Shri Soni Ishwarlal Harjivandas, Ahmedabad V. The Dy.CIT.,Circle-10, Ahmedabad

ITA 2972/AHD/2008

• Counselvise Citation: 297220514 RSA 2008
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 10-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 20-08-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M K PATEL WITH SHRI J C SHARMA
• Keywords: Set aside
• Section: 133A; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. K. GARO DIA, AM) ITA NO.2972/AHD/2008 A. Y.: 2004-05 SONI ISHWARLAL HARJIVANDAS, NEAR SWASTIK CHAR RASTA, NAGRANGPURA, AHMEDABAD PA NO. AAFFS 5302 Q VS THE D. C. I. T., CIRCLE-10, INCOME TAX OFFICE, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. K. PATEL WITH SHRI J. C. SHARMA, AR RESPONDENT BY SHRI B. L. YADAV, SR. DR DATE OF HEARING: 10-01-2012 DATE OF PRONOUNCEMENT: 13-01-2012 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XV I, AHMEDABAD DATED 29-05-2008, FOR ASSESSMENT YEAR 2004-05. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD. 3. ON GROUND NO.1, THE ASSESSED CHALLENGED THE ORDE R OF THE LEARNED CIT(A) IN CONFIRMING DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80 GGC OF THE IT ACT OF RS.40 LACS. ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 2 4. BRIEFLY, THE FACTS AS NOTED IN THE IMPUGNED ORDE R ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G AND TRADING OF JEWELLERY. A SURVEY WAS CONDUCTED U/S 133A OF THE IT ACT AND AS A RESULT OF WHICH, APPELLANT HAS DISCLOSED A SUM OF R S.55,62,000/- ON ACCOUNT OF DIFFERENCE IN STOCK AND INVESTMENT IN FU RNITURE. IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2004-05, THE ASSESSEE CLAIMED DEDUCTION OF RS.40 LAKHS ON ACCOUNT OF DONATION IN CASH TO RASHTRIYA VIKAS PARTY MADE ON 31-03-2004. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTION, THE AO HAS EXAMINED THE ASSESSEE U/S131 OF THE IT ACT AND THE SAID STATEMENT HAS BEE N REPRODUCED AT PAGES NO. 1TO 12 OF THE ASSESSMENT ORDER. THE AO HA S CONCLUDED AS UNDER: ON PERUSAL OF THE STATEMENT OF ROHITBHAI, IT IS SE EN THAT THE PROBABILITY THAT ASSESSEE HAS CLAIMED CASH DONA TION OF RS.40,00,000 TO RASHTRIYA VIKAS PARTY IS ZERO. MANY QUESTIONS REGARDING CARRYING OF HUGE CASH OF RS.40 LACS FROM AHMEDABAD TO DELHI REMAINS UNANSWERED. NOT O SINGLE FUEL BILL HAS BEEN PRODUCED BY THE ASSESSEE TO PROVE FILLING OF DIESEL IN HIS CAR IN WHICH THE ALLEGED CASH IS STATED TO HAVE BEEN CARRIED . EVEN BILL OF STAY DURING THE JOURNEY HAS NOT BEEN PRODUCED. THE ASSESSEE STARTED FROM AHMEDABAD ON 29.3.2004 IN THE EARLY HOURS IN HIS OWN CAR FOR DELHI. ACCORDING TO HIM STATEMENT HE RETURNED ON 2.4.2004. HE WAS AWAY FROM AHMEDABAD FO R AT LEAST 4 DAYS. DESPITE HIS STAY OUTSIDE HE HAS NOT B EEN ABLE TO PRODUCE ANY EVIDENCE OF MAKING PAYMENT TOWARDS HIS STAY OR FILLING OF DIESEL IN HIS CAR. THE COPY OF VOUCHER NO.329 OF ISHWARDAS & BROTHERS IS SELF MADE VOUCHER OF THE AS SESSEE AND DOES NOT HAVE CONTEMPORARY EVIDENTIARY VALUE. THIS EXPENDITURE OF RS.6.550/- DEBITED IN THE BOOKS OF THE ASSESSEE VIDE VOUCHER NO.329 DATED 31.3.2004 IS DISALLOWED F OR WANT OF ANY DETAILS THEREOF. IT IS STATED BY ASSESSEE THAT THE ISSUE OF DONATION TO RASHTRIAY VIKAS PARTY WAS BEING DISCUSS ED WITH PRESIDENT OF THE PARTY SINCE LAST TWO-THREE MONTHS OF THE YEAR UNDER CONSIDERATION. IN THAT EVENT, THE ANSWER RE GARDING ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 3 ALLOWABILITY OF DEDUCTION U/S. 80GGC IN THE ASST. Y EAR 2003-04 IS CONTRADICTORY. ANY ONE DESIRES OF GIVING SUCH HUGE DONATION OF RS.40 LACS WILL NOT THINK OF CARRYING THE CASH I N THE LAST FEW DAYS TO SUCH A FAR AWAY PLACE LIKE DELHI IN A CAR. THE ASSESSEE COULD HAVE GIVEN A DRAFT OR CHEQUE WELL IN TIME. AT PRESENT THE MONEY CAN BE TRANSFERRED THROUGH BANK IMMEDIATELY O R THROUGH INTERNET. ANOTHER POINT FOR CONSIDERATION WAS THAT SHRI ROHIT BHAI, PARTNER HAS NOT BEEN ABLE TO NAME THE FUNCTION IN W HICH HE MET THE PRESIDENT OF RASHTRIYA VIKAS PARTY. THE TERRITO RIAL WORKING OF RASHTRIYA VIKAS PARTY (RVP) IS NEW DELHI AND SURROU NDING AREA. IT HAS NO BRANCH IN GUJARAT. THE ASSESSEE COU LD HAVE GIVEN DONATION TO ANY PARTY IN GUJARAT. IT IS STATE D BY SHRI ROHITBHAI THAT HE WAS INSPIRED BY GOOD SOCIAL AND N ATIONALISTIC WORK OF THE ABOVE PARTY. IN REPLY, HE COULD NOT NAM E A SINGLE WORK OF THE ABOVE PARTY, WHICH INSPIRED HIM APART F ROM STATING THAT IT FIELDED CANDIDATE IN ELECTION. THE ASSESSEE WAS ASKED ABOUT HIS CONNECTION WITH AN Y POLITICAL OR RELIGIOUS PARTY ANY TIME, HE CATEGORIC ALLY REFUSED. LATER ON WHEN HE WAS SHOWN HIS VISITING CARD, WHICH MENTIONED HIM AS PRESIDENT OF VISHWA HINDU PARISHAD, WEST ZON E KARNAVATI MAHANAGAR, HE ADMITTED THAT HE WAS PRESID ENT IN PAST. HE WAS ALSO ASKED WHY DONATION TO THIS PARTY OR PARTY TO WHICH VISHWA HINDU PARISHAD IS CONNECTED WAS NOT GI VEN EVEN THOUGH HE WAS CONNECTED WITH THEM. MOREOVER, ALL OT HER DONATIONS EVEN WHEN SMALL, GIVEN BY HIM ARE THROUGH CHEQUES AS SHOWN IN THE RECEIPTS FILED BY HIM. THE COPY OF AFFIDAVIT SUBMITTED BY ASSESSEE AT THE TIME OF TAKING STATEMENT IS ONLY A REITERATION OF CASH RECE IPT ISSUED EARLIER. IN NUT SHELL FOLLOWING POINTS GOES AGAINST THE ASSE SSEE'S CLAIM OF HUGE DONATION GIVEN IN CASH. (1) ASSESSEE GAVE EVEN SMALL DONATION BY CHEQUE THE REFORE IT IS AGAINST THE PRACTICE OF ASSESSEE TO PAY HUGE DON ATION BY CASH. OBVIOUSLY, CHEQUE PAYMENT CAN BE MADE IF THE ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 4 TRANSACTION HAS NOT TAKEN PLACE. BY SHOWING CASH PA YMENT WITHOUT ANY EVIDENCE EXCEPT DONATION RECEIPT IT IS CLEAR THAT IT IS NOT GENUINE AND PROVED WITH CONTEMPORARINESS. (2) IF ASSESSEE'S PARTNER HAD TRAVELED TO DELHI BY HIS CAR, HE WOULD HAVE HAD FUEL BILLS AND HOTEL RECEIPTS FOR 3- 4 DAYS (FROM 28.3.04 TO 2.3.04). IN THE ABSENCE OF ANY SUCH RECE IPT, EVEN THE CLAIM OF TRIP TO DELHI IS NOT PROVED. (3) NO PERSON WILL TRAVEL BY ROAD TO DELHI WITH RS. 40 LAKHS TO GIVE DONATION. EVEN IF DONATION IS GIVEN ON LAST DA Y BY CHEQUE/DRAFT, THE SAME COULD BE ENTITLED FOR DEDUCT ION. HENCE THERE IS NO SUBSTANCE IN ASSESSEE'S CLAIM OF LOOSIN G DEDUCTION IF PAID BY CHEQUE. (4) THE SAID PARTY IS NOT AT ALL PRESENT IN GUJARAT WHERE ASSESSEE'S ENTIRE OPERATIONS ARE THERE WHY WILL ANY ONE GIVE DISTANT UNKNOWN PERSON HUGE SUM UNLESS THE SAME IS JUST AN ENTRY AND NOT GENUINE. (5) ASSESSEE WAS NOT ABLE TO GIVE ANY DETAIL ABOUT THE SAID POLITICAL PARTY. HOW HE MET THE PRESIDENT OF THE PA RTY, WHAT EVENT INSPIRED BY ASSESSEE TO GIVE ITS ALMOST ENTIR E ANNUAL INCOME TO THE POLITICAL PARTY. (6) ASSESSEE'S MAIN PARTNER WAS PRESIDENT OF VHP WH ICH HAS AFFILIATED POLITICAL PARTIES. IF DONATION WOULD HAV E BEEN GENUINE, IT COULD HAVE GONE TO SUCH PARTY TO WHICH HE IS AFF ILIATED RATHER THAN UNKNOWN PARTY NOT EVEN PRESENT IN GUJARAT. (7) EXCEPT CASH RECEIPT THERE IS NO EVIDENCE TO PRO VE THE PAYMENT OF DONATION. ALL CIRCUMSTANCES GOES TO PROV E THAT THERE WAS NO SUCH DONATION GIVEN BUT ONLY CASH RECEIPT IS TAKEN TO CLAIM HUGE DEDUCTION OF INCOME. IN THE ABSENCE OF ANY PROOF BY CONTEMPORARY DOCUMENTARY EVIDENCE, THE CLAIM OF CASH DONATION IS NOT PROVED AND THE CLAIM IS HELD TO BE BOGUS. JUST TO DEFRAUD REVENUE OF ITS LEGITIMATE DUES WHICH WERE DISCLOSED BY ASSESSEE U/ S. 133A. ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 5 ACCORDINGLY I DISALLOW CLAIM OF DEDUCTION U/S.80GGC WITH INITIATION OF PENALTY U/S.271 (L) (C) OF I.T. ACT.' 4. BEFORE THE LEARNED CIT(A) DURING APPEAL, THE ASS ESSEE SUBMITTED THE COPY OF SUBMISSION MADE BEFORE THE AO AND HAS CONTENDED THAT HE HAS SUBMITTED THE COPY OF RECEIPT ISSUED BY THE RASHTRIYA VIKAS PARTY ALONG WITH THE AFFIDAVIT OF P RESIDENT OF THE SAID PARTY, SHRI MAHESH PRATAP SHARMA IN SUPPORT OF HIS CLAIM AND HAS ALSO STATED THAT IN THE VERIFICATION MADE BY THE AC IT, FARIDABAD U/S.133(6), THE ASSESSEE HAS CONFIRMED HAVING GIVEN THE ABOVE DONATION TO THE POLITICAL PARTY FOR WHICH RETURN HA S BEEN FILED BY THE RASHTRIYA VIKAS PARTY. THE ASSESSEE HAS STATED THAT HE HAS DISCHARGED THE ONUS LYING ON HIM TO CLAIM THE SAID DEDUCTION AND DONATION WAS MADE IN CASH ON THE LAST DATE OF PREVI OUS YEAR SO THAT HE IS ABLE TO CLAIM THE DEDUCTION IN THE SAME YEAR. THE ASSESSEE HAS FURTHER STATED THAT HE HAS GIVEN FURTHER DONATION O F RS.15 LAKHS BY CHEQUE ON 31-01-2006 RELEVANT TO THE ASSESSMENT YEA R 2006-07. THE ASSESSEE HAS CONTENDED THAT THERE IS NO REQUIRE MENT U/S 80GGC OF THE IT ACT THAT DONATION IS REQUIRED TO BE MADE THROUGH BANK ACCOUNT BY CHEQUE OR DEMAND DRAFT. THE APPELLANT HA S RELIED ON THE DECISION OF APEX COURT IN THE CASE OF MEHTA PARIKH & CO. VS. C.I.T., 30 ITR 181(SC) AND DECISION OF HON'BLE GUJARAT HIGH COURT IN THE OF GLASSLINE EQUIPMENT CO. LTD. VS. C.I.I., 253 ITR 54 5. 5. THE LEARNED CIT(A) HOWEVER, DID NOT ACCEPT THE C ONTENTION OF THE ASSESSEE AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 2.3 OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER: ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 6 2.3 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE APPELLANT AS WELL AS THE ASSESSMENT ORDER. THE ABOV E DONATION WAS MADE IN CASH ON 31-03-04 TO RASHTRIYA VIKAS PAR TY. THE ABOVE DONATION HAS BEEN CLAIMED TO HAVE BEEN MADE O N 31- 03-04. AS PER THE APPELLANT'S VERSION, THE CASH OF RS.40 LAKHS WAS CARRIED BY CAR TO DELHI AND WAS DELIVERED TO MR . M.P. SHARMA, PRESIDENT OF RASHTRIYA VIKAS PARTY, A REGIS TERED UNRECOGNIZED PARTY AS PER NOTIFICATION OF ELECTION COMMISSION DATED 22 ND MARCH, 2004. IN ABOVE SITUATION, THE ONUS LIES ON THE ASSESSEE TO PROVE THAT HIS EXPLANATION IS CORRECT A ND SUBSTANTIATE IT BY THE EVIDENCE. IN THIS REGARD, TH E AO HAS EXAMINED THE ASSESSEE AND HAS BROUGHT OUT THAT APPE LLANT STARTED FROM AHMEDABAD ON 29-03-04 AND RETURNED ON 02-04- 04. FOR THESE FOUR DAYS, THE APPELLANT HAS NOT BEEN ABLE TO SUBMIT ANY INDEPENDENT EVIDENCE IN THE FORM OF BILL S FOR FILLING OF PETROL IN CAR OR BOARDING OR LODGING AT ANY PLACE A ND THE APPELLANT HAS MERELY DRAWN A VOUCHER OF RS.6,550/- AS THE EXPENSES FOR THE SAID TOUR. THE APPELLANT'S CONTENT ION IN THE STATEMENT THAT HOTELS, PETROL PUMPS ON THE HIGHWAY DO NOT GIVE BILLS, IS NOT ACCEPTABLE AS THIS IS NOT THE ACTUAL PRACTICE. SO THE APPELLANT HAS NOT BEEN ABLE TO SUBMIT SUPPORTING BI LLS REGARDING HIS EXPLANATION OF CARRYING CASH OF RS.40 LAKHS TO DELHI BY WAY OF ANY INDEPENDENT EVIDENCE. THE AO HAS ALSO BROUGHT OUT THAT PARTNER OF THE APP ELLANT VIZ. SHRI ROHITBHAI ISHWARLAL CHOKSI WHO HAS CARRIE D THE MONEY TO DELHI HAS NOT BEEN ABLE TO EVEN NAME THE FUNCTIO N, DURING WHICH, HE MET THE PRESIDENT OF RASHTRIYA VIKAS PART Y AND HE COULD NOT EVEN NAME A SINGLE WORK WHICH INSPIRED TH E APPELLANT TO MAKE THE ABOVE CONTRIBUTION. THE AO HAS ALSO BROUGHT OUT THAT VARIOUS DISCREPANC IES IN THE STATEMENT OF SHRI ROHITBHAI I. CHOKSI, PARTNER OF THE APPELLANT REGARDING THE CARRYING OF MONEY TO DELHI, ACQUAINTANCE OF THE APPELLANT WITH THE DONEE AND PURPOSE OF DONATION AS HAVE BEEN BROUGHT OUT IN THE ASSESSMENT ORDER REPRODUCED EARLIER. IN VIEW OF ABOVE, IT IS APPARENT THAT APPELLANT IS NOT ABLE TO DISCHARGE THE ONUS LYING ON HIM WHEN THE AMOUNT INVOLVED IS ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 7 OF RS.40 LAKHS. THIS HAS TO BE SEEN IN THE CONTEXT THAT THE ASSESSEE HAS DISCLOSED RS.55.62 LAKHS AS HIS UNACCO UNTED INCOME DURING THE COURSE OF SURVEY. THE ABOVE CLAIM OF DONATION GOES TO REDUCE THE INCOME DISCLOSED DURING THE SURVEY. FURTHER, THE RECEIPTS IN HANDS OF RASHTRIYA VIKAS PARTY ARE EXEMPT FROM TAX U/S. 13A OF I.T. ACT AND AMOUNT HAS BEEN CLAIMED AS GIVEN IN CASH. IN SUCH CIRCUMSTANCES, HE AVY ONUS LIES ON THE APPELLANT TO SUPPORT THE EXPLANATION WI TH EVIDENCES WHICH HAS NOT BEEN DONE. THE APPELLANT'S CONTENTION THAT DONATION IS SUPPORT ED BY THE AFFIDAVIT AND THE RECEIPT IS NOT ACCEPTABLE BEC AUSE FOR THAT PURPOSE, THE AMOUNT HAS BEEN CLAIMED TO BE CARRIED TO DELHI. THE APPELLANT HIMSELF HAS NOT BEEN ABLE TO PROVE TH AT RS.40 LAKHS IN CASH WERE CARRIED TO DELHI AS DISCUSSED BY THE AO DURING THE EXAMINATION OF SHRI ROHIT CHOKSI. AS REG ARDS THE VERIFICATION CARRIED OUT BY THE ACIT, FARIDABAD, IT IS SEEN THAT IT WAS A LETTER ISSUED U/S.!33(6). IN RESPONSE TO WHIC H, THE APPELLANT HAS CONFIRMED HAVING GIVEN THE ABOVE CONT RIBUTION BUT THAT IN ANY CASE DOES NOT PROVE THE GENUINENESS OF THE SAID CONTRIBUTION AS IT IS VERSION OF APPELLANT WHICH HA S NOT BEEN PROVED. AS REGARDING THE CLAIM OF LATER DONATION TH AT DOES NOT HELP IN PROVING THAT CURRENT TRANSACTION IS GENUINE AS EVERY EVENT HAS ITS OWN CIRCUMSTANCES. AS FAR AS THE DECI SION RELIED UPON BY THE APPELLANT I.E. MEHTA PARIKH & CO. LTD. VS. C.I.T. IS CONCERNED, THE FACTS THERE WERE DIFFERENT AS THE PA RT OF THE EXPLANATION OF THE ASSESSEE WAS ACCEPTED AND PART O F THE EXPLANATION WAS REJECTED. ALSO, THE CASH BOOK OF TH E ASSESSEE WAS ACCEPTED. SO, THE FACTS OF THE CITED CASE ARE DISTINGUISHABLE. THE FACTS OF THE CASE OF GLASSLINE EQUIPMENT CO. LTD. VS. C.I.T. ARE ALSO DISTINGUISHABLE AS IN THAT CASE, A PORTION OF THE AFFIDAVIT WAS IGNORED AND FINDING OF THE COURT WAS AS UNDER: 'IT WAS NOT OPEN TO THE REVENUE TO IGNORE THAT PORT ION OF THE AFFIDAVIT WHEREIN THE CAPITALIZED EXPENSES WERE STATED TO BE INCURRED FOR SETTING UP OF THE PLANT WHEN IT WAS AC CEPTING THE OTHER PORTION OF THE AFFIDAVIT WHERE CERTAIN ITEMS WERE EXPRESSLY EXCLUDED; WHOLE OF THE PRE-COMMENCEMENT EXPENDITURE WAS INCLUDIBLE IN THE ACTUAL COST OF PLANT.' ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 8 THE ABOVE FINDINGS ARE NOT APPLICABLE IN THE PRESEN T CASE AS THE APPELLANT HAS BEEN THOROUGHLY EXAMINED AND V ARIOUS DISCREPANCIES WERE BROUGHT OUT BY THE AO IN THE EXP LANATION GIVEN BY THE APPELLANT REGARDING THE DONATION OF RS .40 LAKHS. IN VIES OF THE ABOVE DISCUSSION, THE ADDITION OF RS .40 LACS IS CONFIRMED AND THIS GROUND OF APPEAL IS REJECTED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS BEFORE THE AUTHORITIES BELOW AND REFERR ED TO SEVERAL DOCUMENTS IN THE PAPER BOOK WHICH ARE RECEIPTS OF D ONATION ISSUED BY RASTRIYA VIKAS PARTY, THEIR PAN AND THEIR INCOME TAX RETURN WITH AFFIDAVIT OF SHRI M. P. SHARMA. HE HAS SUBMITTED TH AT THE RECEIPT OF DONATION WAS REPORTED TO THE ELECTION COMMISSION OF INDIA AND IT IS NOT IN DISPUTE THAT RASTRIYA VIKAS PARTY IS A POLIT ICAL PARTY REGISTERED UNDER THE REPRESENTATION OF PEOPLES ACT. COPY OF TH E NOTIFICATION OF THE ELECTION COMMISSION OF INDIA IS ALSO FILED ON R ECORD. HE HAS ALSO REFERRED TO THE QUERIES ISSUED BY ACIT, FARIDABAD I N THE CASE OF RASTRIYA VIKAS PARTY OF RS.40 LACS ON 23-05-2006. T HE RECEIPT OF THE SAME AND AFFIDAVIT ARE ALSO FILED ON RECORD. HE HAS SUBMITTED THAT STATEMENT OF ROHITBHAI I. CHOKSI WAS RECORDED IN WH ICH HE HAS CONFIRMED TO HAVE GIVEN RS.40 LACS DONATION TO RAST RIYA VIKAS PARTY. HE HAS SUBMITTED THAT EVIDENCES ON RECORD CLEARLY S UPPORT THE CASE OF THE ASSESSEE. 7. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SURVEY WAS CON DUCTED IN THE CASE OF THE ASSESSEE IN WHICH THE ASSESSEE SURRENDE RED AN AMOUNT OF RS.55,62,000/- ON ACCOUNT OF DIFFERENCE OF STOCK AND INVESTMENT IN FURNITURE, THEREFORE, IN ORDER TO AVOID PAYMENT OF TAXES THE ASSESSEE ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 9 HAS SHOWN DONATION TO POLITICAL PARTY. HE HAS REFER RED TO THE OBJECTIONS AND THE REASONS GIVEN BY THE AO FOR DENY ING THE CLAIM OF THE ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. SECTION 80 GGC OF THE IT ACT PROVIDES AS UN DER: DEDUCTION IN RESPECT OF CONTRIBUTIONS GIVEN BY ANY PERSON TO POLITICAL PARTIES. 80GGC. IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE, BEING ANY PERSON, EXCEPT LOCAL AUTHORITY AND EVERY ARTIFI CIAL JURIDICAL PERSON WHOLLY OR PARTLY FUNDED BY THE GOVERNMENT, T HERE SHALL BE DEDUCTED ANY AMOUNT OF CONTRIBUTION MADE BY HIM, IN THE PREVIOUS YEAR, TO A POLITICAL PARTY. EXPLANATION. FOR THE PURPOSES OF SECTIONS 80GGB AND 80GGC, POLITICAL PARTY MEANS A POLITICAL PARTY RE GISTERED UNDER SECTION 29A OF THE REPRESENTATION OF THE PEOPLE ACT , 1951 (43 OF 1951).] ACCORDING TO THE ABOVE PROVISIONS FOR COMPUTING TOT AL INCOME OF THE ASSESSEE THERE SHALL BE DEDUCTION OF THE AMOUNT OF CONTRIBUTION MADE BY THE ASSESSEE IN THE PREVIOUS YEAR TO A POLITICAL PARTY. THE POLITICAL PARTY MEANS A POLITICAL PARTY REGISTERED UNDER THE REPRESENTATION OF PEOPLES ACT. IT IS NOT IN DISPUTE THAT RASTRIYA VIK AS PARTY IS A POLITICAL PARTY REGISTERED UNDER THE REPRESENTATION OF PEOPLE S ACT. THE ASSESSEE HAS FURNISHED STATUTORY FORMS AND NOTIFICA TION OF THE ELECTION COMMISSION OF INDIA WHO HAVE CERTIFIED RAS TRIYA VIKAS PARTY IN QUESTION TO BE RECOGNIZED NATIONAL PARTY. THE AS SESSEE FILED RECEIPT OF RS.40 LACS WHICH WAS PAID AS DONATION/CO NTRIBUTION TO RASTRIYA VIKAS PARTY WHICH IS ALSO ASSESSED TO TAX AND FILED RETURN OF ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 10 INCOME FOR ASSESSMENT YEAR UNDER APPEAL. AFFIDAVIT OF SHRI M. P. SHARMA OF RASTRIYA VIKAS PARTY IS ALSO FILED IN WHI CH THEY HAVE CONFIRMED TO HAVE RECEIVED CONTRIBUTION OF RS.40 LA CS FROM THE ASSESSEE. SUCH DONATION WAS REPORTED TO THE ELECTIO N COMMISSION OF INDIA. THE AO IN THE CASE OF RASTRIYA VIKAS PARTY I SSUED QUERY LETTER TO THE ASSESSEE CALLING FOR INFORMATION OF PAYMENT OF DONATION TO THEM AND SUCH LETTER (PB-54) WAS ISSUED WITH THE APPROVA L OF CCIT, FARIDABAD AND THE ASSESSEE ALSO CONFIRMED TO THE AO OF RASTRIYA VIKAS PARTY REGARDING PAYMENT OF DONATION TO THEM. THE ASSESSEE NOT ONLY IN THE ASSESSMENT YEAR UNDER BUT IN SUBSEQ UENT YEAR ON 30-01-2006 ALSO MADE DONATION/CONTRIBUTION TO RASTR IYA VIKAS PARTY OF RS.15 LACS WHICH IS ALSO CONFIRMED BY THEM THROU GH AFFIDAVIT. THESE EVIDENCES ON RECORD CLEARLY SUPPORT THE CONTE NTION OF THE ASSESSEE THAT THE ASSESSEE HAS MADE CONTRIBUTION TO POLITICAL PARTY A SUM OF RS.40 LACS IN THE ASSESSMENT YEAR UNDER APPE AL. THUS, THE ASSESSEE COMPLIED WITH THE PROVISIONS OF SECTION 80 GGC OF THE IT ACT. THERE IS NO BAR UNDER THE LAW FOR MAKING CONTR IBUTION EITHER BY CASH OR BY CHEQUES. THERE IS ALSO NO CONDITION AS T O AT WHICH PLACE DONATION/CONTRIBUTION IS TO BE MADE. THE REASONS GI VEN BY THE AO FOR DENYING THE CLAIM OF THE ASSESSEE ARE THUS ALIEN TO THE PROVISIONS OF SECTION 80 GGC OF THE IT ACT. WE ARE, THEREFORE, OF THE VIEW THAT THE ASSESSEE SATISFIED ALL THE CONDITIONS FOR GRANT OF DEDUCTION U/S 80 GGC OF THE IT ACT. WE ACCORDINGLY, SET ASIDE THE OR DERS OF THE AUTHORITIES BELOW AND DIRECT THE AO TO GRANT DEDUCT ION TO THE ASSESSEE ACCORDINGLY. IN THE RESULT, GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 11 9. ON GROUND NO.2, THE ASSESSEE CHALLENGED THE DISA LLOWANCE OF TRAVELING EXPENSES OF RS.6,550/-. THE ASSESSEE COUL D NOT PRODUCE THE BILLS OF THE EXPENSES THOUGH THE SAME WERE REFL ECTED IN THE BOOKS OF ACCOUNTS. THE LEARNED CIT(A) CONFIRMED THE ADDIT ION BECAUSE THE TRAVELING EXPENSES ARE NOT SUPPORTED BY EVIDENCES. ON CONSIDERATION OF THE ABOVE FACTS, WE DO NOT FIND ANY JUSTIFICATIO N TO INTERFERE WITH THE ORDERS OF THE LEARNED CIT(A). SINCE THE ASSESSEE C LAIMED DEDUCTION OF THE EXPENDITURE, THEREFORE, BURDEN IS UPON THE A SSESSEE TO PROVE THE SAME THROUGH EVIDENCES. THE ASSESSEE HAS HOWEVE R, FAILED TO PROVE THE SAME, THEREFORE GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IS DISMISSED. 10. ON GROUND NO.3, THE ASSESSEE CHALLENGED THE DIS ALLOWANCE OF RS.27,000/- ON ACCOUNT OF TELEPHONE AND MOBILE PHON E EXPENSES. THE AO HELD THAT THE ASSESSEE HAS USED MOBILE PHONE S AND TELEPHONE FOR PERSONAL PURPOSES. ACCORDINGLY, ONE F IFTH OF THE EXPENSES WERE DISALLOWED. THE LEARNED CIT(A) CONFIR MED THE ADDITION BECAUSE THE ASSESSEE FAILED TO PROVE THAT THE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOS E OF BUSINESS. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF THE VIE W NO INTERFERENCE IS CALLED FOR IN THE MATTER. THE ASSESSEE IS A FIRM AN D HAS NOT PRODUCED ANY LOG BOOK MAINTAINED FOR MAINTAINING THE DETAILS OF THE CALLS MEANT FOR BUSINESS PURPOSE. THEREFORE, PERSONAL USER OF T ELEPHONE AND MOBILE PHONE CANNOT BE RULED OUT. ADDITION IS ACCOR DINGLY CONFIRMED AND GROUND NO.3 OF THE APPEAL OF THE ASSESSEE IS DI SMISSED. ITA NO.2972/AHD/208 SONII ISHWARLAL HARJIVANDAS VS DCIT, CIRCLE-10, AHM EDABAD 12 11. GROUND NO.4 OF THE APPEAL OF THE ASSESSEE IS RE GARDING CHARGING OF INTEREST U/S 234B AND 234C OF THE IT AC T WHICH IS MANDATORY AND CONSEQUENTIAL. THE SAME IS ACCORDINGL Y DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD