR SIMILAR RELIEF BEFORE US. 4. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIAL S AVAILABLE ON RECORD INCLUDING THE ORDER PASSED BY THE CO-ORDINAT E BENCH IN ITA NO. 2318/AHD/2017 FOR A.Y. 2014-15 THE RELEVANT PARAGRA PH WHEREOF IS AS FOLLOWS:- ITA NO.2888/AHD/2017 R.K. AGARWAL TRADING CO. (P) LTD. VS DCIT ASST.YEAR 2014-15 - 3 - 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS 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) 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 AFT ER AN INQUIRY, HERBICURE WAS PROHIBITED FROM RECEIVING DONATION. ON THE STR ENGTH OF THIS REPORT OF SURVEY TEAM, THE AO HAS TREATED THIS DONATION AS BO GUS AND DISALLOWED THE CLAIM OF DONATION MADE BY THE ASSESSEE. ON APPEAL, THE LD.CIT(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.LT D. (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 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 ITA NO.2888/AHD/2017 R.K. AGARWAL TRADING CO. (P) LTD. VS DCIT ASST.YEAR 2014-15 - 4 - 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 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 C ONDUCTED BY THE DONEE. HENCE, THESE DONATIONS ARE RIGHTLY BEEN TRE ATED 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 IN FORMATION SUPPLIED BY THE SURVEY TEM OF CALCUTTA. HE HAS NOT SPECIFIC ALLY RECORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT ON RECORD A SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOSE D 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 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 BROU GHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES, DONATION GIVEN B Y THE ASSESSEE TO 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 DON ATIONS. 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 THE REVENUE. IT IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ITA NO.2888/AHD/2017 R.K. AGARWAL TRADING CO. (P) LTD. VS DCIT ASST.YEAR 2014-15 - 5 - 5. SINCE THE DONATION HAS NOT BEEN DOUBTED BY THE R EVENUE IN THE CASE OF THE ASSESSEE, IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES, RESPECTFULLY RELYING UPON THE JUDGMENT PASSED BY TH E CO-ORDINATE BENCH WE ALLOW THE APPEAL PREFERRED BY THE ASSESSEE. CON SEQUENTIALLY, THE ADDITION MADE BY THE AUTHORITIES BELOW IS DELETED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/09/2019 SD/- SD/- ( O. P. MEENA) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/09/2019 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 19.09.2019 (DICTATION PAGES 4) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19.09.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 19.09.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 20.09.2019 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 20.09.2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK20.09 .2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER
