SHRI. BHANWARLAL H CHANDAK, Mumbai V. ITO 35(1)(2), Mumbai

ITA 4815/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6939 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 18-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: KUMAR U KALE
• Keywords: Charitable institution; Set aside
• Section: 143(3); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 4815 / /20 19 (. . 2014-15 ) ITA NO.4815/MUM/2019 (A.Y.2014-15) SHRI BHANWARLAL H. CHANDAK, 9- A, GIRI APARTMENT, J.B. NAGAR, ANDHERI (EAST), MUMBAI-400059 /VS. ITO-35(1)(2), ROOM NO. 904, 9 TH FLOOR, C-41 TO C-43, G BLOCK, KAUTILYA BHAVAN, BKC, BANDRA (E), MUMBAI-400051. ( / APPELLANT ) ( / RESPONDENT ) PAN NO. AAVPC9789M / APPELLANT BY : SH. KUMAR U. KALE, ADVOCATE / RESPONDENT BY : SH. SANJAY J. SETHI / DATE OF HEARING : 03/06/2021 / DATE OF PRONOUNCEMENT : 10/08/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-46, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 01.05.2019 FOR THE ASSESSMENT YEARS (AY) 2014-15. 2. SHRI KUMAR U. KALE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE SOLITARY GROUND RAISED BY THE ASSESSEE IN APPEAL IS AGAINST THE DISALLOWANCE OF RS. 1,25,000/- CLAIMED BY THE ASSESSEE/APPELLANT AS DEDUCTION UNDER SECTION 80GGA OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. THE LD. COUNSEL NARRATING FACTS OF THE CASE SUBMITTED THAT, THE ASSESSEE HAD MADE 2 . 4815 / /20 19 (. .2014-15 ) ITA NO. 4815/MUM/2019 (AY-2014-15) DONATION OF RS. 1,25,000/- TO NAVJEEVAN CHARITABLE TRUST BY WAY OF CHEQUE AND HAD CLAIMED DEDUCTION UNDER SECTION 80GGA OF THE ACT IN RETURN OF INCOME FOR A.Y. 2014-15. THE ASSESSING OFFICER (AO) RE-OPENED THE ASSESSMENT FOR AY 2014-15 ON THE GROUND THAT DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80GGA OF THE ACT IN RESPECT OF DONATION MADE BY THE ASSESSEE TO NAVJEEVAN CHARITABLE TRUST IS NOT ALLOWABLE. THE AO IN ASSESSMENT ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT DISALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80GGA OF THE ACT MERELY ON SUSPICION. UNDISPUTEDLY, AT THE TIME OF MAKING DONATION TO NAVJEEVAN CHARITABLE TRUST, THE SAID TRUST WAS DULY NOTIFIED UNDER SECTION 35AC VIDE NOTIFICATION NO. SO 1860(E) DATED 1.08.2011. ONE OF THE TRUSTEE VIDE IN RESPONSE TO SHOW-CAUSE NOTICE ISSUED BY THE AO CONFIRMED THAT THE NAME OF THE TRUST APPEARS AT SERIAL NO. 14 IN THE NOTIFICATION DATED 11.08.2011 AND THE TRUST IS ELIGIBLE FOR ACCEPTING DONATION UNDER SECTION 35AC OF THE ACT. THE STATEMENT MADE BY ONE OF THE ALLEGED TRUSTEE IN RESPECT OF BOGUS DONATIONS IS UNSUBSTANTIATED. THE LD. AUTHORIZED REPRESENTATIVE (AR) POINTED THAT THE ASSESSEE HAD MADE PAYMENT OF RS. 1,25,000/- AGAINST RECEIPT DATED 21.02.2014 AT PAGE NO. 2 OF THE PAPER BOOK. THE LD. AR FURTHER POINTED THAT THE DONATION AMOUNT WAS DEBITED TO THE BANK ACCOUNT OF THE ASSESSEE WITH CENTRAL BANK OF INDIA ON 22.02.2014. THE SAME IS EVIDENT FROM BANK STATEMENT AT PAGE NOS. 4 & 5 OF THE PAPER BOOK. THERE IS NO EVIDENCE INDICATING THAT THE ASSESSEE HAS MADE PAYMENT THOUGH BANKING CHANNEL AND HAS RECEIVED BACK THE SAME AMOUNT IN CASH. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF JADSTONE TRADING PVT. LTD. V/S ITO IN ITA NO. 7143 & 6628/MUM/2018 FOR AY 2013-14 AND 2014-15, RESPECTIVELY DECIDED ON 12.06.2019 AND ON THE CASE OF MUDRA SHARE AND STOCK BROKERS LTD. V/S ITO IN ITA NO. 2363/MUM/2019 FOR AY 3 . 4815 / /20 19 (. .2014-15 ) ITA NO. 4815/MUM/2019 (AY-2014-15) 2013-14 DECIDED ON 01.12.2020. THE LD. AR POINTED THAT IN THE AFORESAID CASES, THE AO HAD DISALLOWED DONATION MADE BY THE ASSESSEE TO NAVJEEVAN CHARITABLE TRUST. THE TRIBUNAL DELETED THE DISALLOWANCE AS THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAS RECEIVED BACK THE DONATION AMOUNT FROM THE TRUST. THE ADDITION WAS MADE MERELY ON THE BASIS OF SURMISES AND CONJECTURES. 4. ON THE OTHER HAND, SHRI SANJAY J. SETHI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT SEARCH AND SURVEY OPERATION WAS CARRIED OUT BY THE INVESTIGATION WING ON NAVJEEVAN CHARITABLE TRUST. DURING SEARCH OPERATION, IT WAS FOUND THAT THE TRUST HAD ACCEPTED DONATIONS AND RETURNED THE AMOUNT TO DONORS IN CASH AFTER CHARGING COMMISSION. THE NAME OF THE ASSESSEE FIGURES IN THE LIST OF DONORS, WHO HAD TAKEN UNDUE ADVANTAGE OF THE BOGUS DONATIONS. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE HAD OSTENSIBLY MADE DONATION OF RS. 1,25,000/- TO NAVJEEVAN CHARITABLE TRUST IN THE PERIOD RELEVANT TO A.Y. 2014-15. THE ASSESSEE IN SUPPORT OF DONATION MADE, HAS FILED COPY OF BANK STATEMENT AND RECEIPT ISSUED BY THE TRUST ACKNOWLEDGING THE RECEIPT OF DONATION MADE BY THE ASSESSEE. THE ASSESSMENT FOR AY 2014-15 WAS RE-OPENED IN THE CASE OF ASSESSEE TO DISALLOW THE BENEFIT OF DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80GGA OF THE ACT IN RESPECT OF DONATION MADE TO NAVJEEVAN CHARITABLE TRUST. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE AO HAS MERELY RAISED A SUSPICION THAT THE POSSIBILITY OF NAVJEEVAN CHARITABLE TRUST ACCEPTING DONATION AND RETURNING THE AMOUNT BACK TO THE DONORS AFTER CHARGING SOME COMMISSION CANNOT BE RULLED OUT. NO POSITIVE EVIDENCE IS BROUGHT ON RECORD BY THE REVENUE TO SUBSTANTIATE THAT THE DONATION 4 . 4815 / /20 19 (. .2014-15 ) ITA NO. 4815/MUM/2019 (AY-2014-15) MONEY HAD INFACT TRAVELLED BACK TO THE ASSESSEE IN THE FORM OF CASH. THE DISALLOWANCE HAS BEEN MADE MERELY ON SUSPICION. 6. I FIND THAT IN IDENTICAL SET OF FACTS, THE CO-ORDINATE BENCH IN THE CASE OF JADSTONE TRADING PVT. LTD. (SUPRA) DELETED THE ADDITION BY OBSERVING AS UNDER: 4. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. ASSESSEE HAS CHALLENGED THE ADDITION ON VARIOUS GROUNDS. HOWEVER THE MAIN ISSUE REMAINS THAT THE CHALLENGE TO THE ADDITION OF RS.500,000 BEING GIVEN TO CHARITABLE TRUST AS DONATION ON THE GROUND THAT ON THE SEARCH OF THE SAID CHARITABLE TRUST IT HAS BEEN FOUND THAT IT HAS BEEN INCURRING ONLY BOGUS EXPENDITURE. THIS LED TO THE PRESUMPTION OF THE ASSESSING OFFICER THAT THE SAID SUM OF RS.500,000 HAS ACTUALLY COME TO THE ASSESSEE CLANDESTINELY. IN MY CONSIDERED OPINION IT IS UNDISPUTED THAT ASSESSEE HAS SUBMITTED THE RECEIPT FOR THE DONATION. THE SAME HAS BEEN PAID BY BANKING CHANNEL. THERE IS NO EVIDENCE ON RECORD THAT THE SAME AMOUNT HAS BEEN RECEIVED BACK BY THE ASSESSEE FROM THE SAID CHARITABLE TRUST. IN THESE CIRCUMSTANCES IN MY CONSIDERED OPINION THIS ADDITION IS SOLELY BASED ON SURMISE AND CONJECTURE AND NOT SUSTAINABLE IN LAW. ACCORDINGLY I SET ASIDE THE ORDER'S OF AUTHORITIES BELOW AND DELETE THE ADDITION. 7. I FIND MERIT IN THE SUBMISSIONS MADE BY LD. COUNSEL FOR THE ASSESSEE. THUS, IN THE FACTS OF THE CASE AND THE DECISION RENDERED BY THE CO-ORDINATE BENCH REFERRED ABOVE, THE IMPUGNED ORDER IS SET-ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY , THE 10 TH DAY OF AUGUST, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER /MUMBAI, /DATED: 10/08/2021 SK, PS 5 . 4815 / /20 19 (. .2014-15 ) ITA NO. 4815/MUM/2019 (AY-2014-15) COPY OF THE ORDER FORWARDED TO : 1. /THE APPELLANT , 2. / THE RESPONDENT. 3. ( )/ THE CIT(A)- 4. CIT 5. , . . ., /DR, ITAT, MUMBAI 6. [ /GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI