MUDRA FINANCIAL SERVICES LIMITED, MUMBAI V. INCOME TAX OFFICER WARD 10(2)(4), MUMBAI

ITA 6629/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8160 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 22-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Cancellation of registration; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT ITA NO. 6629/MUM/2018 : A.Y : 2014 - 15 MUDRA FINANCIAL SERVICES LTD., 3 RD FLOOR, B - WING, VAASTU DARSHAN, AZAD ROAD, ANDHERI (E), MUMBAI 400 069. PAN : AAACM4111B (APPELLANT) VS. ITO, WARD 10(2)(4), MUMBAI. (RESPONDENT) APPELLANT BY : SHRI PRAKASH JHUNJHUNWALA RESPONDENT BY : SHRI CHAITANYA ANJARIA DATE OF HEARING : 18 /02/2020 DATE OF PRONOUNCEMENT : 17 /06/2020 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 13.08.2018 AND PERTAINS TO ASSESSMENT YEAR 2014 - 15. 2. T HE ISSUE RAISED IS THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER DISALLOWING WEIGHTED DEDUCTION OF RS. 17,50,000 / CLAIMED UNDER S ECTION 35(1)(II) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT THE RATE OF 175% OF THE DO NATION MADE OF RS. 10,00,000 / - ON THE GROUND THAT THE S AME WAS NOT GENUINE TRANSACTION. 2 ITA NO. 6629/MUM/2018 MUDRA FINANCIAL SERVICES LTD. 3. B RIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A NON - BANKING FINANCIAL COMPANY . D URING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER NOTED THAT ASSE SSEE HAS MADE A DONATION TO M/S. S CHOOL OF H UMAN G ENETICS AND POPULATION HEALTH , HEREINAFTER REFERRED AS SHGPH, O F RS. 10,00,000 / - AND CLAIM ED THE AFORESAID DEDUCTION. ON THE BASIS OF INFORMATION FROM SEARCH CONDUCTED AT THE PREMISES OF SHGPH BY THE INCOME TAX DEPARTMENT, ADMISSION BY THE SAID CONCERN OF BEING ENGAGED IN BOGUS ACCOMMODATION ENTRY, ORDER TO THAT EFFEC T BY THE INCOME TAX SETTLEMENT COMMISSION , AND SUBSEQUENT CANCELLATION OF THE REGISTRATION OF THE SAID CONCERN, THE AUTHORITIES BELOW DENIED THE AFORESAID CLAIM OF THE A SSESSEE HOLDING THE TRANSACTION TO BE BOGUS. 4. AGAINST THE ABOVE ORDER , ASSESSEE HAS FILED APPEAL BEFORE THE ITAT. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT IN IDENTICAL CIRCUMSTANCES FOR DONATIONS MADE TO THE SAME INSTITUTION, IN SEVERAL DECISIONS ITAT MUMBAI AND ITAT KOLKATA HAVE DELETED THE AFORESAID DISALLOWANCES ON THE GROUND THAT ASSESSEE HAS DISCHARGED ITS ONUS BY GIVING EVIDENCE OF THE DONATION. THAT THE SUBSEQUENT CANCELLATION OF REGISTRATION OF THE SAID INSTITUTE WOULD NOT AFFECT THE ELIGIBILITY OF ASSESS EE FOR CLAIMING THE SAID DEDUCTION. THE DECISIONS OF ITAT MUMBAI REFERRED IN THIS REGARD ARE AS UNDER : - I) UR N ISH J EWELLERS VS ACIT 2019(5) TMI 1323 - MUMBAI ITAT ; II) GUJARAT AGROCHEM PRIVATE LIMITED VS ACIT 2019(6) TMI 1048 - MUMBAI ITAT ; III) MOTILAL DAYABHAI JHAVERI VS ACIT 2019 (4) TMI 1615 - MUMBAI ITAT 3 ITA NO. 6629/MUM/2018 MUDRA FINANCIAL SERVICES LTD. ON THE OTHER HAND , LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF AUTHORITIES BELOW. HE SUBMITTED THAT ACCEPTANCE BY THE SAID INSTITUTE BEFORE THE INCOME TAX AUTHORITIES AND THE SETTLEMENT COMMISSION OF ENGAGING INTO BOGUS TRANSACTIONS IS AMPLE PROOF THAT THE ORDERS OF THE AUTHORITIES BELOW ARE QUITE SUSTAINABLE. 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. IT IS NOT DISPUTED THAT IDENTICAL FACTS , AS IN THE PRESENT CASE , WERE ALSO BEFORE THE T RIBUNAL IN THE DECISIONS REFERRED ABOVE. THE T RIBUNAL HAD DELETED THE DISALLOWANCE ON THE GROUND THAT ASSESSEE CANNOT BE HELD RESPONSIBLE FOR THE SUBSEQUENT ADMISSION BY THE SAID INSTITUTE, AND CANCELLATION OF ITS REGISTRATION. NO CONTRAR Y DECISION HAS BEEN SHOWN IN THIS REGARD. ACCORDINGLY RESP ECTFULLY FOLLOWING THE PRECEDENT AS ABOVE , I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DIRECT THAT THE DISALLOWANCE IN THIS REGARD SHOULD BE DELETED . 6. IN THE RESULT , THIS APPEAL BY THE ASSESSEE STANDS ALLOWED . O RDER PRONOUNCED ON 1 7 T H JUNE, 2020 U N D E R R U L E 3 4 ( 4 ) O F I T A T R U L E S . SD/ - (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DATE : 1 7 T H JUNE, 2020 *SSL* 4 ITA NO. 6629/MUM/2018 MUDRA FINANCIAL SERVICES LTD. COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, SMC BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI