NIKUNJ MAHENDRABHAI ADANI,AHMEDABAD vs. THE ITO, WARD-1(3)(1), AHMEDABAD

ITA 2026/AHD/2025Status: DisposedITAT Ahmedabad16 October 2026AY 2019-207 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to establish the genuineness of the impugned contribution as a donation eligible for deduction under Section 80GGC. The Tribunal noted that mere payment through banking channels and production of donation receipts were insufficient to override the overwhelming evidence demonstrating that the recipient political party, Apna Desh Party, was engaged in providing accommodation entries through a systematic layering of funds. The Tribunal relied on the investigation material, statements recorded under Section 132(4), bank trail analysis, and the established modus operandi of the recipient political party, which constituted a complete chain of circumstances. The Tribunal also referred to consistent views taken by Coordinate Benches in identical matters. Consequently, the Tribunal found no infirmity in the order of the CIT(A) affirming the disallowance made by the Assessing Officer. The grounds raised by the assessee were dismissed. The appeal was dismissed.

What were the facts?

The assessee, Nikunj Mahendrabhai Adani, filed a return for Assessment Year 2019-20, claiming a deduction of Rs. 1,90,000/- under Section 80GGC for a donation to Apna Desh Party, a Registered Unrecognised Political Party (RUPP). The assessment was reopened based on information from search and seizure proceedings against RUPPs, including Apna Desh Party. The Assessing Officer disallowed the deduction and added Rs. 1,90,000/- to the total income under Section 69A read with Section 115BBE, citing the Investigation Wing's findings about Apna Desh Party's alleged accommodation-entry activities. The Commissioner of Income-tax (Appeals) upheld this order. The assessee appealed to the Income Tax Appellate Tribunal (ITAT). The assessee did not appear for the hearing, but the appeal was adjudicated based on the Revenue's arguments and Tribunal precedents.

What were the issues?

1. Whether the Tribunal had to decide if the disallowance of deduction of Rs. 1,90,000/- claimed under Section 80GGC of the Income-tax Act, 1961, in respect of a donation made to Apna Desh Party was justified, and if the consequential addition of Rs. 1,90,000/- under Section 69A read with Section 115BBE of the Act was sustainable. Assessee's contentions: The assessee claimed the donation was genuine and made through banking channels, supported by a receipt, and that no amount was received back. The assessee relied on documentary evidence. Revenue's contentions: The Revenue contended, relying on investigation material concerning Apna Desh Party, that the donation was not genuine but an accommodation entry. The Revenue argued that the party's modus operandi involved providing bogus donations and returning funds after deducting commission. The Revenue cited various ITAT judgments and Supreme Court decisions, including CIT v. Durga Prasad More and Sumati Dayal v. CIT, to argue that taxing authorities are not bound by mere documentary evidence and can look beyond the apparent to ascertain the real nature of a transaction.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 80GGC,Section 250,Section 147,Section 144B,Section 132(4),Section 13A,Section 29C,Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-

For Respondent: Shri Amit Pratap Singh, Sr. DR
Hearing: 14.09.2026Pronounced: 16.10.2026

This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short), dated 26.08.2025 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2019-20. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) in confirming the disallowance of deduction of Rs.1,90,000/- claimed u/s 80GGC of the Act in respect of donation made to Apna Desh Party and in sustaining the consequential addition of Rs.1,90,000/- u/s 69A r.w.s. 115BBE of the Act.

The order continues below.

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