INDUSTRIAL ENGINEERING CORPORATION,AHMEDABAD vs. ACIT, CIRCLE (1), AHMEDABAD

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ITA 2446/AHD/2017Status: DisposedITAT Ahmedabad14 November 2019AY 2014-154 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's admission of a fictitious donation, which was returned in cash, distinguished the case from relied-upon precedents. The assessee failed to controvert these facts or provide supporting material.

What were the facts?

The assessee claimed a deduction of Rs. 8,75,000/- under Section 35(1)(ii) of the Income Tax Act for a donation of Rs. 5,00,000/-. The Assessing Officer disallowed the claim based on the assessee's admission that the donation was fictitious and the amount was returned in cash.

What were the issues?

Whether a deduction under Section 35(1)(ii) is allowable for a donation admitted to be fictitious and returned in cash.

Which sections of the Income-tax Act were involved?

Section 35(1)(ii)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: Shri Rajpal Yadav & Shri Amarjit Singh

For Appellant: Shri Mukesh K. Khandwala, A.R
For Respondent: Shri Mudit Nagpal, Sr. D.R, Shri Mukesh K. Khandwala, A.R

PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

This assessee’s appeal for A.Y. 2014-15, arises from order of the CIT(A)-6, Ahmedabad dated 10-08-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

2.

The solitary ground of appeal is pertained to the issue of disallowing the claim of the assessee u/s. 35(1)(iii) of Rs. 8,75,000/-.

I.T.A No. 2446/Ahd/2017 A.Y. 2014-15 Page No 2

3.

The fact in brief is that assessment u/s. 143(3) of the act was finalized on 30th December, 2016. During the course of assessment, the assessing officer has noticed that assessee has claimed deduction u/s. 35(1)(ii) of the act @175% i.e. Rs. 8,75,0000/- on donation of Rs. 5 lacs given to Hervicure 1999 and Agarwalla & Sons Ltd. vs. CIT & Others (1994) 208 ITR 863 dated 5th July, 1993. On the other hand, ld. departmental representative has supported the order of lower authorities.

6.

We have heard both the sides and perused the material on record. The assessee has claimed deduction u/s. 35(1)(ii) of the act at the rate of I.T.A No. 2446/Ahd/2017 A.Y. 2014-15 Page No 3 175% on giving donation of Rs. 5,00,000/- to Herbicure Bio Herbal Research. The assessing officer has disallowed the claim of deduction on the basis of admission of the assesee that donation was fictitious and the donated amount was returned to the assessee by cash. In the light of the aforesaid undisputed facts, the facts of the case of the assessee are distinguishable from the facts pertained to the judicial pronouncement referred by the assessee since the assessee has admitted before the assessing officer that the impugned addition was made fictitiously which was returned in cash to the assessee. The assessee could not controvert these facts during the course of appellate proceedings before the ld. CIT(A) and also failed to disprove the admission made before the assessing officer with any relevant supporting material at the time of appellate proceedings before us. In view the above facts, we consider that assessee has categorically admitted before the assessing officer during the course of assessment proceedings that donation was fictitious and the same was returned to it in cash, therefore, we do not find any substance in the appeal of the assessee. Accordingly, the appeal of the assessee is rejected.

7.

In the result, the appeal of the assessee is dismissed.

Order pronounced in the open court on 15-11-2019 (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 15/11/2019

I.T.A No. 2446/Ahd/2017 A.Y. 2014-15 Page No 4 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

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