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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: Shri Rajpal Yadav & Shri Amarjit Singh
Revenue by: Shri S.S. Shukla, Sr. D.R. Assessee by: Shri M.K. Patel, A.R. Date of hearing : 22-03-2021 Date of pronouncement : 09-04-2021 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2014-15, arises from order of the CIT(A)-7, Ahmedabad dated 03-10-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
The solitary ground of appeal
of the assessee is pertained to the issue of confirming the addition of Rs. 10 lacs on account of disallowance of claim made u/s. 35(1)(ii) of the Act in respect of donation made to Herbicure Healthcare Bio Research Foundation (HHBRF) The assessee has filed Page No 2. Riddhi Buildcom Pvt. Ltd. vs. DCIT return of income on 29th October, 2014 declaring total income of Rs. 1,14,77,830/-. The case was subject to scrutiny assessment and notice u/s. 143(2) of the Act was issued on 2nd Sep, 2015. During the course of assessment, the Assessing Officer stated that information was received from the office of DDIT Investigation, Calcutta informing that assessee was a beneficiary of bogus donation u/s. 35(1)(ii) of the Act. The assessee has made claim of deduction u/s. 35(1)(ii) of the Act of giving the donation to Herbicure Healthcare Bio Research Foundation (HHBRF) In this regard, the Assessing Officer stated the donation made by the assessee to Herbicure Healthcare Bio Research Foundation (HHBRF) was no longer valid in view of the notification of Ministry of Finance dated 6th Sep, 2016 which had withdrawn approval given u/s. 35(1)(ii) of the Act to HHBRF, therefore, deduction to the amount of Rs. 10 lacs claimed by the assessee of giving donation to the aforesaid institute of the assessee.
3. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the facts reported by the Assessing Officer.
During the course of appellate proceedings before us, at the outset, the ld. counsel has reported that identical issue on identical facts has been decided in favour of the assessee by ITAT Ahmedabad in the case of ACIT vs. M/s. Thakkar Govindbhai Ganpatlal vide dated 17-07-2019. The ld. counsel has reported that aforesaid decision of the ITAT was also confirmed by the Hon’ble High Court of Gujarat in the case of Principal CIT-3 vs. M/s. Thakkar Govindbhai Ganpatlal HUF, Tax Page No 3 Riddhi Buildcom Pvt. Ltd. vs. DCIT Appeal No. 881 of 2019 dated 20-01-2020. The ld. Departmental Representative could not controvert these undisputed facts reported by the ld. counsel that the issue is covered in favour of the assessee by the aforesaid decision of the ITAT and Hon’ble High Court of Gujarat. With the assistance of the ld. Representatives, we have gone through the decisions of ITAT and Hon’ble Gujarat High Court as referred above by the ld. counsel. The relevant part of the decision of the ITAT Ahmedabad in the case of M/s. Thakkar Govindbhai Ganpatlal HUF is reproduced as under:- “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 following finding:- 2. In the first ground of appeal
, the grievance of the assessee is that ld. CIT(A) has erred in confirming addition of Rs. 8,75,00/- on 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 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 Id.AO construed the donation given by the assessee as bogus. Appeal to the Id.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 ld. 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 Page No 4 Riddhi Buildcom Pvt. Ltd. vs. DCIT 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 of S.G.Vat care P. Ltd., we do not find any merit in the appeal of the Revenue. It is dismissed.”
We have also gone through the decision of Hon’ble High Court of Gujarat wherein the aforesaid finding of the ITAT is confirmed. The same is discussed as under:- “4. Before us, the Id. Counsel for the assessee contended that donations were given on 25.03.2014. 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 6.9.2016. 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. Departmental Representative 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 representative 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 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 C/TAXAP/88/209 ORDER 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 veraci, 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." 7. In the facts of the present case, the CIT(Appeals) has given the finding of the fact that the amount of donation was transferred to the Herbicure through Bank channel and there is no evidence that the same is returned back in cash.
Page No 5 Riddhi Buildcom Pvt. Ltd. vs. DCIT
It is also found that the Herbicure Foundation has confirmed that the amount has been utilized for scientific research vide confirmation dated 29.09.2016. Accordingly, the onus placed upon the assessee was discharged.
In view of the aforesaid findings of the fact given by both the authorities below, no interfere in the impugned order passed by the Tribunal is required to be made. No substantial question of law arise from the order of the Tribunal. Therefore, the appeal fails and is hereby, dismissed.”
Respectfully following the decision of ITAT and Hon’ble High Court of Gujarat as elaborated on the similar issue and identical facts, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 09-04-2021 Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT ACCOUNTANT MEMBER Ahmedabad : Dated 09/04/2021 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