KISHORSINH HENDUJI SOLANKI,AHMEDABAD vs. THE DY.CIT, CIRCLE-2(1)(1), AHMEDABAD

The Ld. CIT(A) has erred in confirming the disallowance of Rs. 15,00,000/- by rejecting deduction claimed u/s 80GGC of the Act. On the facts and circumstances of the case, the disallowance made of Rs. 15,00,000/- by rejecting deduction claimed u/s 80GGC of the Act is completely incorrect and illegal. In view of this, the addition made of Rs. 15,00,000/- is requested to be deleted.

The Ld. CIT(A) has also erred in facts in not appreciating the documentary evidences submitted during course of assessment proceedings related to deduction claimed u/s 80GGC of the Act amounting to Rs. 15,00,000/-, Therefore the same be allowed and the impugned addition made of Rs. 15,00,000/- be deleted.

The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of appeal.

Brief facts of the case are that assessee had filed return of income Rs 30,08,110. As per this information, the Investigation Unit, Ahmedabad has conducted search on various it was found that Rashtriya Samajwadi Party (Secular) is one of the political party which is indulged in accepting bogus donations and providing accommodation entries to the various donors. In the statement recorded u/s 132(4) of the Act Shri Bishwajeet Singh has stated that the party has been taken over by him from Shri Suryanath Chaturvedi and the party is involved in providing bogus donation entries to the various donors. During the assessment year under consideration the assesse has shown donation of Rs 15,00,000 to Rashtriya Samajwadi Party (Secular) and claimed deduction u/s 80GGC of the Act. On the basis of this information, the assessment was re-opened u/s 147 of the Act following the due procedure as per the provisions of section 148A and accordingly a notice u/s 148 of the Act was issued on 24.04.2023. Assessment u/s 147 r.w.s 144B of the Act was completed on 06.03.2025 assessing total income at Rs 45,08,110. The A.O made an addition of Rs 15,00,000 on account of disallowance of deduction claimed u/s 80GGC of the Act.

Heard both the parties and perused the material available on record.

Further careful consideration of the grounds of appeal, it is noted that the identical issue was considered by Co-ordinate Bench of this Tribunal in ITA No. 1017/Ahd/2023 vide order dated 30.04.2025 on - 3– donation made to political parties u/s. 80GGC of the Act wherein it was held as follows:

As I proceed to deal with genuineness aspect, it is important to bear in mind the fact that what is genuine and what is not genuine is a matter of perception based on facts of the case vis-a-vis the ground realities. The facts of the case cannot be considered in isolation with the ground realities. It will, therefore, be useful to understand as to how the shell entries, which the loan creditors are alleged to be, typically function, and then compare these characteristics with the facts of the case and in the light of well settled legal principles. A shell entity is generally an entity without any significant trading, manufacturing or service activity, or with high volume low margin transactions to give it colour of a normal business entity used as a vehicle for various financial manoeuvers. A shell entity, by itself, it not an illegal entity but it is their act of abatement, of, and being part of financial manoeuvring to legitimize illicit monies and evade taxes, that takes it actions beyond what is legally permissible These entities have every semblance of a genuine business its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets its apart from a genuine business entity is lack of genuineness in its actual operations. The operations came out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities." In the aforesaid case, the Hon'ble ITAT bench held "As regarding ground no. 2, donation of Rs. 52,00,000/- made u/s. 80GGC, the ground is general in nature. The assessee has not produced any additional evidence in support of its claim. In fact the assessee had - 6– stated that it had cordial relationship with Mr. Kamlendu Tripathi Secretary of RSP and no other criteria was followed for making these donations. The Ld AO made a detailed enquiry of RSP and its Bank accounts and transfer of funds to one Shri Mukesh Mehta proprietor of two firms and he transferred it to Waheguru Enterprise and Sapan Traders, which is clearly a systematic financial maneuver to legitimate illicit moneys and evade taxes. It is appropriate to follow the Hon'ble Supreme Court judgment, wherein SLP filed by the assessee is dismissed confirming the Tribunal's decision to come to the conclusion that the entire loan transaction was not genuine, in the case of Pavankumar M. Sanghvi v. ITO [2018] 97 taxmann.com 398/258 Taxman 160 (SC) which held as follows: Assessee received certain sum as loan from two companies - Assessing Officer having found that said lender companies were shell entities added loan amount to income of assessee under section 68-Bank statement of lender companies revealed high transactions during day and a consistently minimal balance at end of working day-Further day when assessee was given loan there were credit entries of almost similar amounts, and balance after these transactions was a small amount Tribunal taking into account bank statements of lender companies and fact that assessee failed to produce these lenders for verification held that alleged loan transactions were not genuine -High Court by impugned order held that since Tribunal had given elaborate reasons to come to conclusion that entire loan transaction was not genuine, appeal filed before it was to be dismissed Whether Special Leave Petition against impugned order was to be dismissed.

2 In the absence of any evidence from the assessee, the grounds raised by the assessee are untenable and therefore the same is rejected. The findings given by the lower authorities does not require any interference and the addition is sustained. It is pertinent to mention here that out of two political parties to whom the appellant paid total donation of Rs. 1,13,51,000/- the modus operandi of the one political party named the Rashtriya Samajwadi Party (Secular) has already been discussed in details in the preceding paragraphs of the instant order. It can be safely presumed that the modus operandi of other political party named Kisan party of India is also indulging only in providing accommodation entry as can be ascertained from various - 7– newspaper reports and enquiries which is being conducted by various institutions. In view of the findings in the above case I am inclined to agree with the decision made by the AO during the assessment proceedings regarding the donation made was basically a bogus donation as the Political Party is indulging only in providing accommodation entry. Thus in view of the above discussion, the submission made by the appellant regarding the claim of deduction for donation of Rs. 1.13.51,000/- to be allowed is not acceptable as already discussed in detail in the preceding Paras of the instant order. Therefore, the ground of appeal stands dismissed.”

Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:

Ld. Counsel appearing for the assessee filed same set of documents filed before the Assessing Officer and reiterated its submissions. Nothing new documents or evidences filed before us to deviate from the findings of the Lower Authorities. The Ld AO has clearly brought out facts that bank accounts of above political parties have been used by the accommodation entry provider, where the donation received by cheques were layered through various bank accounts and ultimately cash was returned back. The same is not disputed by the assessee with relevant materials. Further the Ld AO made a detailed enquiry of RSP and its Bank accounts and transfer of funds to one Shri Mukesh Mehta proprietor of two firms and he transferred it to Waheguru Enterprise and Sapan Traders, which is clearly a systematic financial maneuver to legitimate illicit moneys and evade taxes. In the absence of any fresh materials in support of the assessee’s claim. The Grounds raised by the assessee is devoid of merits and liable to be dismissed.”

Respectfully following the above decision of the Co-ordinate Bench, the grounds raised by the assessee are devoid of merits and the same are hereby dismissed.

In the result, the appeal filed by the assessee is dismissed.

""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file.