ASST CIT CIR 4, THANE V. RAJ ENTERPRISES, THANE

ITA 6379/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2275 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim
• Section: 133(6)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH D, MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.6379/MUM/2014 FOR ASSESSMENT YEAR: 2010-11 ACIT CIRCLE-4, 6 TH FLOOR, ASHAR IT PARK,ROAD NO. 16Z, WAGLE INDL. ESTATE, THANE(W) -400602. VS. M/S RAJ ENTERPRISES 102, NEW KHOKHANI BHAVAN, NAVGHAR, VASHI ROAD WEST, THANE-401202. PAN: AAGFR4981D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI NITIN WAGHMODE (DR) ASSESSEE BY : SHRI SUBODH RATNAPARKHI (AR) DATE OF HEARING : 12.07.2016 DATE OF PRONOUNCEMENT : 27.07.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-II, THANE DATED 16.07.2014 FOR AY 2010 -11 ON THE FOLLOWING G ROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A)-I, THANE HAS ERRED IN ALLOWING THE DEDUCTION U/S 35AC OF RS. 1,00,00,000/- ON THE GROUND THAT THE ASSESSEE HAS PAID DONATION TO M AHILA UTKARSH SANSTHAN, INDORE IGNORING THE FACT THAT THE MAHILA UTKARSH SA NSTHAN, INDORE HAD CATEGORICALLY DENIED RECEIVING DONATION FROM THE M/ S RAJ ENTERPRISES VIDE LETTER DATED 10.01.2013 AND 04.02.2013 DULY SIGNED BY THE CHAIRPERSON DR. SONIA SHARMA DURING THE ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A)-I, THANE HAS ERRED IN ACCEPTING THE SUDDEN CHANGED VER SION OF DR. SONIA SHARMA, CHAIRPERSON REGARDING RECEIPT OF DONATION F ROM THE ASSESSEE DISREGARDING THE SPECIFIC DENIAL OF RECEIPT OF DONA TION VIDE LETTER DATED 10.01.2013 AND 04.02.2013 WHEREIN SHE HAS CATEGORIC ALLY STATED THAT THERE IS A BOGUS ACCOUNT BEING RUN IN THE NAME OF PRESIDENT & TREASURER OF MAHILA UTKARSH SANSTHAN, INDORE BY SOME PEOPLE FROM WHICH BOGUS CERTIFICATES U/S 35AC ARE BEING ISSUED TO CLAIM INCOME TAX RELAXATIO N. IT HAS FURTHER BEEN STATED IN THE LETTER DATED 10.01.2013 THAT THE MAHI LA UTKARSH SANSTHAN WAS 2 ITA NO. 6379/M/2014 M/S RAJ ENTERPRISES. NOT IN POSSESSION OF BANK PASS BOOK OR CHEQUE BOOK OF BANK ACCOUNT WITH KOTAK MAHINDRA BANK, KOLKATA. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A)-I, THANE HAS ERRED IN NOT APPRECIATING THE CONTRADICTI ON IN THE STATEMENTS OF DR. SONIA SHARMA WHEREIN SHE HAS DENIED THE RECEIPT S OF DONATIONS VIDE LETTER DATED 10.01.2013 AND 04.01.2013 AND DISREGAR DING THE FACT OF FILLING WRIT PETITION NO. 8690/2010 IN THE HON'BLE HC OF MA DHYA PRADESH, BENCH AT INDORE IN WHICH SHE HAS ALLEGED THAT A FRAUD HAS BEEN COMMITTED BY SOME PERSONS FROM THE SAID BANK ACCOUNT WITH KOTAK MAHIN DRA BANK AND A COMPLAINT LETTER DATED 19.05.2010 WAS ALSO FILED WI TH THE BANK IN THIS REGARD. 4. THE APPELLANT PRAYS THE ORDER OF THE LD. CIT(A)- I, THANE, MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY GROUND/GROUNDS, WHICH MAY BE NECESSARY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT, FILED ITS RETURN OF INCOME FOR RELEVANT AY ON 25.09.2010 SHOWING TOTAL INCOME OF RS. 8,08,00,450/-. THE RETU RN OF INCOME AS SELECTED FOR SCRUTINY. WHILE FRAMING ASSESSMENT ORDER, THE ASSES SING OFFICER (AO) OBSERVED THAT ASSESSEE CLAIMED DONATION OF RS.1,00,00,000/- U/S 35AC TO MAHILA UTKARSH SANSTHAN (FOR SHORT MUS) INDORE AND CLAIMED DEDUC TION U/S 80G. THE ASSESSING OFFICER (AO) CALLED FOR COPY OF RECEIPT O F DONATION FROM THE ASSESSEE. NO REPLY WAS FURNISHED BY ASSESSEE. THE AO ISSUED N OTICE U/S 133(6) OF I.T. ACT TO THE MUS. THE MUS DENIED TO HAVE RECEIVED ANY DON ATION FROM ASSESSEE VIDE ITS REPLY DATED 10.01.2013 AND 04.02.2013. THE WAS SHOW CAUSED AS TO WHY THE CLAIM OF DONATION BE NOT TREATED AS NON-GENUINE AND ADDED TO THE TOTAL INCOME. ASSESSEE SUBMITTED ITS REPLY DATED 15.03.2013. THE REPLY OF ASSESSEE WAS NOT CONSIDERED SATISFACTORY AND THE AO REJECTED THE CLA IM OF DEDUCTION U/S 35AC OF THE ACT AND ADDED RS. 1,00,00,000/- TO THE TOTAL IN COME OF ASSESSEE IN THE ASSESSMENT ORDER DATED 18.03.2013. AGGRIEVED BY TH E ORDER OF AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CO NSIDERING THE CONTENTION OF ASSESSEE ALLOWED THE APPEAL OF THE ASSESSEE IN THE IMPUGNED ORDER DATED 16.07.2013. AGGRIEVED BY WHICH THE REVENUE HAS FILE D THE PRESENT APPEAL BEFORE US. 3 ITA NO. 6379/M/2014 M/S RAJ ENTERPRISES. 3. WE HAVE HEARD LD DEPARTMENTAL REPRESENTATIVE (DR) F OR REVENUE AND LD AUTHORISED REPRESENTATIVE (AR) FOR ASSESSEE AND PER USED THE MATERIAL AVAILABLE ON RECORD. LD. DR FOR REVENUE ARGUED THAT THE ASSES SEE MADE A BOGUS CLAIM OF DONATION. THE AO WHEN ISSUED NOTICE TO THE MUF U/S 133(6) ABOUT THE GENUINENESS OF DONATION. THE MUS VIDE THEIR REPLY D ATED 10.01.2013 AND 04.02.2013 DENIED ABOUT THE RECEIPT OF SUCH DONATIO N. DR FOR REVENUE FURTHER ARGUED THAT FROM THE CONTENTS OF REPLY OF MUS, IT W AS CLEAR THAT THE MUS HAVE NO KNOWLEDGE OF DONATION TO THEM BY THE ASSESSEE. T HE REPLY FILED BY DR. SONIA SHARMA ON 26.02.2013 WAS NOTHING TO BUT AN AFTERTH OUGHT AND PROCURED STORY OF THE ASSESSEE IN ORDER TO CLAIM DONATION AS GENUINE AND STRONGLY SUPPORTED THE ORDER OF AO. LD. AR FOR ASSESSEE ARGUED THAT ASSES SEE MADE THE PAYMENT OF DONATION THROUGH PAY ORDERS. THE PAY ORDER NO. 7818 90 DATED 26.03.2010 FOR RS. 35,00,000/-, RS. 7,81,892/- DATED 26.03.2010 FO R RS. 35,00,000/- AND PAY ORDER NO. 781891 DATED 26.03.2010 FOR RS. 30,00,000 /- WAS PAID TO THE MUS. THE ASSESSEE FURNISHED EVIDENCE IN SUPPORT OF THE P AYMENT MADE TO MUS , THEIR ACKNOWLEDGEMENT OF PAYMENT, THE ORIGINALS OF WHICH WERE PRODUCED FOR VERIFICATION TO AO. LD AR FURTHER ARGUED THAT THE P ROVISIONS OF SECTION 35AC LAYS DOWN THE CONDITION THAT, IF ASSESSEE INCURRED EXPENDITURE BY WAY OF PAYMENT TO INSTITUTION APPROVED FOR CARRYING OUT AN Y ELIGIBLE PROJECT OR SCHEME AND SUCH PAYMENT IS SUPPORTED BY A CERTIFICATE UNDE R FORM NO. 58A, THEN THEIR DEDUCTION IS TO BE GRANTED TO THE ASSESSEE. AR OF ASSESSEE FURTHER ARGUED THAT FOR VALID DEDUCTION U/S 35AC, TWO CONDITIONS ARE RE QUIRED TO BE FURNISHED , (I) THE PAYMENT MUST BE TO AN APPROVED INSTITUTION (II) SUCH PAYMENT IS CERTIFIED BY A CERTIFICATE IN FORM NO. 58A. THE ASSESSEE COMPLIE D BOTH THE CONDITIONS. AR OF ASSESSEE FURTHER ARGUED THAT INITIALLY WHEN NOTI CE WAS ISSUED TO MUS, THEY FILED REPLY DATED 04.02.2013. THE AO SELECTED ONLY ONE SENTENCE OF THEIR REPLY AND NOT CONSIDERED THE OTHER CONDITIONS OF THAT RE PLY. THE CHAIRPERSON OF MUS NAMELY DR. SONIA SHARMA PERSONALLY ATTENDED THE PRO CEEDING BEFORE THE AO AND CONFIRMED THE FACTUM OF PAYMENT BY ASSESSEE TO THEI R ORGANISATION. THERE WAS SOME DISCREPANCY OCCURRED IN THE REPLY OF THE MUS L ETTER DATED 04.02.2013 . THE AO HAS NOT GIVEN ANY FINDING ABOUT THE PERSONAL APPEARANCE OF CHAIRPERSON 4 ITA NO. 6379/M/2014 M/S RAJ ENTERPRISES. OF MUS DURING ASSESSMENT PROCEEDINGS . LD. AR FURTH ER ARGUED THAT THE CIT(A) CORRECTLY APPRECIATED THE FACT OF THE PRESENT CASE AND DELETED THE ADDITION. LD. AR OF ASSESSEE HAS FURTHER DRAWN OUR ATTENTION TO N OTIFICATION NO. SO 121(E) DATED 12.01.2009 ISUED BY THE CENTRAL GOVERNMENT O N THE RECOMMENDATION OF NATIONAL COMMITTEE FOR PROMOTION OF SOCIAL AND ECON OMIC WELFARE, NOTIFYING THE INSTITUTION APPROVED BY THE NATIONAL COMMITTEE, WHEREIN THE NAME OF MUS IS MENTIONED AS SL. NO. 16, THE RECEIPT OF DONATION S ALONG WITH COPY OF FORM NO. 58A, RESOLUTION OF MUS FOR ACCEPTING DONATION A ND THE LETTER/CONFIRMATION OF MUS DATED 26.02.2013 ( AVAILABLE AT PAGE NO. 8 T O 22 OF PB). 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO WHILE CONSIDERING THE C LAIM OF ASSESSEE ISSUED NOTICE TO THE MUS U/S 133(6) WHICH WERE DULY REPLY BY THEM VIDE THEIR REPLY DATED 10.01.2013 & 04.02.2013. INITIALLY THE MUS DE NIED TO HAVE RECEIVED THE DONATION FROM THE ASSESSEE. THE ASSESSEE WAS SHOW C AUSED BY AO AS TO WHY THE DONATION SHOULD NOT BE TREATED AS NON-GENUINE. ASSE SSEE SUBMITTED ITS REPLY AND CONTENDED THEREIN THAT ASSESSEE MADE PAYMENT TO THE INSTITUTION WHICH ARE DULY ELIGIBLE AND AVAILED THE CERTIFICATE UNDER FORM NO. 58A AS PER THE PROVISIONS OF SECTION 35AC(2)(A) OF THE ACT. THE INFORMATION INI TIALLY PROVIDED BY MUS WERE SUBSEQUENTLY CORRECTED/ BY DR. SONIA SHARMA BY APPEARING PERSONALLY BEFORE AO. THE AO DISALLOWED THE CLAIM OF DONATION ON TWO GROUNDS (I) THAT MUS HAS NO KNOWLEDGE OF DONATION TILL 15.02.2012 AN D THE REPLY WAS FILED BY THIRD PARTY ON 26.02.2013 IS AN AFTERTHOUGHT AND PR OCURED ONE, (II) THE AUDIT REPORT SUBMITTED BY MUS ON 26.02.2013 REVEALED THAT THEY HAVE CLAIMED LOSS FOR FORGERY TO THE TUNE OF RS. 8,63,26,000/-. IT WA S URGED BEFORE THE CIT(A) THAT WHILE CONSIDERING THE GROUNDS OF APPEAL OBSERVED TH AT THE PROVISION OF SECTION 55AC LAID DOWN THAT WHERE ASSESSEE INCURRED EXPENDI TURE BY WAY OF PAYMENT TO INSTITUTION APPROVED FOR CARRYING OUT ANY ELIGIBLE PRODUCT OR SCHEME AND SUCH PAYMENT IS SUPPORTED BY CERTIFICATE (F NO. 58A) AS PER REQUIREMENT OF THE PROVISION, THEN DEDUCTION IS TO BE GRANTED TO THE A SSESSEE. THE ASSESSEE COMPLIED THE TWIN CONDITION. LD. CIT(A) CONSIDERED THE CONT ENTION OF THE ASSESSEE AND 5 ITA NO. 6379/M/2014 M/S RAJ ENTERPRISES. THE NOTIFICATION NO. SO121(E) DATED 12.01.2009 NOT IFYING THE INSTITUTION AS ELIGIBLE INSTITUTION FOR HEALTH AND PROTECTION ACT IVITIES FOR ELDERLY PERSONS FOR THREE FINANCIAL YEAR I.E. 2008-09, 2009-10 & 2011-1 2. THE CIT(A) CONCLUDED THAT AO HAS RECORDED THE STATEMENT OF DR. SONIA SHA RMA (CHAIRPERSON OF MUS) WHICH CLEARLY ESTABLISHED THE FACT THAT ASSESSEE HA S ACTUALLY MADE THE PAYMENT OF RS. 1,00,00,000/- TO THE MUS. THE AO DESPITE REC ORDING THE STATEMENT CONFIRMED THE DONATION CONVENIENTLY AVOIDED REFERRI NG TO SUCH EVIDENCE INCLUDING STATEMENT WHILE DISALLOWING THE CLAIM OF ASSESSEE IN THE ASSESSMENT ORDER. THE CIT (A) CONCLUDED THAT THE ASSESSEE SATI SFIED BOTH THE CONDITION ENUMERATED U/S 35AC. THE LD. CIT(A) ALSO CONSIDERED THE FACT THAT EVEN IF ANY DISCREPANCY OR FORGERY HAS BEEN OCCURRED IN CASE OF DONEE I.E. MUS, THE AO CANNOT DENIED THE CLAIM OF DEDUCTION AND ALLOWED TH E APPEAL OF ASSESSEE. 5. WE HAVE OBSERVED THAT LD. CIT(A) HAS CONSIDERED THE ENTIRE FACT AND EVIDENCE PRODUCED BEFORE HIM AND APPRECIATED THE FACTS IN A PROPER PERSPECTIVE. AFTER PERUSING THE RECORD OF THE CASE AND GOING THROUGH T HE ORDER OF CIT(A), WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER P ASSED BY LD. CIT(A), THUS, THE PRESENT APPEAL FILED BY REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY 2016. SD/- SD/- (B. R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 27/07/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITA T, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/