Ankit Mahendrabhai Shah, Ahmedabad V. The ITO, Ward-1(3)(1), Ahmedabad

ITA 466/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8621 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 18-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH (Conducted Through Virtual Court) Before: Shri Mahavir Prasad, Judicial Member And Shri Amarjit Singh, Accountant Member Ank it Mahendrabhai Shah E-3, Ayod hya Nagar Flat, Opp . Munim Hall, Shantin agar, Us man pura, Ah me dab ad PAN: ANTPS6591 E (Appellant) Vs The ITO, Ward-1(3)(1), Ah med abad (Resp ondent) Revenue by : Shri R. R. Ma kwana , Sr. D. R. Asses see b y : Shri M. K. Patel, A. R. Date of hearing : 28-10 -2 021 Date of pronouncement : 15-11 -2 021 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- This assessee’s appeal for A.Y. 2014-15, arises from order of the CIT(A)-6, Ahmedabad dated 31-12-2018, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”. 2. The solitary ground of appeal is directed against the order of ld. CIT(A) in confirming the disallowance of deduction of Rs. 10,50,000/- ITA No. 466 /Ahd/2019 Assessment Year 2014-15 I.T.A No. 466/Ahd/2019 A.Y. 2014-15 Page No Ankit Mahendrabhai Shah vs. ITO 2 claimed u/s. 35(1)(ii) of the act for the donation made to Herbicure Healthcare Bio Herbal Research Foundation. 3. The fact in brief is that during the course of assessment, the Assessing Officer noticed that assessee has claimed deduction of Rs. 10,50,000/- u/s. 35(1)(ii) towards the donation made to Herbicuare Healthcare Bio Herbal Research Foundation, Kolkata. The Assessing Officer stated that as per the information survey was carried out at the Herbicuare Healthcare Bio Herbal Research Foundation and it was found that the aforesaid donar/beneficiary were engaged in bogus donation to facilitate accommodation entries. On query, the assessee explained that he has given donation by way of account payee cheque to Herbicuare Healthcare Bio Herbal Research Foundation, Kolkata and pointed out that no opportunity of cross objection was provided and no evidence of returning any cash back against donation was provided. The Assessing Officer has not accepted the submission of the assessee and disallowed the claim of deduction treating the same as bogus transaction and added to the total income of the assessee. 4. The assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee holding that the Assessing Officer has clearly mentioned that Income Tax Department Investigation Wing Kolkata in a survey carried out on Herbicuare Healthcare Herbal Research Foundation, Kolkata found that this institute was involved in facilitating bogus donation u/s. 35(1)(ii). Subsequently, the CBDT vide notification I.T.A No. 466/Ahd/2019 A.Y. 2014-15 Page No Ankit Mahendrabhai Shah vs. ITO 3 dated 6-09-2016 had cancelled the approval given to Herbicuare Healthcare Herbal Bio Research Foundation, Kolkata. 5. During the course of appellate proceedings before us, the ld. counsel has contended that identical issue on similar fact has been adjudicated by the ITAT Ahmedabad in favour of the assessee on the ground that registration of that institution was cancelled on 6-09-2016 and at the time of making donation by the assessee the said institution was holding the registration u/s. 35(1)(ii) of the act. In this regard, the ld. counsel has specifically referred the decision of ITAT Ahmedabad in the case of Kaustubhbhai Dhirajlal Patel vide ITA No. 210/Ahd/2019 dated 23-02-2021. On the other hand, the Ld. Departmental Reprehensive could not controvert this undisputed fact that the impugned issue is squarely covered in favour of the assessee by the aforesaid judgment. 6. Heard both the sides and perused the material on record. With the assistance of ld. representatives, we have gone through the decision as referred above. The relevant part of the decision is reproduced as under:- “6. We have heard the respective parties and we have also perused the relevant materials available on record. 7. Upon perusal of the judicial pronouncement as relied upon by the Ld. Counsel appearing for the assessee it appears that the issue is squarely covered in favor of the assessee. While dealing with the issue the Coordinate Bench is observed as follows:- "6. We have also carefully considered the judgment passed by the Ld. Tribunal in ITA No. 2318/Ahd/2017 for A.Y. 2014-15, the relevant portion dealing with the issue is as follows:- "5. We have duly considered rival contentions and gone through the record carefully. In the case of S.G. Vat care P. Ltd. (Supra), the Tribunal has recorded the following finding: 2.1n 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 Healthcare Bio-Herbal Research Foundation. 3.Brief facts of the case are that the assessee has 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 the donee I.T.A No. 466/Ahd/2019 A.Y. 2014-15 Page No Ankit Mahendrabhai Shah vs. ITO 4 wherein it revealed to the Revenue that this concern was misusing the benefit of notification issued by the Income Tax Department. 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 that survey report registration granted to its favour was 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. 4. Before us, the ld. counsel for the assessee contended that donations were given on 25.3.2014. At that point of time, donee was notified as eligible institution and fall within the 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 can avail donation from the society. 5. The Id. 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 gone through the record carefully. The AO is harping upon an information supplied by the survey tern of Calcutta. He has not specifically recorded statement of representatives of the donee. He has not brought on record a specific evidence wherein donee has deposed that donations received from the assessee was paid back in cash after 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 brought 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 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." 6. There is no disparity on the facts. On the basis 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 ofS.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 dismissed." From the above judgments it appears that the case is squarely covered in favour of the assessee and in the absence of any changed facts and circumstances of the case we find it fit to allow the appeal preferred by the assessee. Thus, addition is hereby deleted. 7. In the result, assessee's appeal is allowed." Thus, respectfully relying upon the same we do not hesitate to allow the appeal filed by the assessee by deleting the disallowance made by revenue to the tune of Rs. 26,50,000/- relating to the claim of donation made by the assessee to School of Human Genetics & Population Health(SHG&PH). We, therefore, delete such disallowance made by revenue.” It is clear from the decision of Co-ordinate Bench as cited above that similar issue on identical facts has been adjudicated in favour of the assessee. Since identical issue was dealt with by the Tribunal as cited supra, following the I.T.A No. 466/Ahd/2019 A.Y. 2014-15 Page No Ankit Mahendrabhai Shah vs. ITO 5 principle of consistency, the appeal of the assessee is allowed and addition is deleted. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 15-11-2021 Sd/- Sd/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 15/11/2021 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद